Probate fees to rise

For many people, their first introduction to the complex process of obtaining a Grant of Probate occurs at a very difficult time, when they’ve lost a loved one. Going through personal papers, identifying where monies are held and completing inheritance tax accounts are all laborious and sometimes daunting tasks. But up until now personal representatives and executors only had to find a relatively small fee of between £155-£215 to apply for the Grant of Probate.

However the government has announced that, as of April 2019, there will be a new system which will be based on a sliding scale whereby estates over £2 million will now incur a fee of over £6,000, almost 28 times the current amount.

Some are calling this a ‘stealth death tax’ aimed at penalising wealthier estates. But in reality, it is not just targeting the super wealthy as it will be any estate over £50,000 that will be subject to the increased fee structure.

The government has tried to promote the changes, in particular by highlighting the increased minimum threshold from £5,000 to £50,000. But when you examine what the average middle class estate is worth, it has been suggested that 80% of probate applications will now pay £750.

The worry with these new fees is that they will mistakenly discourage the use of Wills, increase the amount of lifetime gifts made and see assets pass through unconventional and unstructured legacies or joint ownership. All of which could leave a person vulnerable and financially unstable during, what should be, their golden years.

Additionally, it is usual for the assets of the estate to be frozen until the Grant of Probate is released, so how is it intended for executors to pay these fees? This means that executors may be caught in limbo and may have to fund these costs upfront themselves.

The big question will always be, how does this affect you?

We offer a full review of your personal and business wealth to ascertain the likely exposure and any reasonable changes you can make in advance and if you are an executor/personal representative of an estate, we offer legal advice from our in-house probate team on how to manage and pay the new probate fees.

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