UPDATE: The Ministry of Justice has announced that the proposed introduction has been delayed due to a lack of parliamentary time, due to the ongoing Brexit debate.
The government are proposing to reintroduce probate fee increases, following on from original plans being scrapped back in 2017. Despite increases being less significant than previously outlined, they are still a substantial surge from current fees, with many describing them as a ‘stealth tax’.
The current fee for obtaining a Grant of Probate after someone dies is £155 (£215 if obtained without a Solicitor) and this is regardless of the size or value of the estate. However, if new plans go ahead, there will be a tiered system where the cost will depend on the estate’s value.
The proposed fees are:
|Less than £50,000||No charge|
|£50,000 – £300,000||£250|
|£300,001 – £500,000||£750|
|£500,001 – £1m||£2,500|
|£1,000,001 – £1,6m||£4,000|
|£1,600,001 – £2m||£5,000|
Is it all bad news?
For estates worth less than £50,000 there is no charge, which means savings of up to £215 can be made.
Additionally, when plans were outlined, the government stated that the additional money raised from the increase in fees will be fed back into the court and tribunal service. This will ensure that they are receiving constant funding and being run effectively, protecting people’s access to justice.
What does this mean for you?
Forward planing is vital.
There are a number of ways in which you could begin to plan to protect your assets and family in the future, if these higher fees are introduced. Carefully considered estate planning with the help of a specialist solicitor may help you and your family lessen the impact of the high fees, should your estate be of considerable financial value.
How can you plan ahead?
1. Think about life insurance
You could take out a life insurance policy to cover the fees and put it in a trust to benefit a family member, or another beneficiary. That way, the pay-out can be accessed immediately on death, without a Grant of Probate as it will not be included in the estate. The money in the trust can then be used to pay the cost of probate.
2. Reduce your estate through lifetime planning
This can be done by setting up family trusts, for example. Couples could also direct assets away from from the survivor when the first dies to reduce the size of the survivor’s estate when they ultimately pass away.
3. Speak to our team of probate experts
If you would like any further information on probate fee increases or want to find out how you can begin to plan for your and your family’s future, please get in touch with our friendly Private Client team who are experienced in all matters relating to probate and estate planning.
To speak to our team, you can call us on 0115 9 100 200, or send us an email.
Posted on March 13, 2019