Increase in Probate fees to hit estates
It has been confirmed that the probate fees structure is set to change in May 2017 to a tiered system whereby the fees will reflect the value of the Estate.
Currently there is a standard fee of £155 where an application is made through a solicitor, irrespective of the size of the estate.
Estates worth less than £50,000 will see no fee charged by the Probate Registry for obtaining the grant of probate. However, estates above £2m will see the fee charged by the Probate Registry rise to a staggering £20,000.
The changes were widely opposed by the Ministry of Justice’s consultation respondents with 695 out of 829 disagreeing with the changes, saying that the fees were too high.
Provision has yet to be announced for executors who do not have cash available to pay the fee. Personal representatives will be able to apply to the Probate Registry to access a particular asset for the sole purpose of providing funds, though the practical details are not yet worked out.
These fees will affect cash poor property owners, some of whom may be forced to go to the expense of taking out a bank loan to pay the probate fees. Assets will no doubt need to be sold to repay the loans in many cases.
Some families may even consider giving away assets during their lifetime, either outright or into trust, in order to reduce their estate and consequently, reduce the Probate fees.
This vast rise in fees is likely to cause a backlog at the Probate Registries in April as we will see a rush for grants to be issued before the new fees come into effect.
If you are unsure of the implications of these fee increases on your estate and would like more information, then you should seek exert advice.