Probate Fees are set to rise
The Government has said that Probate Fees will increase in 2019. What does this mean for you?
When a person dies, their executor (appointed by Will) or personal representative (when there is no Will) will usually have to apply for the Grant of Probate in order to access and distribute their estate.
They send the Grant to banks, pension companies and so on, to collect in the person’s assets. They use it to confirm they are legally entitled to pay off liabilities and close accounts in the name of the deceased.
Currently, there is a set fee of £215 to obtain a Grant of Probate.
What are the changes?
The fee accompanying a Probate application will be calculated on a sliding scale. It is likely to be around 0.5% of the value of the estate. This doesn’t sound like much. But, given that the most valuable asset in most estates is the house or land, and the market has once again been on the up, this is going to have an impact on most people in our area.
For example, an estate worth £250,000 – which is not unusual in this part of England – will attract a probate fee of £1,250.00. This is a large increase on the current fee.
Why are increases being implemented?
The Justice Minister argues that the Court services (HMCS) are strugging for funding, and this is a necessary increase to ensure continued access to justice for all.
Unsurprisingly, the hike in this administrative fee has not been well received. Those in the probate industry point out that there will be no additional service offered, or work done, to justify charging such a large fee. There is no basis on which to link the fee payable to the value of the estate as an application relating to a more valuable estate will not necessarily cause more work for the Probate Registry. In essence, this appears to be an additional inheritance tax, introduced by stealth.
What can you do next?
We will consider the likely probate valuation of your estate and discuss the most efficient way to manage your affairs.
If you do not already have one, it is essential to draw up a Will to ensure your estate is distributed in line with your wishes.
It is possible to put a sum of money into trust to cover the cost of the probate fee. This will give your executor access to sufficient funds to cover the probate fee at the required time.