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Archive for May, 2012

You may have noticed how, over the past couple of years, a number of television companies and documentary film makers have looked at the subject of will writing and probate practices and what they’ve found has been far from pretty. This is because there are certain unscrupulous people out there that have seen an opportunity for making money and who have absolutely no conscience about taking advantage of people when they are at their most vulnerable.

When someone dies, there is usually a lot to be sorted out to wrap up their affairs. Probate, or Letters of Administration if someone dies without a Will, is the term used to describe the process of applying for the right to deal with a deceased person’s affairs, and can appear to be an impenetrable process, complicated and involved and hugely time consuming.

Because of this, individuals contemplating their own deaths may, in order to spare their families stress and time, make arrangements that relieve the family of the responsibility of probate, usually by specifying something in their Will. For the same reason, families who have lost a loved one may hand over the whole process to a third party. Now there is absolutely nothing wrong with these decisions as long as you know what you are signing up for. A hasty decision can cost you dear so make sure you do your research and don’t allow yourself to be pressured into signing anything until you’ve had time to completely understand the implications of what you are putting in place and the terms of any agreement.

So what are your choices?

Do-It-Yourself probate

Many will baulk at the idea of handling the administration of an estate personally but it may not be, in simple circumstances, a bad idea. The person applying for probate, known as ‘the applicant’, completes a probate application form (PA1) together with the appropriate inheritance tax form and sends those with the appropriate fee to their local probate office. The probate office will then contact them in writing offering them an appointment to swear an affidavit confirming that the figures in the forms are correct. Once that interview is concluded the probate office will then send the applicant the actual probate and however many ‘office copies’ the applicant has requested within two weeks. These office copies are the ones that should be sent to the deceased’s banks, building societies, insurance companies etc., who will then release the funds to the applicant who should then distribute the estate in accordance with the deceased’s Will or under the Rules of Intestacy if there was no Will.

If all that still sounds like too much for you to cope with Lovingly Managed can help. We don’t take over as executor on probate matters, we just help the executor through the process so that you actually do it yourself but we just “hand hold” you through the process. We can fill out the tax and probate forms for you to sign and, if you want us to, we will accompany you to the probate office for you to swear the necessary affidavit to get probate provided to you personally. If you then want us to help further then of course we can help you write the appropriate letters to life offices, banks, building societies, provide Stock Transfer forms to transfer share entitlements etc. (One of our directors is a retired Wills and Probate solicitor with more than 20 years’ experience dealing with exactly this type of work.) We are happy to do as much, or as little, as you require, our service is totally transparent and is charged on an hourly basis.

Solicitors

Many people use a specialist wills and probate solicitor. Solicitors are governed by the Law Society, have completed a lengthy period of education and have to undertake continuous professional development to keep their knowledge current in order to retain their practising certificates. In addition, if they make mistakes they are liable. What they can charge is also governed by the rules of the Law Society and is usually around 1.5% of the gross value of the estate.

Banks

Then there are the banks, a popular choice for many people and, on the face of it, one would assume a sensible choice. Banks can be appointed either by the deceased prior to their deaths in their Wills or by the family following a death. In the first instance the client will usually have been loyal to a particular bank for many years and so trust them and, perhaps having received marketing information about the bank’s probate service, decides to appoint the bank to the role of executor in their Will in the belief that the bank will administer probate on their deaths. Alternatively, in the case of the family appointing the bank, this usually happens when the family contacts the bank to report a death and finds themselves being ‘sold’ the bank’s services. Again, trust is usually a key reason for using a bank’s service in this scenario. If you go down this road, expect to pay the bank between 4-5% of the gross value of the estate for their services, a lot more than solicitors charge. However, a word of warning for anyone who has been asleep for the past few years and is still labouring under the illusion that the banks have your best interests at heart and are there to help you; please, wake up now. The minute you sign on the dotted line the person who has sold you the bank’s probate service is punching the air in delight because they are one step closer to achieving their sales target that month. That is what you mean to them; don’t kid yourself that you are anything more than that, regardless of how long you or your relative have been that bank’s client.

Problems with a number of the major banks’ probate services have been highlighted recently on a number of internet forums. The issue is that, in some cases, while your bank may appear to provide probate services, in these straightened times even the banks have had to reduce their overheads and in many instances these services are now outsourced to independent “trust” companies. And just because these companies come recommended by your bank this is no guarantee of good service which many people have found out to their cost.

Trust companies

What happens is, when you report the death of a family member to the bank, you may be referred to a trust company who will send someone to visit you in your home and will then sell you on the idea of signing over the role of executor/administrator to them so that they can deal with everything on your behalf.

This is normally done by the next of kin or executor signing a General Power of Attorney which grants the trust company power to stand in the shoes of the actual executor/administrator to “run” the estate. The family or executor is asked to provide the original Will, if there is one, copy death certificates and then the trust company takes over. Charges will vary so check but will invariably be significantly higher than those of a solicitor, especially as the bank will in most cases receive a referral fee for introducing you to the trust company, on top of the trust company’s charges, so these have to be factored in. There are lots of horror stories concerning some companies who carry out this type of business and here are some examples of what people say about just one of them (name excluded):

“After my son’s mother died nearly two years ago this month, we were approached by XX bank about ***. My mother had died a year previously to the sad loss of my dear ex-wife. I had done that probate with a solicitor but because of the massive emotional implications of this sad loss we were sold this company’s idea of taking every worry possible away, and as there was so much other emotional baggage to deal with this seemed a good plan at the time; how wrong I was.

“After signing the “contract” in a meeting with some guy, whom we’ve never seen or heard of since, nothing happened. All relevant info was passed over, a couple of months passed and we started receiving red bills at the house! NO COMPANIES HAD BEEN INFORMED! We wrote to each individually, explaining the situation and also sending (YES US) copies to ***. Then I was asked for the marriage certificates, divorce certificates etc, which had also already been sent by registered post. This appalling service via my “case manager” would be a continuing theme throughout (bar one of them) and they changed every few months!!

“The journey with this company at probably the worst time of my life has sickened me to the core and I have told them to reflect their poor service in the final accounts – they ignored that and once again I was left phoning this dreadful company – they eventually removed the set-up fee (£400) which is a total disgrace!

“Many other issues also happened but I become tired and sad and despair that, in our well legislated country,such a company can exist with the backing of major companies. If I can stop one family from using this terrible company then that’s a start. Thank you so much for setting this page up and for all the work in highlighting these cowboys!”

“Our grandfather passed away in October last year and we travelled home from New Zealand to help mum. XX bank referred us to *** when we went into the branch to advise them of grandad’s death. As my partner had worked for XX bank for years we trusted them and a guy came to house the next day. He was an ex-police officer so the trust thing was there. Twelve months on the house has been sold for 6 months and STILL they say things are in progress. They wont give any specifics on where they are up to and they keep asking for documents we sent last year. We haven’t had any indication of how much they have collected from grandad’s policies or when the money is going to be paid. Mum is getting really stressed with this. She has lost her father and husband in the past year and dealing with this dodgy company is the last thing she needs. Has anyone had any success contacting the CEO?”

“*** are an UNREGULATED company. Their employees do not have legal qualifications or law-based backgrounds. They regularly overcharge by nearly 50% by adding excessive “disbursements” to bills.”

It’s worth noting that should the executor become unhappy at any time with the service he or she is receiving from a company that has been granted a General Power of Attorney, the person who granted the power can revoke it but will be liable for costs up to the date of revocation and of course all this will significantly delay things.

Probate practitioners and will writing companies

Then there are a number of probate practitioners and will writing companies who gain control of probate by signing up people prior to death, usually by using a Will as a loss leader i.e. they charge a minimal fee for the Will, which appears to be a very good offer, but then persuade the client to sign over the probate process by appointing the individual agent or an umbrella company as the actual executor of the Will. Sometimes they will offer you a Will storage service which can cost anything up to £40.00 per year or perhaps more. Don’t waste your money. If you have a safety deposit box with a bank you could use that but usually there is an annual charge for this service. The best place to store an original Will is with the Court Office in London where the lodgement fee is a one-off £20.00. There is no fee to withdraw a Will and if you change it then you will only have to withdraw the original and replace it with the new one or lodge a Codicil.

When the person dies the company steps in to take up the role of executor. However, what is even more worrying about these companies is that, as it was the deceased who granted them executorship, it is virtually impossible, without court action, to have them removed as executors regardless of how bad their service. Some families have seen huge sums of money disappear in spurious charges and have been powerless to do anything about it.

These are industries that are currently unregulated so beware. There are quite a few of these businesses trading and if you look at the plethora of advertisements for companies dealing in this sort of work you will see that they have a very slick procedure so it is unsurprising that people are persuaded into signing up only to regret their decision when it’s far too late.

While all this may sound frightening and depressing, we’re not saying that all organisations providing probate services are delivering a poor service. There are many that are providing an excellent service and have many happy clients. The moral of the story here is to check who you are giving away power to and then check, check and check again! Carry out a thorough investigation into any company as it may be too late afterwards. Are they a member of a professional body, such as the Society of Will Writers, whose members are bound by a code of ethics? Read the small print and if anything is unclear get clarification. Don’t sign anything until you are absolutely sure what it is you are signing. If you are not happy with the answers, or they seem a bit vague, go elsewhere. Ask for testimonials and make sure they are authentic. Check out all the possible forums on the internet which might hold information about the company concerned and search for reviews of their service from previous clients. You may be glad that you did! If you are not sure how to do this then ask someone who can help you.

We know that people tend to want things sorted as soon as possible but there is no specific time limit wherein probate has to be applied for unless inheritance tax is payable, in which case that needs to be paid within six months of the date of death otherwise financial penalties accrue. Most people “in the trade” refer to “an executor’s year” as it’s quite normal for it to take this long to finalise an estate. So, although you might want things to move quicker, it’s just not worth putting extra pressure on yourself and rushing into a decision that you may live to bitterly regret.

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