20 Apr

Increase in Probate Fees May 2017

Increase in Probate Fees May 2017

Increase in Probate Court Fees - May 2017


Probate Court Fees are due to change In May 2017. The probate court fee is a fee that has to be paid to get a Grant of Probate. A Grant of Probate is a court order which entitles Executors appointed in a Will (or administrators where there is no Will) to deal with the estate of a deceased person. This is needed to close bank accounts, sell or transfer property or cash in or transfer shares and other investments. 

Until now the court fee was a flat fee of £155 for any estate exceeding the value of £5,000. This is changing from May to the fees as set out in the table below. As can be seen these are astronomic increases - all lobbying to stop the changes have fallen on deaf ears. The fees are not deductible for Inheritance Tax purposes - so it is an additional charge.

Probate Court Fees as of May 2017

Value of Estate £0 - £50,000 Fee required £Nil
Value of Estate £50,001 - £300,000 Fee required £300
Value of Estate £300,001 - £500,000 Fee required £1,000
Value of Estate £500,001 - £1,000,000 Fee required £4,000
Value of Estate £1,000,001 - £1,600,000 Fee required £8,000
Value of Estate £1,600,001 - £2,000,000 Fee required £12,000
Value of Estate £2,000,001 or more Fee required £20,000

If you are currently dealing with the estate of a family member or friends and you have not yet applied for Probate you need to do so as soon as possible if you want to avoid being caught by this increase in fees. The Probate Registry will get very busy so time is of the essence.  Of course if the estate has a value of less than £50,000 you may want to wait as you can avoid having to pay the £155 fee. Sadly this will only apply in very few cases. If you need help in getting Probate quickly we are happy to assist in reccomending a Solicitor - Solicitor applications are usually processed more quickly.

Also how you own assets is now potentially more important. Take the following example:

Mr and Mrs X own a property  worth £500,000 as tenants in common. They keep the rest of their finances pretty much separate and each have accounts and investments worth £100,000. In addition they have a life policy that will pay out £200,000 on first death which is not written in trust. Mr X dies. His estate for which probate is needed and on which the fees are based, has a value of £550,000 - half the house, the life policy and his cash / investments. The court fee due is £4,000.

Mr and Mrs Y have the same assets. They however own the property as joint tenants and have written the life policy in trust. When Mr Y dies his estate for which probate is needed is only £100,000 as the property passes to Mrs Y by survivorship and the life policy passes under the trust to Mrs Y. The court fee for Mr Y is only £300.

In other words, a simple change in ownership arrangements has saved Mr Y's estate £3,700.

The other issue that will arise is how your executors or administrators pay for the fee. Until they have probate they will unlikely have access to any accounts or investments in your name yet they may have to find significant sums to pay to get probate - a case of chicken or egg!. It may be worth considering having some life insurance written in trust to cover the potential fees due so that this is immediately available to your estate. This will avoid your executors having to try to find monies to pay the fees, which will reduce the costs and expedite the administration of your estate.

 

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