Probate Fees Face Astronomical Hike

Under new plans announced by the Government, probate fees could rise from £155 to £20,000 for those in England and Wales who die with large Estates.

Probate Fees Face Astronomical Hike

The proposed fee regime will move from a flat to a banded fee approach, proportionate to, and rising with, the value of the Estate.

 

The proposals are out for consultation until 1 April 2016.

What is Probate?

In England and Wales, probate is the process of applying for the right to deal with a deceased person’s property, money and other possessions – known as their ‘Estate’.

 

If a person has left a Will, they will usually have appointed an Executor. This Executor then has to apply for a ‘Grant of Probate’ from the Probate Registry Office.

 

Around £81 billion of assets is dealt with through probate each year – an average of 270,000 applicants – according to the Ministry of Justice.

 

But not all Estates need to go through probate. The Ministry of Justice says only around 50% of deaths lead to an application for a Grant of Probate.

 

This could be because the bank is willing to release the deceased’s funds without probate, because assets are jointly owned – a house for example could be transferred to the remaining spouse without the need for probate, or because the value of the assets are below £5,000.

 

If a person dies without making a Will, the Law of Intestacy applies.

How Much Does Probate Cost?

At present, applications for Grants of Probate are set at £155 when sought by a Solicitor, and £215 when sought by an individual.

 

The Government says this higher fee for personal applicants reflects some of the additional administrative work that must be done by the Probate Service.

 

However, individuals making probate claims are guaranteed to be reimbursed from the deceased’s estate – so they won’t be left out of pocket.

 

Individuals applying for probate for Estates worth less than £5,000 do not have to pay a fee.

How Much Will Probate Cost Under The Government’s New Plans?

The Government’s proposals will see the cost of probate increase in accordance with the value of the Estate:

Value of Estate (Before IHT) Proposed Fee
Up to £50,000 £0
£50,000 – £299,999 £300
£300,000 – £499,999 £1,000
£500,000 – £1 million £4,000
£1 million – £1.6 million £8,000
£1.6 million – £2 million £12,000
Over £2 million £20,000

Is Anything Else Changing?

The Government has proposed moving the probate application system online to make it quicker and easier, as it would remove the need to visit a court or a firm of Solicitors to swear oaths or lodge papers.

 

It has also floated the idea of stopping a fund to help those less well off to pay for probate fees in the first instance.

 

It says often money from the deceased’s bank account can be used to pay the fees, or a short-term loan can be acquired from the bank if these aren’t available.

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