Changes to Probate fees are currently under consideration by the Government in a move which could have significant financial consequences for those involved in the process.
In England and Wales (the process is different in Scotland and Northern Ireland) individuals must apply for the legal right to administer a deceased person’s estate – which includes all assets, not just property.
There are nuances involved – for example, if the deceased leaves a Will, the executor of the Will receives a Grant of Probate, whereas those administering an estate for somebody who did not make a Will receives Letters of Administration.
In simple terms, the purpose of a Probate is to collate all of an individual’s assets, pay any outstanding debts/bills and distribute the remaining assets accordingly.
Applying for Probate can be a testing period given it often falls to friends or family of the deceased to handle such matters. Consequently, this can be a difficult time both emotionally as well as being confusing for those unfamiliar with the process.
So what are the potential changes – first mooted in November of last year – and how could they affect you?
In a nutshell, the Government is proposing a sliding scale of Probate fees depending on what each estate is worth. Since 1999, applications have been subject to a fixed fee.
It is argued that this new model will create greater fairness and offer a more progressive way to pay for Probate services. It is also hoped that an increase in fees received for Probate will directly contribute to enhancing the overall court service.
So in financial terms, what could these proposed changes mean to you moving forward, should you be applying for Probate?
While the additional fees are relative depending on the size of a deceased person’s assets, the proposed revised fees can nevertheless be substantial.
Proposed changes include:
• Estates worth less than £50,000 – will pay nothing (£215 saving on current system)
• Estates worth from £50,000 up to £300,000 – will pay £250 (£35 increase)
• Estates worth from £300,000 up to £500,000 – will pay £750 (£535 increase)
• Estates worth from £500,000 up to £1m – will pay £2,500 (£2,285 increase)
• Estates worth from £1m up to £1.6m – will pay £4,000 (£3,785 increase)
• Estates worth from £1.6m up to £2m – will pay £5,000 (£4,785 increase)
• Estates worth more than £2m – will pay £6,000 (£5,785 increase)
As with many changes to legislation, there will inevitably be those who benefit financially and those who don’t. For those negatively impacted, there is still time to gain Probate at the current flat-rate fee – but that time is running out.
For those likely to fall into a bracket that involves a higher fee, there is still the potential for payments to be based on the current flat-rate system – with the proposed changes that were due to take effect from 1st April currently temporarily delayed.
Interpreting and navigating the often confusing and complex area of Probate can be difficult and challenging at the best of times – especially if you are acting on behalf of a recently departed loved one.
Add to this the likely changes proposed by Government which could have significant repercussions in respect to the fees paid by an estate and the importance of reaching out to a trusted, expert and compassionate team of solicitors with experience in the Wills, Trusts and Probate arena becomes clear.
You want to be sure your wealth goes to the right person at the right time. Wills & Trusts can guide and support you through the entire Probate process. Find out more about our estate planning services and get in touch with the team here