Make sure you've got a will- but not drawn up by Barclays
While no one likes to talk about popping their own clogs, figures suggest that around half of UK adults don’t have a will. Writing a will is important as it is the only way to ensure your stuff ends up with whom you intend (rather than relying on intestacy laws), and there are a number of low-cost ways to get a will prepared, including Will Aid every November, meaning you won’t break the bank to get one. Or so you’d think. A legal case is now headed for the high court, where a £90 Barclays will has led to legal action chasing hundreds of thousands of pounds in lost inheritance…
The case in question involves a man who owned a London home who used Barclays’ will writing service to determine where his assets would go. He directed that his daughter should receive his half of his London home on his death. So far so simple. However, the problem was that the house was jointly owned with his wife (who is not the mother of his daughter), and where property is owned as ‘joint tenants’ (which is normally the default position when buying houses as a couple), the property will pass to the other joint tenant on death, irrespective of and in priority to any provisions in a will. This meant that when the father died, the half share of the property was legally and correctly inherited by his wife and the daughter received nothing.
The daughter’s claim against Barclays is that they should have been aware of the legal priority given the joint ownership, and that they should have taken steps to ensure her father’s wishes, as detailed in his will, were fulfilled. Breaking a joint tenancy and replacing it with a ‘tenants in common’ form of joint ownership is a simple legal formality, but it would then have allowed separate joint shares to be bequeathed by will instead of automatically passing to the other joint owner.
As Barclays is, as we all know, a bank, the daughter first took the case to the Financial Ombudsman Service (FOS), who found that the bank was at fault. The Ombudsman found that the property had passed in accordance with legal procedure but in a manner contrary to the wishes of the deceased. The FOS said:
"There is no subsequent right for this to be contested with the co-owner in a court of law. Had the bank referred [the] will instruction form to its solicitors I am aware [the solicitors would] issue the notice of severance as a matter of good practise. In order to resolve the complaint we would usually ask the bank to put the consumer back in the position they would have been had the correct steps had been taken in the first instance."
"Unfortunately, the share in the property in Balham is incapable of being gifted now. Therefore, I would ask Barclays to come up with a settlement that would fairly and reasonably resolve the complaint – taking into consideration the value of the property and the intended gift."
However, given that a half share of a property in London is worth about 172 million quid these days, Barclays have taken the questionable step of ignoring the Financial Ombudsman's recommendation to pay ‘fair and reasonable’ compensation and the matter has now gone to the High Court.
But how can Barclays, a massive financial services group authorised and regulated by the Financial Conduct Authority and therefore bound to act on the Ombudsman's findings, even if it disagrees with them, just decide to ignore a decision it doesn’t like? Well, it has claimed that actually, its will-writing division is entirely separate, and, in common with the whole will-writing industry, is not regulated. As an unregulated business, therefore, it would not have to adhere to the Ombudsman's findings.
In an emailed statement, Barclays told Telegraph Money: “The matters raised are the subject of ongoing legal proceedings. It would not be appropriate to comment on the specific points raised. We note that the Financial Ombudsman Service issued its latest decision in relation to the complaint raised… on 19 February 2015. The Financial Ombudsman Service concluded that the matter was outside of the scope of its service."
The FOS confirmed that it accepted the case was technically out of its scope, once Barclays had insisted that it deal with an unregulated arm, but stressed that its opinion remained that Barclays was at fault.
So what have we learned? While getting a will is definitely still A Good Idea, you should always make sure you get your will prepared by a reputable will writer. And we all know banks are not reputable types. Note that wills prepared by a solicitor will be regulated under solicitors regulation rules.