This week has seen proposals for the controversial England and Wales Probate fee increase dropped, on grounds of unfairness and disproportionality. The increase, due to take effect from April 2019, had already been delayed due to a lack of parliamentary time to debate the matter, as a result of Brexit.
What is Probate?
A Grant is an official document sealed by the Probate Registry which confirms that the named individuals are legally entitled to deal with the estate. This includes:
collecting in assets
paying any liabilities and debts of the estate and
distributing the residue to the entitled beneficiaries
In the majority of cases, unless the value of the estate is very small or assets are held in joint names, a Grant will be required.
Where the deceased leaves a Will, the named executors can deal with the estate with authority of a Grant of Probate. The Grant confirms the validity of the Will and the appointment of executors.
Where someone dies intestate (i.e. without a valid Will), the intestacy rules provide guidance as to who is entitled to act as an administrator of the estate. A Grant of Letters of Administration confers the authority on administrators to deal with the estate.
Background to the Non-Contentious Probate Fees Order 2018
The proposal for a Probate fee increase was first laid before Parliament in February 2017, with many organisations campaigning for the Order to be revoked on the basis of unfairness to bereaved families. The Order gained momentum towards Royal Assent but failed to be enacted due to the general election in 2017.
It was revisited in November 2018, albeit with lower fee increases, and continued to be met with opposition from the profession and public alike, as well as challenges of potential illegality by some MPs.
The proposed changes would have replaced the current flat-fee of £155 (or £215 for a personal application) for estates over £5,000 with a sliding scale of charges, the proposed fee dependent on the value of estate before Inheritance Tax. This would have seen fees abolished for estates worth less than £50,000 while estates worth over £2m would have attracted a Probate fee of £6,000.
Value of estate before Inheritance Tax
Up to £50,000
£50,000 - £300,000
£300,000 - £500,000
£500,000 - £1m
£1m - £1.6m
£1.6m - £2m
The Ministry of Justice attempted to justify the fee increase as part of a comprehensive reform of the Court system and ultimately to improve access to justice. However, in reality, proposed charges were far higher than the cost for delivering the service.
As a result, there has been a rush by personal representatives to obtain Probate before the rise in court fees. This has led to a backlog of applications with both HMRC and Probate registries and has seen Grants taking several months to be issued rather than a matter of weeks.
The news that the related statutory instrument has been withdrawn has come as a welcome development for the profession and members of the public alike. STEP Technical Counsel Emily Deane TEP comments: “This at last brings an end to the uncertainty and worry that these proposals have caused to grieving families.”
The Ministry of Justice has announced that Probate fee changes shall now be reviewed as part of an annual assessment of fees charged for proceedings in civil and family Courts.
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.