The recent Panorama investigation into the will-writing business raised some serious issues about what can go wrong in an unregulated industry.
The programme has led to calls for will-writing to be fully regulated and many IFAs say writing a will is not an area that can be ignored as there can be big problems when a person dies intestate.
The latest figures from the Assets and Wealth survey published by the Office of National Statistics show the average household has a net wealth of £204,000, including personal pension assets, or £145,000 if pension assets are excluded.
Many households have net wealth far higher than the average. The ONS figures show the top 20 per cent of house – holds own more than 60 per cent of the personal wealth. The rules on intestacy state if there are no other eligible beneficiaries or an estate is worth less than £250,000, then the spouse or civil partner will receive the whole estate.
If there are children or other dependants and the estate is worth over £250,000, the spouse or civil partner will get the first £250,000 of the estate free of tax and a life interest in half of the remaining estate. There is a strict order in which surviving family members receive a share of the remaining assets.
There is also the issue of tax.
With only the first £250,000 being paid tax-free, the resulting tax bill can be much higher than it needs to be.
According to Unbiased.
co.uk, 57 per cent of the adult population -28 million people – do not have a valid will.
Chief executive Karen Barrett says: “Intestacy could mean assets and money going to people the deceased had not wanted to benefit, meaning your family could be left to dispute over your estate, be charged a great deal in inheritance tax or your possessions could not go to the intended people.”
Wills can form an important part of even the most basic financial planning. Evolve Financial Planning director Jason Witcombe says the subject of wills comes up with every one of the firm’s clients: “We actively bring it up. We think it would be wrong of us not to.”
Solicitors still make up the majority of the market but professional will-writers are taking an increasing slice of the market. Figures from the Ministry of Justice from March this year show solicitors are responsible for writing 88 per cent of wills, with professional will-writers accounting for 7 per cent of wills.
Many people are put off by the perceived costs involved.
The Unbiased research suggests cost is the fourth-biggest reason for not writing a will, following apathy, a lack of awareness of the need for a will and indiv – iduals think – ing they do not have enough wealth to make it worthwhile. The Office of Fair Trading says the cost of having a will drawn up is often £100 or less and even when the cost is higher, it can be well worth the cost of getting it done properly.
Witcombe says: “Where clients have complicated financial affairs, we recommend they go through a solicitor and pay the extra.”
But, as Panorama demon – strated, it is not just the cost of the will that can cause problems.
Witcombe says: “It is not the writing of the will they are making money on. It is being the administrator of the assets in the estate.”
The OFT says the costs for executing a will can be high and can vary considerably.
For an average estate, a professional administrator could charge between £3,000 and £9,000. The OFT recom – mends people to shop around for the best terms. The other problem highlighted in the BBC’s investigation was what happens when things go wrong. The act of will-writing is an unregulated activity, meaning that anyone can set themselves up to carry out the business. People can find themselves without anyone to go to if there is a complaint about the services of a profess – ional will writing service.
Many solicitors point out, even if will-writing itself is unregulated, all lawyers’ activities are subject to regulation, full professional indemnity insurance and the oversight of the Solicitors Regulation Authority and clients have recourse to the Legal Ombudsman. Professional will-writers point out that many solicitors are not specialists in wills and have no specific qualifications and are not required to carry out any continuing professional development on the subject.
However, the differences in regulation could be soon become a thing of the past.
The Legal Services Board, which oversees the regulation of lawyers in England and Wales, says it is concerned that will-writing is outside regulation and it is speeding up a review of the business due this autumn. In Scotland, the Scottish Parliament is considering legislation to introduce regulation for willwriting by non-solicitors. Scottish executive community safety minister Fergus Ewing says the rest of the UK should follow suit. Ewing says: “Anyone who is charging a fee for writing a will must be regulated. They must have appropriate qualifi cations, they must have proper indemnity in place. At present, none of this protection exists.
I hope that justice will be done for people, throughout Britain ideally, in protection against crooks, cowboys and conmen.” Several solicitors have ech oed the call for greater regu lation in the rest of the UK.
Wolferstans solicitors head of wills, trusts and probate Samantha Buck – thought says the number of contentious probate cases is increasing rapidly and regulation is needed to avoid the trouble that poorly drafted and executed wills create. She says: “A professionally drawn will is much more likely to be accepted once you die.
I believe it is essential for the Government to take action and save the public from this unnecessary chaos.” Many parts of the willwriting business accept the need for greater regulation.
The Will Writing Company managing director and founder member of the Institute of Professional Will Writers Tom Gormanly says: “We recognised early on that proper training and ethical procedures would have to be an essential part of the industry. It has been something of a surprise that legislation has not been introduced before.”
In the meantime, Witcombe says one of the best ways for control to be kept over the execution of the will is for a friend or family member to be appointed as the executor.
The executor would then have the authority to appoint a professional administrator to help execute the will but would remain in control of the process and, crucially, would have the power to replace the administrator if they felt it was necessary.