The Shocking Truth about Probate Fees
The news is littered with appalling stories of vulnerable, recently bereaved families who are charged exorbitant probate fees by banks and solicitors. Here’s a collection of news snippets that make interesting reading; highlighting the importance to always use a fixed fee service from a reputable company.
An article from the Guardian titled “The £600m RIP-off” describes that £600 million of the £1.25bn a year probate market is made up of shameful over-charging by high street banks.
Prompted by concerns that consumers did not understand the probate process the Office of Fair Trading approached 4 leading banks in 2010 and reported “For an average estate, consumers can pay between £3,000 and £9,000, failing to shop around for executor services could be costing UK consumers around £40 million a year.”
Consumer review publication Which? reported that some bank charges were around double the cost quoted by specialist practitioners in 2009. They obtained quotes from 4 different banks and found that on a £350,000 estate, the difference in fees was a shocking £8750.
Candidmoney .com cites a case involving a man that died leaving £1m in a savings account. That bank wanted almost £50,000 in probate fees. This is despite the fact it was a straight forward case of paying the inheritance tax and equally dividing the money between the grandchildren.
The Daily Mail owned website; ThisisMoney .co.uk, featured a case in 2010 where a company added almost £3000 in “extra charges” to the final bill of Mrs Stevenson from West Yorkshire.
Another article by This is Money titled “Banks that prey on the bereaved” in June of the same year, described the experiences of Mr & Mrs Berryman. After their aunt passed away, the family discovered a high street bank had been named as executor in the will and wanted to charge probate fees of 4% of the estate value. This worked out at £25000. When they complained, the bank agreed to halve the fee immediately. Next, when presented with a quote from another firm for some £8000 less the £12500 quoted, they agreed to renounce their executorship.
43% of people in the UK opt to use professional executors. In August 2010 Panorama investigated 2 cases of ‘baiting,’ in a program titled “Wills-The Final Rip Off?” Baiting is the name given to companies that charge a very competitive price to write a will as a loss leader. They then write themselves in as professional executors and make exorbitant charges for probate services.
In 2009, the BBC’s Rip-Off Britain highlighted another 2 cases where a bank and a solicitor tried to charge beneficiaries nearly 10 times the appropriate amount for probate services. In both cases they were appointed in the will as executors by the deceased and refused to renounce their positions when the requested to do so by the family.