Imminent Changes To Probate Fees 2019
The Government has announced that bereaved families are soon to be faced with soaring probate costs coming into effect in April 2019. This means that some people will pay almost £6,000 more. Although for estates worth less than £50,000, no fees will be paid.
Probate is the term used to describe the legal processes involved in dealing with the legal and financial issues of a person who has died. If the deceased left a will and appointed an executor, they will need to apply for a ‘grant of probate‘. However, if no Will was left, the next of kin must apply for what is known as a ‘grant of letters of administration‘.
The executor or next of kin will then need to obtain a ‘grant of representation’, which gives proof authority to administer the estate.
The executor or next of kin’s job involves:
- Gathering and valuing any assets, eg, property, valuables, money etc
- Paying any outstanding debts, taxes or bills
- Distributing what’s left of the estate according to the will
The process of ‘probate’ incurs probate fees. Currently, probate costs a flat fee £215, or £155 if the application is made through a solicitor. This is the fee incurred on all estates worth over £5,000.
In Scotland, fees for what is called ‘confirmation’ are no more than £500. In Northern Ireland the fee for a grant of probate is £250.
From April 2019 in England and Wales, probate fees will be paid on a sliding scale basis depending the value of the estate, rather than a flat fee basis which is in place at the moment.
Under the proposed new system, the price structure will be as follows:
- Estates valued at less than £50,000 will be exempt from probate fees (compared with the present lower threshold of £5,000)
- Estates valued between £50,000 and £300,000 will pay £250
- Estates valued between £300,000 to £500,000 will pay £750
- Estates valued between £500,000 and £1m will pay £2,500
- Estates valued between £1 million to £1.6 million will pay £4,000
- Estates worth between £1.6m and £2m will pay £5,000
- Estates worth more than £2m will pay £6,000
Not only will families faced with soaring costs, but the executors will have to pay the fee up front before it can be reclaimed from the estate after probate has been granted. This will mean that some families will be forced to borrow in order to pay the bills.
Why The Change?
The Government has made it clear that the rise in fees are intended to raise money to offset the £1.9 billion a year spent on the courts service. Fees in other areas make up around £700 million of which £1.2 billion is paid by the taxpayer.
The old fees already cover the administrative costs but the new, higher fees will provide an extra £320 million each year. The Government says that is “a substantial contribution to the running costs” of the courts.
Last year the Government consulted 829 people on the changes, of whom only 63 who responded fully supported the plans.