The government has recently announced changes to probate fees with some charges escalating to £6,000.
In England and Wales, probate fees (the fees paid when administering someone's estate after they die) are set to be paid as a sliding scale depending on how much the estate is worth, rather than as a flat fee from April 2019.
At the moment, families pay a flat £215, or £155 if they apply through a solicitor, on estates over £5,000. The threshold at which they will need to pay probate fees is set to be increased to £50,000 however the proposed changes are said to result in around 280,000 families a year paying more than the current £215 fee with an estimated 56,000 facing fees of between £2,500 to £6,000.
It is currently, and will continue to be the case, that executors will need to fund the probate fees upfront before reclaiming the money from the estate when probate has been granted. There is concern that this may result in some executors having to take out loans to cover the required fees.
George Hodgson of the Society of Trust and Estate Practitioner has commented that “it seems the government wants to turn probate fees into an extra death tax” and “although the government has reduced the charges, it has not dealt with the fundamental principle of using bereaved families to prop up the legal system”. If introduced, the increase in fees are expected to make the Ministry of Justice an additional £185 million by 2022-23.
In a written statement to Parliament, the Parliamentary Under-Secretary for the Ministry of Justice Lucy Frazer MP said: "This new banded fee model represents a fair and more progressive way to pay for probate services compared to the current flat fee and reflects our commitment to protecting access to justice by ensuring we have a properly funded and resourced courts system”
Interestingly, the government has failed to explain why it is choosing to place this burden on bereaved families and have also failed to comment upon why the changes were not included in last week’s budget therefore being enacted by secondary legislation later this month.
Although the exact date when the new fees will take effect is not yet known, they are anticipated to apply to applications for probate received after that date, rather than to deaths which occur after that date. To avoid the fee increase, applications must be received by the probate registry before the implementation date. If you are in the early stages of dealing with an estate and have not yet applied for the grant of probate, we recommend that you act as soon as possible in order to minimise the chance of having to pay the increased fees.
Our probate specialists can advise you on what you need to do and our specialist advisors can also advise on ways to mitigate the impact of these fee increases as part of their work in reviewing your Wills and succession planning. Call us on 01616 966 229.