Executor of estate = Bank - can I change ....

[pierrelejohn]

Hi
3 weeks ago my father passed away leaving an estate of about £600,000 (most of this is in joint names with my mum house, savings etc)

My father always had Lloyds bank looking after all his money who invested it on his behalf.

My father made Lloyds bank executors of the estate - named in his will.

Last week, a few days before the funeral one of Lloyds managers came out to see my mother and I and told us that the fee was going to be 3.5% which was approximatly £4000.

The lady collected a load of certificates from us to get ready to start administering the estate, probate etc.

Since that meeting I have found out lots of things about banks and the extortinate prices they charge, and I know that I could have got it cheaper.
however at the time I thought that as the bank was named executors they were the ones who had to do it, and didn't have to stand down.

Lloyds bank should find dealing with all the estate really easy as they managed all my fathers shares, savings etc, and knew what his portfolio consisted of.


1 week on, Im beginning to question their right to act.

Does anyone know if I can stop them acting as executors once they have started, I don't remember my mum or I signing anything, but at the time it was all so fuzzy due to the death of my father, that I can't be sure.

Can anyone advise on this situation, do I have to keep with them now they have started ?

The whole point of making the bank executors was so my mum wouldn't be stressed, but she is getting that way when she sees how much they are charging.

Any advice greatly received

[pawncob]

They were instructed by your father when he made the will.
Unfortunately, I don't think there is anything you can do to stop an executor acting .

[Lee Young]

Executors appointed have a right to act and if they have already begun the administration they can not renounce. If they have not started the work you would ask them to renounce, but they can not be compelled to do so.

From a business point of view the Cancellation of Contracts ...Regulations (2008 I think) might have an impact. You should have been given notice of a 7 day cooling off period when business matters are concluded away from the business office. Technically this notice should be given to the clients and the clients are technically the executors but as solicitors we are obliged to treat the beneficiaries as our clients in those circumtsnaces in which case mum would be the client at the beneficiary. There is no reason why the banks should deal with things differently, though that is probably famous last words.

Having the right to cancel the contract does not really get you very far becasue the bank is still the executor and is therefore still entitled to act. However you may be able to negotiate on price and reduce it down to a more acceptable level. You might also want to tell the bank that you will be having a firm of solicitors scrutinise everything it does and if the fee is deemed to be too high that you will not be afraid to shout it from the rooftops (whether you actually do this is not really the point, the banks, already nervous of bad press, may not want more hassle and may decide it can renounce).

Not all banks are bad at this kind of work, in the same way as not all solicitors are good at it. It's impossible to pass greater comment on the fairness of the fee, though on the limited information you have given, it would seem a tad high!

Good luck.

[pqtaxation]

Lee Young’s summary above is, in my view, excellent.

It prompted to me to look at his law firm’s website (frettens.co.uk) on which each fee earner, including Lee (partner and head of wills & tax dept), gives a video clip about his/her work and approach. In his Lee advocates that every adult with assets should have a will. For those (many) such lay people reading this site who do not, as well as for their adult family members, then it may be a good idea to view Lee’s video clip.

Specifically regarding the choice of executors for a will, I think the corollary to Lee’s post above is that most people should choose both lay executors (family member and/or trusted friend who is not daunted by legal/financial matters) and a solicitor from a multi-partner law firm. That way on death the law firm can act if the lay executors cannot but if the lay executor(s) is still willing the solicitor can renounce (renunciate) and take on an advisory role to the lay executor(s) (most of whom will require such advice). Although banks can be good (or bad) depending on the individual (team) concerned, they are generally more expensive and have the rigidities in methodology to be found of any large organisation where there is a perception of risk in their duties – hence I don’t see the reason why most people should choose to appoint a bank as executor.

Disclosure: I have no connection with Lee Young (or Frettens) nor ever spoken to him as Fretten’s offices are on south coast of England east of Bournemouth.

[pierrelejohn]

Thanks for that...

I have been told that as the estate is worth £600k, £500k of this is in joint names (house , savings etc)

so the banks fee will only cover the £100k, as this is what he owned privately (stocks, shares, Isas etc)

we were quoted 3.5% (approx £3-£4000) so I guess that this works out.

Is the above correct ?

[Lee Young]

Thank you pqtaxation for the plug! We have never met but if (s)he's ever in Christchurch I will buy him/her a beer/coffee!

As regards the fees, £3500 to deal with £100,000 of assets does seem extortionate. Joint assets pass automatically and it does not need the executor to deal with that - a death certificate to the bank/land registry/asset holder is all that is needed.

If clients insist on a fxed fee from me I would normally say 2.25% - which is still generous to me I hasten to add when comparing the time it takes for the work to be done - but certainty of fee is often desirable hence why the banks pick up the business over and above solicitors who are often reluctant to give a fixed quote.

I would try and haggle on price - if the banks looks after the investments then there is very little work involved to this, particularly if it is going to push for the investments to be retained and transferred into the name of the beneficiary.

[pqtaxation]

Is the above correct ?

As Lee Young indicated, it is also my experience that fees of professional executors (especially of banks) can be a matter for negotiation by beneficiaries, especially surviving spouses. But the fact that those executors pay themselves from the estate which makes it an unusual area for negotiation. It is not a matter or correct or incorrect.

Lloyds offer to charge nothing for administering jointly owned assets (circa £500k) and to base their fee only on solely owned assets (circa £100k) is on the very reasonable end of the spectrum from very reasonable to very unreasonable. A level of 3.5% is rather less reasonable – you could try for 2.25 to 3% if you wish – but you’ll no doubt be told that your father was given and agreed to their fee terms and they are not charging for joint assets.

It may be more profitable to clarify and negotiate about what, if any, re-chargeable costs will there be (as negotiated) in addition to the % fee –for example for the open market valuation of the house they may want to instruct more than one professionally qualified valuer at your cost (to make sure there is no risk to them if the valuation is ever disputed by HMRC or anyone else) whereas your side may just want a free market valuation by local estate agent(s) (to be towards the high side in case CGT ever becomes payable if the house is sold without main residence relief) which suits your purpose and keeps down rechargeable costs.