Probate Fee Increase and Estate Planning
You may have read the government has resurrected its 2017 plan for an enormous increase in probate application fees for higher-value estates in England and Wales. At present, the proposals are due to be brought in from April 2019.
The fees in the new version are slightly less punitive than the previous proposals. However, it will still replace the current flat fee, with charges based on the value of the estate, to a maximum of £6,000 for estates worth more than £2 million. Fees will be £2,500 for estates between £500,000 and £1 million; £4,000 for those between £1 million and £1.6 million; and £5,000 for estates between £1.6 million and £2 million.
It is estimated the vast majority of estates will fall into the bracket of between £300,000 and £500,000 and those estates will have to pay a fee of £750, a 249% increase on the current flat fee.
A number of professional bodies have again raised concerns about the proposed increases. These relate to the fees being disproportionate to the service being provided, as well as the practical implications for executors. For example, how will the executors fund the payment of the fee, particularly in estates where there are limited cash funds available? The use of bridging finance was previously mooted, with estate assets being used as security. However, the practicalities were far from being ironed out and there was real fear that arranging the financing would cause significant delays as well as additional costs which would have to be borne by the estate – and ultimately the beneficiaries.
The government has this time said executors will be given several options to fund the fee from the estate and a guidance document, Guidance on Ways to Pay for Probate Fees, will be published before the new rules come into force.
The initial proposals provided much food for thought and prompted discussions as to how assets could be arranged in a way which would minimise the impact of the changes.
The re-emergence of these fee increases will be a real concern to many. Whatever the size of your estate, it is always wise to discuss matters with a qualified professional.
It is never too early to begin planning for your estate to be as tax efficient as possible on your death and the probate court fee increases provide an additional reason to review your plans.
As part of its comprehensive service, Glanvilles Damant has a specialist Wills, Trusts and Estate Planning team. This team has a wealth of experience in helping individuals protect their loved ones and put their affairs in order, during their lifetime and in the event of their death.
Glanvilles Damant’s Wills, Trusts and Estate Planning experts provide a professional, yet caring, and sympathetic service to ensure clients’ wishes for the future are met precisely. As part of this service, we are always pleased to liaise with any of our clients’ accountants, stockbrokers and financial advisers, whenever it’s appropriate.
Like all of Glanvilles Damant’s specialists, our Wills, Trust and Estate Planning Solicitors will give you advice and explanations in clear and understandable terms. For those who find it less easy to get around, home, hospital or nursing home visits are all part of our service.
April Newton is a Solicitor at Glanvilles Damant specialising in Probate, Trusts, Wills, Powers of Attorney and elderly client matters. Please contact her on [email protected]
co.uk or 01983 527878 for a free initial consultation.
Words by April Newton