The Government has published changes to probate fees which will affect people who have recently suffered a bereavement.
The changes, which come into effect on 1 May 2017, will affect all individuals inheriting an estate worth more than £50,000. Those inheriting estates worth more than £2million will be hit by a fee increase of more than 9,000 per cent – a rise from £215 to £20,000.
95 per cent of respondents have disagreed with the initial proposals however the Government is set to push ahead with its increase in probate fees.
Thee assets of a will are not released until probate has been granted, for many the changes will also spark a need for financial assistance – adding further administrative burdens to people who are going through a period of distress.
Full details of the changes are outlined below.
For estates up to £50,000 the fee decreases from £215 to £0.
For estates exceeding £50,000 up to £300,000 the fee rises from £215 to £300, an increase of 40%.
For estates exceeding £300,000 up to £500,000 the fee rises from £215 to £1,000 an increase of 365%.
For estates exceeding £500,000 up to £1m the fee rises from £215 to £4,000, an increase of 1,760%.
For estates exceeding £1m up to £1.6m the fee rises from £215 to £8,000, an increase of 3,621%.
For estates exceeding £1.6m up to £2m the fee rises from £215 to £12,000, an increase of 5,481%.
For estates exceeding £2m the fee rises from £215 to £20,000, an increase of 9,202%.
What is a grant of probate?
When a person dies, many will have named one or more people to act as executors of their will. This means those named as executors will need to obtain the legal right to deal with the property, money and possessions outlined in the will.
Obtaining this legal right is known as a ‘grant of probate’ and until this is acquired, the assets within a will cannot be distributed.
What is changing?
When applying for a grant of probate, there is currently a flat fee structure:
• £155 when the application is made through a solicitor.
• £215 when the application is made personally.
Following the results of the government consultation, this will now change to a banded structure and probate application fees will be determined on the value of the estate:
While the changes do represent a rise for all estates over £50,000, it is worth noting that those properties valued between £5,000 and £50,000 will now be exempt from paying any fee.
When will this change come into effect?
Changes are due to be implemented on 1 May 2017. However, it is not yet clear if this relates to applications submitted after this date, or for those individuals who have died after 30 April 2017.
What do I need to do now?
If you are an executor or an intending administrator of an estate worth more than £50,000, the grant of probate application should be made as soon as possible, before the 1 May 2017, to avoid incurring the higher court fee.
Don’t hesitate to get in touch with us if you would like further information about this or any other aspect of your estate planning.