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How do the increased probate fees affect bereaved families?

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Government announces probate fee increase

The government announced its plans to change the way probate fees are charged back in November 2018. It was proposed that families would pay probate fees where an estate is worth more than £50,000. For those estates over this threshold, the fees would be paid as a sliding scale depending on how much the estate is worth.

Since the plans were revealed, the new fees have been branded as a ‘stealth tax’ and a clear abuse of power. By labelling the new costs as a fee rather than a tax, the government have bypassed proper parliamentary scrutiny. Therefore the proposals can only be overturned by an MP issuing a formal protest in the chamber. Sir Vince Cable, the leader of the Liberal Democrat party, has said he will issue such a protest when it is considered by the commons and a number of other MPs are set to join him.

What will the new fees be?

  • Up to £50,000 – no charge
  • £50,000 to £300,000 - £250
  • £300,000 to £500,000 - £750
  • £500,000 to £1 million - £2,500
  • £1 million to £1.6 million - £4,000
  • £1.6 million to £2 million - £5,000
  • Above £2 million - £6,000

Currently for estates over £5,000 a £215 flat fee applies, or £155 if a solicitor applies on the family’s behalf. Whilst many families will benefit from the new threshold for fees being raised to £50,000, those families with estates over the inheritance tax threshold will have to pay both the higher probate fees and 40% in inheritance tax.

The Competition and Markets Authority (CMA) have been asked by the LEBC Group to investigate the proposed probate fees as there are concerns that the changes would cause ‘hardship and distress’ to the bereaved families. LEBC’s director of public policy Kay Ingram said the rise in probate fees ‘strikes me as a classic example of exploitative pricing by a monopoly provider, where the consumer has no choice but to use the service at a time of extreme vulnerability’.

There is certainly truth in this statement, as families will be left with no other option than to pay the higher fees to obtain probate which ultimately allows them access to the deceased’s money. In many cases, the persons tasked with obtaining probate are the spouse or children of the deceased person. They are effectively forced to put their grief aside at one of the worst times in their lives, and personally fund these increased probate fees.

In addition, the cost of obtaining death certificates has recently risen from £4 to £11 per certificate. If families therefore require ten certificates, they will now be paying £110 as opposed to £40, and again this cost is paid by the family personally before they have access to the deceased’s money. It’s a staggering increase when you consider that most solicitors will certify an original death certificate for £5 per copy, and such certified documents are widely accepted by institutions.

All in all, it’s clear to see that a heavy burden is put on bereaved families at a time when they are not necessarily in the correct mind frame to deal with an estate. At Stephensons, we offer assistance with obtaining the grant of probate and administering estates, and we also offer advice appointments for those who are unsure of what they are required to do. Our specialist probate department offer guidance and support to families when they need it most. If you need help dealing with a loved one’s estate, give us a call on 01616 966 229.