What happens when solicitors appoint their firm to be professional executors?
It is almost impossible to challenge whatever fee is finally imposed, as lovemoney.com reader Steve from Newcastle found out.
His widowed mother, aged 81, died in late 2003. Her £700,000 Will was simple. Sell the house, liquidate the bank accounts, pay inheritance tax and then divide the balance equally between her two sons who were both executors. Or it should have been simple.
About a year before she died, Steve’s brother Alan was in the midst of a divorce. To prevent Alan’s estranged wife from getting anything if he died suddenly, a solicitor persuaded their confused mother to make a new will. The lawyer would replace Alan as an executor. Why this helps is unclear.
The lawyer did not explain his fee structure and the brothers only found out when it was too late that he would charge his full hourly rate for every item of work. On top of this he would also charge a percentage of the estate.
His bill came to over £25,000. A competent solicitor could have easily done it for £5,000.
Family executors cannot charge for their services and cannot even claim expenses. But professionals such as lawyers, accountants or financial advisers can. And they get their money because they have the first pick at the estate.
The family were angry and asked him to stand down as executor some weeks after the mother died. The solicitor refused and charged the estate £1,000 for “counsel’s opinion” that he could not be sacked.
The family appealed to the Remuneration Certificate division of the Law Society, the solicitors’ professional body. This has now been shut down but was supposed to offer arbitration when legal fees were considered too high.
It backed the brothers, telling the solicitor to back down to around £10,000. But as the Law Society scheme was not legally binding, so he refused to take any notice. He had his money and was holding onto it.
Since then, the brothers have spent more money attacking the solicitor via the courts. But it has proved expensive and, so far, has not got them very far.
The moral of this cautionary tale? You can’t always trust solicitors. And ensure that executors of any Will are confined to family members or trusted friends. They will have the choice of doing it themselves or getting a moderately-priced professional to carry out the work.
Executors can be, but don’t have to be, beneficiaries under the Will. Once you let a solicitor or bank in to your Will, you are storing up trouble for your family.