Financial & Legal News

Probate Changes Could Affect Families from April this Year

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April sees a change in probate rules with fees of up to £6,000 now payable on estates for the first time.

The fee would only be applied to estates worth more than £50,000, unlike the current system which is charged on all estates above £5,000, however it does have a sliding scale of fees which are consistently higher than previously.

At the moment, people using solicitors pay a one-off fee of £155 to apply to the court for a grant of representation - a key step in the probate process - or £215 if applying themselves for the grant of probate which is a legal document allowing the appointed person to administer funds.  The fee is less when using a solicitor because it is considered that their applications are easier to process.

Those administering estates worth more than £2m will from April pay the maximum charge of £6,000 — a 2,690% increase on the current charge.

Estates worth between £1.6m and £2m will pay a £5,000 fee, while estates of between £1m and £1.6m will attract a fee of £4,000.

There has been a rush to settle estate before the April deadline as the new probate fees will be based on the date when individuals apply for probate, rather than on when death occurred and so there could be a rush of executors trying to settle the deceased’s affairs.

Property can account for the majority of the financial value of assets in most estates, but this is already liable for inheritance tax in many cases and so the fee rises are a double whammy for clients, said Probate Solicitor Hannah Pearson.

“That is a key issue since it means estates are effectively being double-taxed — once for inheritance tax of 40 per cent above the nil-rate band, and then again through tiered probate fees, said Hannah.

“I would advise executors to get in touch for all the relevant information so we can apply for Probate for them ahead of the changes, but firstly we need to make sure everything is in order, paperwork completed, tax forms done and searches and original documentation filed,” she added.

There has been added criticism of the ruling:  “The cost to the courts for granting probate does not change whether the estate is worth £50,000 or £2m,” said Christina Blacklaws, president of the Law Society of England and Wales. “It is unfair to expect the bereaved to fund or subsidise other parts of the courts and tribunal service, particularly in circumstances where they have no other options but to use the probate service.”

"If someone is recently bereaved and hasn't yet thought about probate we would encourage them to apply as soon as possible," added Hannah.

Unfortunately it is not yet clear the exact date when the new fees will start, as it still has to pass through the final stage in the House of Commons, although the Government has indicated that it will be in April.

 

Call Hannah Pearson, solicitor, on 0161 785 3500 for advice on Probate, the Administration of Estates, Wills and Inheritance Tax.

 

 

 

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

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