The Ministry of Justice has revealed plans to reduce costs by up to £250 million a year by introducing an overhaul on probate fees. Fees are only going to be chargeable on estates worth over £50000 which sees 57% of UK estates escaping from fees altogether.
A grant of probate is applied for when a person has died in order to give a person the authority to deal with their estate. Under the current system, there is a flat rate fee of £215 for a beneficiary to pay on all estates worth over £5000.
The new regime sees a jump for estates worth £50000 – £300000 to a fee of £300 with staggered costs up to estates worth over £2 million which will need to pay a hefty £20,000.
For beneficiaries who are left with an estate over £500000 they will be faced with fees of over 18 times the current cost. Taking into account the soaring price in property, it is likely that many families are going to be faced with these escalating costs when a relative dies.
Justice Minister Shailesh Varahe claims that these plans will give a ‘critical contribution to cutting the deficit and reducing the burden on the taxpayer of running the court and tribunals’. The government are now set to consult on the proposals until April whereby a decision will be made.
The recent increase in court fees and now the rise in probate fees is going to have a drastic impact on contested probate claims. It will make it particularly hard for some people to have to pay for the probate fee and any consequential litigation from claims against the estate of the deceased. It will also impact charities who are executors faced with claims under the Inheritance (Provision for Family and Dependants) Act 1975. We await the decision from the edge of our seats.