The Cost of Dying is to Increase by up to 12,903%!
The Government advise that probate court fees will change in May 2017 to a banded system. The current fee is fixed at £155 for solicitor applications and £215 for personal applications irrespective of the value of the estate.
The new fee structure is as follows:
|Value of estate fee||Proposed|
|Up to £50,000||£ 0|
|£50,000 to £300,000||£300|
|£300,000 to £500,000||£1,000|
|£1m to £1.6m||£8,000|
A grant of probate or administration is issued by the High Court. It is generally required by the executors/administrators of the estate to enable them to cash in the assets of the deceased and/or to sell property.
The first issue that executors will face is how to pay the new fee. The assets of the deceased are generally frozen until the grant has issued. It is expected, however, that provided there is sufficient cash within the bank or building society account of the deceased, that the executors will be able to access funds from those accounts to meet the court fee. If not, the executors may have to organise a loan.
It should be possible for a husband and wife to potentially reduce the court fee on the first death by rearranging how they hold their current assets. It was quite normal, for example, prior to November 2007 for couples to change the ownership of their property to a Tenancy in Common usually in connection with tax planning. They should now consider converting the property back to a joint tenancy. If they did this, the property on the first death would pass automatically to the survivor and the value of the half share should not therefore be counted towards the court fee.
It may also be sensible to transfer sole name accounts into joint names. Once again, these will pass automatically to the surviving owner. The making of lifetime gifts and/or setting up lifetime Trusts will also reduce the value of your estate and may save on court fees.
We would recommend taking legal advice before any changes are implemented to ensure that all implications of such action is fully understood.
Author: Adrian Bell, LLP Partner and Hassocks Branch Manager