As the Government resurrects its plans to introduce new – and in some cases, higher fees - to administer probate, Michelle Monnes-Thomas, an Associate in our Wills, Probate and Lifetime Planning team, debates what impact this will have on the administration of estates:
When this move was first proposed in 2016, I said the planned increase by the Ministry of Justice was ‘effectively a tax by the back door’ and that is still the case, despite some amendments to the proposals.
Whilst consultation and pressure from the profession has resulted in changes to some of the charges it is still alarming.
Under the proposed new system, estates valued at more than £2m will now pay £6,000, while those between £1.6m and £2m will pay £5,000 and those between £1m and £1.6m £4,000.
This falls to £2,500 for estates worth between £500,000 and £1m, £750 for those worth £300,000 to £500,000 while those in the £50,000 to £300,000 price bracket will pay £250.
The only estates that won’t be affected are those valued at less than £50,000 as they won’t pay anything.
To put that into context the existing flat fee is either £155 for applications made through a solicitor or £215 for an application made in person.
With the rise in property values over the years, this stealth tax could affect a large portion of society. The Society of Trust and Estate Practitioners has estimated that 85 per cent of estates could be liable for higher fees, based on 2014-5 figures.
People’s hard earned money is in some cases already subject to inheritance tax and increased fees to administer probate will sour that even further. If people are facing increased charges, they could be less inclined to use lawyers to assist with probate and this can lead to mis-administered estates and errors, which could ultimately prove costly.
If for some families the only asset is a house, they may not have the ability to pay the court fees if there is no liquid cash available which would put a strain on families to find the fee.
The Probate Registry won’t actually be doing anything different for the increased fees as it is the same process regardless of the amount of the estate.
If anything, with an estate that is taxable, they do not check the tax return but send it straight to HMRC so they are, in fact, doing less work on the higher value estates that they plan to charge more on.
* Michelle advises on a range of private client related matters including wills, powers of attorney, trusts and estates and assists with all aspects of Court of Protection work.
She heads up our Community Care Team specialising in challenging care decisions and reviewing assessments for care and long term planning. In addition, Michelle is FBCMB’s Alzheimer’s Society ‘Dementia Friends’ Training Champion.
Anyone looking for advice and support on probate, administering an estate or drafting a will can contact Michelle on 01902 392484 or firstname.lastname@example.org.