InsightsInsight - Wills and Probate - POSTED: May 23 2019
How much does probate cost?
Plans to increase the cost of probate is currently before parliament.
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We reported in 2017 on the new probate fees coming to a halt but not to get too comfortable as we thought it would only be a matter of time before the new fees were looked at again…the time has come!
What is probate?
Probate is the process which gives authority to people (executors or administrators) to administer a deceased’s estate. It is the process for dealing with the assets within an estate and making sure the assets pass to the correct people, either by the terms of the will or by the rules of intestacy.
The Government is planning on changing how it charges people for probate on a “tiered” basis depending on the value of the estate.
How much will you pay in probate fees?
The good news is for those with estates less than £50,000 there will be no cost. However, for estates above this the amount you pay will depend on the value of the estate. For example, for estates valued between £500,001 – £1,000,000 the proposed fee will be £2,500. For estates valued for more than £1m the fees will be £5,000 – £6000plus VAT. The current charge for a £2 million plus property is £215 so it is a substantial increase).
A grant of probate must be applied for before executors can access any of the assets in the estate and there was some uncertainty as to how the court fee would be paid, suggesting that executors may have to pay the fee themselves then claim it back once they have access to estate funds. However, it looks like most institutions, including banks, will release money to pay for the grant of probate like they do for releasing money for funeral expenses.
Why are probate fees changing?
The Parliamentary Under-Secretary for the Ministry of Justice Lucy Frazer MP made a statement about the changes and why they were made.
In her statement, she said: “This new banded fee model represents a fair and more progressive way to pay for probate services compared to the current flat fee and reflects our commitment to protecting access to justice by ensuring we have a properly funded and resourced courts system.
“We are also confident these fees will never be unaffordable. The cost of the fee is recoverable from the estate and executors have several options to fund it. Moreover, the Lord Chancellor retains a power to remit a fee if he considers there are exceptional circumstances.”
When will the changes happen?
The Government are yet to confirm when the change will come in, but it could now be as late as June 2019, with the initial date for implementation being April. It is also unclear as to whether the fee will apply to estates where the person died after June 2019 or whether it is probate applications made from June 2019.
We anxiously wait and see what the Government does and how it introduces this massive increase and the impact this has on executors and the beneficiaries of an estate.
This content is correct at time of publication
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