The cost of proving a will following the death of a relative looks set to increase following a Government announcement.
Probate fees, which must be paid before next of kin can access assets, will be removed for estates under £50,000, but everyone else will have to pay more.
Nalders solicitor Mark Buswell said: “It will penalise those with larger estates, and as such whilst it remains a court fee, it is ultimately a stealth tax. Although some families will be better off, the vast majority will not. Unfortunately, with the current political landscape dominated and distracted by the Brexit process, this change is likely to implemented with little opposition but the impact of the changes could be quite significant”
The House of Lords Legislation Scrutiny Committee’s review of the policy highlights the Government’s own guidance, which states that different groups of customers should not be charged different amounts for a service costing the same.
The review added that it represents a move away from the principle that fees for a public service should recover the cost of providing it – and no more.
Currently, it costs as little as £155 to apply for probate if a solicitor is used, but once the new rules are ratified, a sliding scale of fees will be introduced, most likely in the spring of 2019.
Estates worth £2m or more will incur £6,000 in fees, dropping down to a £250 fee for estates worth £50,000 to £300,000.
Mark added: “So many people have estates over £50,000, so those benefiting from the free fee will be few and far between. The vast majority of people leave homes to their children, but to some it will feel like they’re having money taken from them before they even have it.
“They could have to pay the fee from their savings and up to 90 per cent of deaths will trigger payment of this nature. It is a tax-based tax, rather than a fee-based tax. The Government has introduced it because it feels like a light change, without being too upsetting.”
In some circumstances, a widow or widower may defer probate, but when they die this can leave the beneficiaries of their own estate facing the administrative challenge and cost of securing two grants of probate.
The Government is proposing to generate £145m a year from the probate fee hike to pay for other functions of the court service.
To discuss this, or any other lifetime planning issues, please contact a member of our Lifetime Planning Team.