Why ‘free’ Wills can cost you more in the long run
Everyone likes something for free.
And as Free Wills Month arrives today, it may well galvanise you into action to finally get your Will written, in return for a donation to your chosen charity. An important job ticked off your list, and a feel-good glow that you’re contributing to a worthy cause. It’s win-win, right?
Unfortunately, it’s not that straightforward.
Let’s be quite clear that a charity donation is a good thing if that’s what you want and you’re happy with how much you’re giving.
But the Will industry isn’t regulated, which means Will-writers are not always completely honest and upfront about what you’re signing up for. Especially when you’re being offered a service that claims to be free. True costs can easily be hidden, or arise only after death when things don’t go as assumed.
If a Will-writer isn’t focused on your best interests, you’re less likely to be getting the quality of Will you need to fully protect your family. And it could cost you and your beneficiaries vastly more money than if you paid for your Will in the first place.
We’ve put together some key points to be aware of, so you know what to look out for and what to avoid…
You probably won’t save money by giving to charity – don’t be fooled
Some Will-writers encourage people to donate 10% of their estate to charity by explaining it will reduce their inheritance tax bill. The impression often given is that one somehow offsets the other.
The main reason for this is that 95% of people won’t be paying inheritance tax anyway. Under 5% of estates in the UK pay any inheritance tax at all *. So, claims of savings are misleading for the vast majority of the population. In most cases any charity donation will come directly out of your pocket.
Even if you do pay inheritance tax, your 10% charity donation will always be substantially more than the tax you’ll save. Ultimately, your donation will always reduce the amount of money you leave to your beneficiaries. Which is fine, if that’s what you actually want.
So why do Will-writers encourage charity donations in this way? Well, possibly because of pre-agreed commission on amounts left to certain charities. If you genuinely do want to donate to charity, check that 100% is actually going to the charity and that there’s no commission involved. Be sure it’s your chosen cause, not theirs.
You could get tied into paying fees later on
One of the reasons Will-writers are happy to write your Will for free is because they can use it as an opportunity to write themselves into your Will as your executor. Which means they’re legally allowed to manage your probate.
On the surface, this sounds like it could be quite helpful – in fact some Will-writers even claim it as a benefit. But what they don’t tell you is that probate services can come with hefty fees, which your estate will have little choice but to pay. So, you may get your Will written for nothing, but you’ll end up paying a lot of money further down the line.
It may not even be your original Will-writer who ends up charging you for probate (in fact many are not probate providers themselves). Your ‘free’ Will becomes a saleable commodity for the Will-writer, and can be sold on to probate specialists as part of a ‘Will bank’ (other Wills like yours). Buyers of Will banks are only likely to be interested in their own financial gain – in other words charging you as much as possible to provide a probate service you may not have even asked for.
To reduce the risk of excessive charging, ensure any professional that has a role in your Will commits in advance to stand down if requested by your beneficiaries. And it’s always a good idea to include someone you know and trust as a joint-executor.
Poor advice could cost you dearly (and not just financially)
Because the Will-writing industry isn’t regulated, it means that Wills can be written by people who don’t always know what they’re doing. Over 35% of the Wills we’re asked to review at Kinherit have major issues, making them not fit for the job in hand.
Mistakes can easily affect the value of an estate, or have other serious practical consequences.
For example, one Will we reviewed failed to define a guardian for a couple with young children, which would have led to them going into care if the parents died. Another invalidated spousal exemption (where the surviving spouse is not charged inheritance tax) which would have probably meant selling the family home in order to afford the tax bill. We’ve even seen a client named as the beneficiary of their own estate.
Checking your Will-writer is accredited by the Society of Trust and Estate Planners (STEP) is a good way to confirm qualifications (not just some knowledge) and this applies equally to solicitors and non-solicitors.
A STEP qualified Will-writer can also help you consider the full range of options available to you, like forming a Trust, reflecting business interests or arranging Lasting Power of Attorney. Many people don’t realise until it’s too late that they may need these things to protect themselves and their family.
Will-writers without STEP qualifications are more likely to only give you the most basic service, which may not be right for your situation.
Get some advice that’s genuinely free
At Kinherit, we’ll give you plenty of advice without taking a penny from you. You only pay us if you’re totally happy with what we’ve suggested and when you’re ready to actually create your Will.
It’s a risk to us that you’ll walk away, but we’re prepared to take it because we have confidence that our wider service offers you great value. Not only are we STEP qualified – which means we can advise on any and every aspect of end-of-life planning – we also use unique technology to future-proof your Will and wishes.
Our secure online platform gives you your own personal Kinvault – a place to store everything from beneficiaries’ contact details to important passwords and instructions on where to find your spare house key. The Kinvault is easy and instant to update anytime, and simple to share and execute when you die. Which keeps your plans in your hands.
If you decide to use us for your Will, you can be confident that whatever you want to happen will happen, with no assets or information missed and without your family having to pay or do anything extra.
But if you’re still keen to take advantage of a free Will this month, don’t forget the points we’ve made. And bear in mind, there rarely is such a thing as a free lunch.
*House of Commons Inheritance Tax briefing April 2021 https://commonslibrary.parliament.uk/research-briefings/sn00093/