Over-50s unwittingly squander millions of pounds on wills and probateThursday 14 July 2011
Over-50s unwittingly squander millions of pounds on wills and probate
"Average" person could lose out by £7,200
With The Probate Service announcing* that a quarter of a million applications for probate were granted in 2010, Saga warns that the over-50s are squandering millions of pounds a year on once-in-a-lifetime probate and will-writing decisions. Friends, relatives, charities and other benefactors are being deprived of up to five per cent of their estate value which could be around £7,200 for the average estate**.
Independent research commissioned by over-50s organisation Saga*** shows that 90% of older people choose a solicitor or financial advisor when it comes to making wills and dealing with probate, despite the fact that some charge as much as 5% of the value of estates – enough to buy a car, a holiday of a lifetime, or a deposit on a house for somebody named in a will.
“What’s more, at a significant time of stress, when there’s been a loss of a loved one, only 63% of the 11,000 respondents said they would shop around to compare services thoroughly, meaning they could well be losing out – cynics might say that some advisers are exploiting people’s distracted decision-making at a time of difficulty,” said Roger Ramsden, Chief Executive of Saga Services.
“The cost to families if they pay unnecessarily high charges could be astronomical – but it doesn’t need to be.
“Saga always aims to deliver good value for older people, and we deal with probate matters for a cost of as little as 1% of the value of the estate. Some affairs can be complex, and tax and legal complications can lead to problems and stress during what is already a very difficult time. We would strongly advise people to get professional help rather than attempting to go it alone where probate is concerned but make sure you don’t over-pay.”
“Around 500,000 people die each year. Even assuming only 10% have homes of average UK value – around £180,000 – and ignoring other assets, then commission or charges on probate matters involving the house alone could add up to £225 million for the legal and financial services sector even if they take just 2.5% and could be as much as £450 million if they charged the higher rate of 5%.
“For the individual owning an average-value home, worth £180,000 it could mean the estate paying a commission of as much as £9,000 – easily enough to otherwise pay for the holiday of a lifetime, a new car, or a home deposit for a family member named in a will.
“That’s a big number, and because wills and probate matters are literally once-in-a-lifetime for most people, few outside the legal or financial professions are expert - most people are unaware of the range of services on offer and how different the costs can be. Simple research can save hundreds, if not thousands of pounds, so we really do urge people to shop around.”
For further information, please contact the Saga Press Office on 01303 771529
*http://www.justice.gov.uk/downloads/publications/statistics-and-data/courts-and-sentencing/jcs-annual-2010.pdf Judicial and Court Statistics 2010, released 30 June 2011
**For the average value home the estate could pay commission of as much as £9,000. Saga’s price for probate would be £1,800. The cost difference being £7,200.
***The survey was conducted in March 2011 SAGA Populus Panel of over 12,523 people.
Saga’s probate service specialises in helping with a person's property and financial affairs after their death. This includes obtaining probate (or, in Scotland, confirmation), managing the deceased's estate and inheritance tax implications. As well as the 1% charge to deal with the estate, Saga’s probate service can also offer a fixed fee service to deal with the legal paperwork only, leaving the family free to handle the other aspects themselves (again cutting down the final bill). Saga Legal Services can be contacted on 0845 300 2097.
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