Increased probate fees: what does this mean for you and your loved ones?
The Government recently announced a resurrection of their 2017 plans to introduce a fee structure for probate applications, with the value of the deceased’s estate dictating the cost of the application.
When an individual passes away, with or without a Will, it may be necessary to obtain a Grant of Representation in order to deal with the estate administration. The purpose of a Grant of Representation is to confirm that the individual(s) named in the Grant have the legal right to deal with the deceased’s estate. This will include collecting in the deceased’s assets and distributing them in accordance with either the terms of their Will, or in accordance with the Intestacy provisions if a person died without a Will.
How much is a Grant of Representation?
In order to apply for a Grant of Representation, a Court fee is payable to your local Probate Registry. Currently, the fees nationwide are:
- £155 if a solicitor prepares the application papers on your behalf
- £215 if individuals apply for the Grant themselves
This is a flat fee payable, regardless of the value of the estate, with the only exception being estates that are worth less than £5,000, where no fee is payable.
How will the proposed probate fees be calculated?
The Government has introduced plans to change the fee structure of probate applications, with the value of the estate dictating the fee payable. The proposed fee structure, which is due to come into effect in April 2019 (although an exact date is yet to be confirmed), is as follows:
- Value of estate below £50,000: £0
- £50,000 to £300,000: £250
- £300,000 to £500,000: £750
- £500,000 to £1million: £2,500
- £1million to £1.6million: £4,000
- £1.6million to £2million: £5,000
- Over £2million: £6,000
Under the proposed changes, whilst a number of estates will no longer be required to pay a fee where they would have previously, the majority of estates where a Grant of Representation is required will have to pay up to 38.7 times more than the current probate fees.
What if my Executor can’t afford these increased probate fees?
This increase will undoubtedly have an effect on the way probate fees are paid, as it is unlikely that Executors will have the funds to pay this fee upfront. Further consideration will have to be given as to whether banks will be granted a mandate to release probate fees straight from the deceased’s account, much in the same way as they have now for paying funeral bills and Inheritance Tax.
Do I need to amend my Will?
When making a Will, you will need to consider not only the potential probate fees payable and how these will be paid upon your death but also how much money you will have to gift via your Will.
If, for example, your estate comprises mostly property that you are leaving to loved ones, you may not have any cash assets to leave gifts of money to other family members or friends, as any cash you hold will be dramatically reduced or completely lost in probate fees.
How we can help
You should seek legal advice at the time of someone’s death, as to whether a Grant of Representation will be required. It will much depend on the size and nature of the individual assets.