Low Cost Wills And Pre-Paid Probate
I had hoped that we would not see a return to the late nineties when low cost Wills, free Wills were rife within the profession. Unfortunately, we are seeing a resurgence of this practice, which is neither good news for the profession or the consumer as most clients who took these services believing they were paying around £20 a Will, in fact, ended up paying several hundreds of pounds to unscrupulous companies.
We are also seeing a rise in pre-paid probate being offered, and I felt that it was prudent to republish an article the Society put out in 2014 especially as the Society’s view has not changed.
“With the apparent rise in firms offering their clients pre-paid probate plans the Society has carried out its own survey into the market.
In January 2014 STEP introduced their Code for Will Preparation in England and Wales which states “No will drafter shall prepare a will and require, solicit or otherwise attempt to obtain any advance payment for acting in the administration of the client’s estate”.
A view that the Society strongly supports and the Board will recommend to the Executive Council that our Code should be reviewed to include a similar requirement on Members.
There is little information available at present regarding the quantity of such plans being sold, or whether these plans have been received with any widespread criticism. The Legal Services Board (LSB) has however expressed strong concerns about the miss-selling of PPP plans. It is particularly worrying in their eyes that the practice of selling PPP is not currently under regulation. In their consultation of will writing, probate and estate administration services, they state:
“Prepaid probate is, in our opinion, the largest dormant but inevitable disaster that will hit the whole sector. For many decades (over 50 years), Wills have been written as a loss leader to lock beneficiaries into using the firm, company or individual as executor. More worrying is the situation where testators have been mis-sold a package by misleading claims about current estate administration charges (by quoting the high bank executor and trustee fees of over 4%) and guaranteeing that the estate will not be charged more than for example 1.5% or 2% which can already easily be found in the current market. For this worthless guarantee, the testator pays between £1000 and £2500. Many have misunderstood and see this as payment towards the administration or at least believe that the guarantee is enforceable when it is not because these will writing companies have not set aside sufficient if any, reserves to insure against future increases. The fee is paid directly to the will writing company which uses the capital from marketing, commission or as profit. This is in our view a massive ticking time bomb in this sector. We estimate that as these practices are employed by some will writing companies, and have been for many years, there are currently tens of thousands of Wills where the testator is likely to have been miss-sold prepaid probate and where families will, sooner or later be clamouring for redress …..?”
The report goes on to explain that this likely “clamouring for redress” is likely to lead to increases in claims against service providers in future. This will, in turn, cause an increase in insurance premiums throughout the market, which will hit will writing companies and probate providers across the board and eventually hit the consumer:
“… Unless other solutions are found companies responsible for this kind of activity are going to impose a huge burden on the insurance premiums of other will writing companies and/or members of the public without redress.”
The Solicitors Fee UK website makes the following points in its consumer advice regarding PPP:
“There appears to be few advantages in using a prepaid probate scheme, and you should resist being pressurised by a salesman….”
“Those who are best placed to get a good price for probate work will be your executors. The best way to ensure that probate costs are reduced is to ensure you appoint executors who will be concerned to keep costs to the minimum”.
The general synopsis of this advice is: PPP brings few clear advantages and requires an element of risk. PPP providers sell this product based on its simplicity and cost effectiveness. An analysis of the facts which underlie this service, however, heavily qualifies these claims. As such, consumers are best advised to be critical of claims from PPP providers.
Those benefits of PPP which withstand scrutiny are largely transferable to a traditional probate service model, providing a fact-finding service before death can be arranged in any specific case. It is better, it seems, to rely on the services of a trustworthy traditional probate service provider, than to try to oversimplify with a PPP plan and sign on the dotted line, ignoring the quiet menace of the small print.”
I sincerely hope that we will not see a return to these days when Will Writing and ‘cheap’ Wills become a regular feature in the media, undoing all the good work that has been done to build confidence in the consumer and make Professional Will Writers a credible and trustworthy alternative when making a Will.