News and insights from our Private Client team
Grant of probate fees are expected to rise
- AuthorTamsyn Lees
Following Elizabeth Young’s blog back in November 2018, an increase in fees for applying for a grant of probate is still expected - but not for a least another 21 days. So, in preparation, what will this mean for executors making an application and how much will it cost?
Currently, on estates valued over £5,000, a grant of probate comes for a flat fee of £215, or £155 if a solicitor is used. There is no upper limit to the value of the estate that this flat fee covers.
Under the new rules you won’t have to pay to obtain a grant if the estate is valued under £50,000. According to the Ministry of Justice, this means an extra 25,000 estates won’t need to pay anything for their grant which, on the face of it, is a good thing. However, there is a chance that these estates would not have needed a grant in the first place as they are unlikely to own real estate. Banks vary in the amount of cash they will release without a grant but some will release up to £50,000 with a will and a death certificate. This could mean that the change realistically has little effect on estates valued under £50,000.
Any estate valued over £50,000 will be charged on a sliding scale depending on the exact value of the estate. This is irrespective of the value of the estate for inheritance tax purposes which will likely cause issues where an estate is asset rich but cash poor.
Value of the Estate
Cost of Probate
£50,000 - £300,000
£300,001 - £500,000
£500,001 - £1,000,000
£1,000,001 – £1,600,000
£1,600,001 – 2,000,000
What if the estate cannot afford to pay?
The exact date in April that these changes will take effect has yet to be released and with that will come full guidance on how the fees will be paid. We do know, however, that the probate service is willing to write to banks to explain that the assets were needed to pay the probate fee. If neither a loan nor cash were available, a limited grant of probate can be applied for with the sole purposes of paying for the probate fee, at no extra cost to the personal representatives in the estate.
We are unsure what this will mean to estates and personal representatives who only have assets, such as land and property. Will the assets need to be sold to cover the cost of probate? Will a loan need to be taken instead? And who will ultimately be liable for this loan?
How will this money be used?
After writing to my MP, I have been informed that the money raised will be invested into the court and tribunal service. The chief executive of The Society of Trust and Estate Practitioners, George Hodgson, has said: "The new charges bear no relation to the cost of probate, and are simply another form of taxation, sneaked in through the back door.”
According to the Sunlife 2018 Cost of Dying research, the average cost of a funeral is £4,271 and the average cost of a wake stands at £2,061. This means that your family and personal representatives will have paid on average £6,278 before they have even begun administering your estate. It will be interesting to see how the “cost of dying” is affected by the new probate fees in the years to come.