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Probate fees set to rise from May 2017 despite lack of support
- AuthorJane Cox
The Ministry of Justice have recently announced that probate fees will increase from May 2017, even though only 1.6% of respondents agreed with the proposals during the consultation process. Jane Cox, Private Client Partner, reviews the new charges that will be coming in and advises how people can act now to protect their assets.
What are Probate fees?
Probate fees are paid when applications for Grants of Representation are made, which are essential to enable beneficiaries to access money from banks or building societies, as well as being able to sell properties and other assets left to them. The charge falls to executors to pay to start this process.
The fee is currently set at £215 for all estates worth over £5,000 if you complete the application yourself, or £155 if you use a solicitor to assist. From May, this will all be changed. Estates under £50,000 will not be charged, however Probate fees will then be staggered depending on the value of the estate. These bands are as follows:
- For estates worth between £50,000 to £300,000, the charge will be £300
- For estates worth between £300,000 to £500,000, the charge will be £1,000
- For estates worth between £500,000 to £1million, the charge will be £4,000
- For estates worth between £1million to £1.6million, the charge will be £8,000
- For estates worth between £1.6million and £2million, the charge will be £12,000
- For estates worth over £2million, the charge will be £20,000
“This final tier means that these people are seeing a 9,200% increase on the current fees,” explains Jane. “It is surprising that the proposals have been approved, not only because less than 2% of respondents agreed to the fees, but also because only 8% agreed that the fees should be staggered in line with estate value. The main argument against this is that there is no additional work that is required based on the size of an estate. These fees are not the only charge people will need to consider at an already emotional time, as there will also be inheritance tax that is payable; currently levied at 40% on assets above each individual's £325,000 threshold.”
How can I prepare for the new Probate fees?
It is expected that these new fees could raise more than £250million a year, and while the Government acknowledges that the probate process is mainly administrative, the funds will assist in supporting the rest of the court and tribunal system.
“These new fees are likely to put people under unnecessary financial pressure as they need to be paid upfront at the time the application is made,” continues Jane. “If you are currently in the situation where you are dealing with an estate of a deceased loved one, we urge you to apply for Probate prior to the 1st May.”
Importance of estate planning
Jane concludes, “These new fees highlight how important it is that you have sought advice when estate planning as there could be ways that your loved ones could minimise the probate fees payable. For example, if your only asset is a property is owned as joint tenants in joint names with the property going to the surviving spouse, a Grant of Representation would not be required. A Trust can also help secure your property and assets and could lead to reduced probate fees, making them preferable to making lifetime gifts to children. No-one likes to consider their own death, but making a Will and plans for your estate while you can are the only way to ensure your loved ones will remain financially stable in the future.”
To discuss the new Probate fees with Jane, or the find out more about estate planning, you can contact the team on 01329 222075 or email email@example.com.
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice. All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.