Can you plan for the huge increase in probate fees?

The UK Government has said it will go ahead with plans to raise probate fees, despite a panel of experts saying that it was unlawful. Sarah Cornish of Coodes Solicitors’ Wills, Probate and Trusts team, comments.

“The Government’s planned changes to probate fees have sparked outrage and have now been deemed unlawful by a parliamentary committee. Separate from inheritance tax, probate fees are made to obtain a grant of representation, which gives an individual the right to deal with a deceased person’s estate. Currently there is a flat-rate fee of £215, or £155 if using a solicitor. The Government announced that, from May, this will be replaced by a banded pricing structure, based on the value of an estate. This would see the beneficiaries of a £2million estate paying fees of £20,000, while those inheriting an estate worth between £300,000 and £500,000 would pay £1,000.

“The Government initially announced that the new fees are due to be introduced from May 2017 and will help to fund our courts. Despite a parliamentary committee stating it does not have the authority to go ahead with the new fees, the Ministry of Justice has said its plans “remain unchanged”.

“It is no surprise that the announcement is controversial and has faced strong opposition. Bereavement is a very difficult process and people are understandably upset at the prospect of facing an additional burden at a difficult time. However, not everyone will pay more – probate fees will be dropped altogether for estates worth under £50,000.

“If you and a spouse or partner jointly own a property then the value of the property would be excluded for probate purposes when one of you dies. In other words, the probate would be calculated on the value of any assets not held jointly. However, when the remaining spouse or partner passes away the beneficiary of the estate would then pay the probate fee for the whole value of the estate.

“Although low value estates will be exempt from probate fees under the new regime, the reality is that most people will be leaving an inheritance that will come with a higher probate fee. Many who bought relatively modest homes years ago now have high value estates because of the explosion in property value. If this additional burden is concerning you then it would be worth reviewing your estate planning to ensure you understand the implications of the new fee structure and what it means to your loved ones.

“Despite recent developments, the Government has said it will continue with its plans. For now, at least, people should assume the new probate fees will go ahead – though perhaps not as early as May – and I will be watching developments closely.”

For advice on these issues or any aspect of estate planning or making a Will, please contact Sarah Cornish on 0800 328 3282 or info@coodes.co.uk