How a £90 will by Barclays lost half my house
A woman is seeking hundreds of thousands of pounds compensation from Barclays, claiming the bank’s will-writing service resulted in her losing a stake in a valuable London home.
Barclays is contesting the claim.
But, in an interesting twist, Telegraph Money can reveal that when the complaint was previously assessed by the Financial Ombudsman Service (FOS), the bank was found at fault. The Ombudsman ordered Barclays to pay “a fair and reasonable settlement”.
Unusually, Barclays decided to ignore the Financial Ombudsman’s recommendation.
The matter has now gone to the High Court.
Court documents detail how in 2007 Ebenezer Aregbesola used Barclays’ £90 will-writing service to create a will dealing with his various assets including homes overseas and in London. His will instructed half of the London home to be given to his daughter, Tinuola Aregbesola, on his death.
The property was owned jointly by Mr Aregbesola and his wife – who was not Tinuola’s mother. Because of the joint ownership, on Mr Aregbesola’s death in early 2014, the property went wholly to his wife – in contravention of the wishes spelt out in the will.
In order for the will’s conditions to have been fulfilled, Barclays should have severed the joint tenancy agreement, the court document alleges. This would have enabled half of the property’s value to pass as instructed to his daughter. Because this severance process – which the Ombudsman describes as “a simple formality” – was neglected, the joint tenant, Mr Aregbesola’s widow, is legally entitled to the whole property which she can now bequeath as she pleases.
The case highlights the danger of popular, cheap “DIY” wills which are often too simplistic to reflect accurately their owner’s wishes.
In summing up the case the Ombudsman concluded: “The half-share in the property in London cannot be gifted to Miss Aregbesola in accordance with the late Mr Aregbesola’s wishes.
“There is no subsequent right for this to be contested with the co-owner in a court of law. Had the bank referred Mr Aregbesola’s 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.”
But once it received this recommendation Barclays shifted position. It said that since its will-writing division was not regulated, it would not have to adhere to the Ombudsman’s findings. The Ombudsman accepted this was technically correct.
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 by Ms Aregbesola on 19 February 2015. The Financial Ombudsman Service concluded that the matter was outside of the scope of its service.”
The FOS confirmed to Telegraph Money that it accepted the case was technically out of its scope, once Barclays had insisted that it deal with an unregulated arm of the bank.
But the FOS stressed that so far as its adjudicator had been able to assess the case, its opinion remained that Barclays was at fault.
The legal position – and how to avoid similar problems
Where parents remarry and enter into property transactions with their new spouse, wills bequeathing assets to children of former relationships need to be checked.
Sonita Hayward of solicitors Bolt Burdon Kemp warned of “a real lacuna in the law due to the fact that will-writing companies are not currently regulated”. She said this is “particularly concerning when well known institutions such as Barclays offer such a service”.
She explained that companies could afford to offer cut-price fees, such as the £90 charged by Barclays in this case, “because these organisations aim to profit from the fees generated by administering the estate as executor, after the testator’s death.”
Rip-off executor services have been the subject of previous criticism.
In 2011 the Office of Fair Trading said: “‘The wrong decision when appointing executors could mean a potentially expensive professional service is chosen, when a family member or friend may be quite capable of handling the task either alone or with professional support.”
At that point banks including Barclays undertook to review their will-writing services.
Clearly, problems with existing wills remain.
Ms Hayward has experience of joint tenancy problems such as that raised in the Aregbesola case.
“I see cases all too frequently where the problems with the terms of a will and failure to sever a joint tenancy only come to light after the death of the testator, at which point it is too late. Parties are then reliant on the good will of a third party, often a parent’s second spouse, to resolve the issues that they face.
“The difficulty with this is that a joint tenant is under no legal obligation to comply with a deceased joint tenant’s wishes where the joint tenancy has not been severed. The only redress open to the disappointed beneficiary is for them to sue the party that prepared the will.”
“I have previously acted for siblings where one of their parents left them their half of a jointly owned house. The parent in question had remarried and owned the property jointly with their new spouse.
“The solicitors who prepared the will in that case did not take any steps to sever the joint tenancy which existed between the owners. As a result, following the death of my clients’ parent, the gift of the interest in the property failed and the spouse inherited the remaining share of the property.
“My clients had to bring a claim against the solicitors who prepared the will as they had no remedy against the new spouse. We were successful in recovering damages for them. Awareness of these types of claim arise at what is already a very distressing time and cause great additional emotional strain to families.”
Daniel Winter of law firm Nockolds said: “The growing complexity of family structures, coupled with the rising value of estates, means that the administration of estates often calls for greater judgement than in the past.”
“Cases where an individual or organisation has simply been negligent, and failed to grasp the legal responsibilities of administering an estate are becoming more frequent. We have also seen cases where a family member acting as fiduciary is motivated by greed and takes assets which should go to other beneficiaries, or seeks to ‘correct’ a perceived wrong that happened in the past.”
COMMENT:Whatever the detail in the dispute between Barclays and the daughter of its late customer, there is another point at stake here.
This is about Barclays’ decision to ignore the Financial Ombudsman’s recommendation.
Barclays is, of course, a huge, reputable financial services group authorised and regulated by the Financial Conduct Authority. It is thus bound by a commitment to act on the Ombudsman’s findings, even if it disagrees with them.
In this case Barclays has been found against by the Ombudsman and told by the Ombudsman to settle with the customer’s family. But the bank has chosen to wriggle out of paying compensation by arguing that its will-writing division is technically a separate, unregulated business, and thus not beholden to the Ombudsman.
Barclays did a shoddy job and should pay. Instead it has forced a bereaved daughter to risk thousands of pounds mounting a battle through the courts.
£400k case against Barclays for badly drafted will
A woman who’s father took advantage of Barclays Bank’s £90 will writing service has found herself in a dispute with the bank following her father’s death.
She alleges that the bank failed to advise her late father to serve a notice of severance, to ensure she received half of a property which was valued at £800k.
She first complained to the Financial Ombudsman, who ruled against the bank. However, as the claim fell outside the Ombudsman’s remit they had no powers to take any further action and now court proceedings for her £400k half-share must be commenced.
This case highlights the risks of using low-cost will writing services, which are performed by unregulated and potentially unqualified practitioners. A will is far from a simple document and the law concerning wills and probate is complex and continually changing.
At Samuels, we have been preparing wills for clients for over 25 years and the head of our Private Client department, solicitor Abbie Kingdon, holds the highest will writing and estate management qualifications.
We always charge a great value fixed fee for our will writing services, which will be agreed with you in advance.
If you have a Barclays will, or a will prepared by any other organisation (including solicitors), we will check it for free.
Contact us today for a free no obligation discussion about how we can help.