Making a Will always used to be something that you would go and see a solicitor to do. But recently, more and more Will Writers have sprung up, offering to make a Will for you at very low cost. This is obviously attractive to many people; no one wants to pay more than they have to and if you can get a binding legal document for less by using a Will Writer rather than a solicitor, then why not?
However, some of the Will Writers are not quite what they seem to be. I recently had clients come to see me who had made Wills through an online service for the bargain price of £29.99. The Wills themselves seemed to carry out their wishes and they were generally happy with them. However, they explained that part of the deal with the Wills was that the online company was appointed as executor for both of them when they died. They were unsure why this was the case and wanted my professional advice.
I explained that when you die, you can appoint whoever you like to be your executor. It is their responsibility to collect all assets and money due to the deceased person’s estate, pay any outstanding taxes and debts and then distribute the estate to the people who are entitled to it under the terms of the Will.
Usually, a married couple will appoint each other as executor when the first of them dies (perhaps with another person to help them) and then a friend or family member is appointed on the death of the surviving spouse. However, sometimes it is appropriate for a professional to be appointed as executor, particularly if the estate is complicated or there are issues or potential disputes in the family.
So, why would the Will Writers insist on being appointed as executors on the death of both of them? Unfortunately, when we looked at the small print of the terms of business it all became clear. They advertised that they didn’t charge for being appointed as executor, but if they actually did act then they would charge a fee. A rather large fee. In fact, they would charge 4% of the gross value of the estate – and as they were appointed on both Wills, this would be charged twice!
Counting the cost
So, as an example, a client could have a combined estate of approximately £850,000 – not an unusual size in Harrogate where property prices are so high. When the first one of them dies half of the estate would be £425,000 – so the fee would be £17,000 for the Will writers to act as executors. The Wills stated that all assets would pass to the survivor, so their estate would then be worth the full £850,000. So, when they died, the fee charged to act as executor and administer the estate would be a whopping £34,000.
That is a total of £51,000 lost from the estate in fees before anything else has even been considered!
Looking at the alternatives
So, what if I had prepared the Wills instead? Wills for a couple start at £350 plus VAT for the pair, so a larger amount is payable up front. But, I would very rarely, if ever, suggest that a professional was appointed on both deaths – and even if we were appointed to act on second death we would never charge a fee as large as 4% of the gross estate. In fact, should we be required, we generally charge on a time spent basis when appointed as executor (although we can offer a fixed fee if preferred) and this rarely works out as more than 1% of the net estate and is usually less than this figure. So, if we were appointed as executor on second death, something we would never insist on, the most our fee would be would be in the region of £8,500 plus VAT – a difference of over £42,000.
It makes that £29.99 price tag look a lot less appealing all of a sudden…
Written by Julie Hutchinson, Life Lawyer at Berwins Solicitors