Drafting Your Will With The Bank: Free or Fatal?

While it seems like a logical decision to keep your Will where your money is, it’s not that cut and dry. 

Contrary to popular belief or marketing, large financial institutions do not have your best interests at heart. While the process of setting up your Will with a bank may seem like a painless process, to begin with, this ‘free’ service can come at a great cost to your loved ones in the event of your death. We recommend that you have a specialist or legal practitioner draft and execute your Will and here’s why. 

Having a specialist draft your Will and manage your estate puts the control back in your hands. They provide care and develop a relationship with you built on trust. They are able to create a Will that is specialized and takes into account your unique needs and wrap up your estate efficiently. You won’t just be one of the files on an already full desk.  

We have detailed the five main reasons why we would advise you not to have your Will drafted and stored with a bank.

Control over your assets

If your will is ‘with a bank’, they are the executors of your Will. Although at first, this seems like a free service there is often a condition with this free service – they require to be nominated as executors and an executor to any estate in South Africa is entitled to a 3.5% excluding vat share of whatever the final estate is worth. When a bank or other financial institution is the executor of your estate, your family loses control. You have no choice over who executes your estate, only the institution. Your spouse and your family are at the mercy of a powerful institution and estates may take years to complete. The bank also has the privilege of investing the estate funds in any way they please. Having someone who you know, trust and is qualified to administer your estate gives you more control and peace of mind that your family and loved ones left behind will be cared for the way they deserve and in a way you would have wished, it is the personal connection you have whilst alive to the executor on your estate that is the key here.

Lack of communication

In the event of your death, your spouse or family members have to communicate with the executor on a regular basis. If the executor is a bank, it’s not your friendly branch manager around the corner or the consultant you’ve come to know if you even go into a bank anymore. The executor will be the bank’s trust division probably in one of the major cities. Apart from being a stranger, far away, the executor is a bank clerk that is frequently replaced and your estate is but one amongst hundreds in the system. Just think of the frustration when having to telephone a bank – one is forever confronted by computerized voice directions and you hardly ever get to talk to a real human being! Never mind the emotional turmoil at the time, just think of the telephonic and administrative nightmare that you are faced with when it comes to your loved one’s estate.

The care of your assets and loved ones is not paramount: there is no relationship built on trust

If, after your death, the estate does not have much value, a bank will not take the appointment as executor. It’s just not ‘worth their time’. In that case, the heirs will have to approach the Master of the Court to appoint someone. Whether you have had dealings with the court or not, you will probably know that this is not as easy as it sounds, especially with no legal knowledge or assistance. You can voluntarily remove the bank as your executor but only by way of a court order. If the bank has been appointed as your executor, the heirs and/or the surviving spouse have to approach the High Court at exorbitant legal costs and risk for an adverse order. Courts only remove executors in extreme circumstances. If things go wrong, your recourse is extremely limited, costly and difficult to achieve. 

Specification and protection of your assets

Try as you may to simplify things before your passing, Wills are often complicated and the “standard” template will not suffice. Often, there are also complexities like trusts which must be established. In such instances, banks are not equipped to render a professional service. You may be provided with a “standard” will that costs you nothing when drafting it, but your heirs will pay the price!

Banks are not sensitive to time, your estate could be tied up for years

Banks have a tendency to drag their feet with estates. One of the reasons for this is the fact that the “executor” is a bank employee who has no direct interest in the speedy completion of the estate. Your case is just another file to them while your surviving spouse and heirs suffer the financial losses caused by the delay in the transfer of funds and assets.  Banks also have the advantage of deciding how estate funds are invested, often not at the best rates for the benefit of heirs.

At Marsh Fidelity, we find our fulfilment in knowing that we offer a boutique, bespoke service with exceptional attention to detail as opposed to offering a variety of services that cannot all receive our full and undivided attention. Our sole focus is caring for our client’s needs when they are no longer able to and ensuring their deceased estates are attended to with care and efficiency. We also work closely with CFPs, insurance companies and lawyers to provide their clients with this specialized service. In doing so, we are able to give them time to focus on their clients’ needs and core service while knowing that their clients’ estates are being taken care of.

Need help moving your Will? Reach out, we’d love to help. [email protected]