Most families who have recently lost a loved one should not delay in applying for probate if they want to avoid a substantial hike in probate fees. From April 2019, many estates will pay significantly more when applying for a grant, with increases of up £5,785 on the cards. However, whilst estates worth £50,000 or more will be subject to the price hikes, smaller estates will benefit from the change in rules.
Under the current system, applying for probate costs a flat fee of £215 which is reduced to £155 where a solicitor is used. While estates worth less than £5,000 pay nothing, all estates worth £5,000 or more pay the same flat fee regardless of value.
However, from April 2019, the fees charged for probate applications will be assessed on a sliding scale, dependent on the value of the estate.
A greater number of small estates will fall into the no-fee band with the threshold for paying a fee shifting from £5,000 to £50,000. According to Justice Minister Lucy Frazer, this should mean around 25,000 estates each year will now not have to pay a fee. Those responsible for administering estates worth between £5,000 and £49,999 will therefore likely be better off waiting for the changes before applying.
All other estates will see a rise in fees. The changes are as follows:
|Estate value||Old fee*||New fee (Apr 2019)||Difference|
|£0 – £4,999||£0||£0||£0|
|£5,000 up to £50,000||£215||£0||£155 / £215 saving|
|£50,000 up to £300,000||£215||£250||£35|
|£300,000 up to £500,000||£215||£750||£535|
|£500,000 up to £1m||£215||£2,500||£2,285|
|£1m up to £1.6m||£215||£4,000||£3,785|
|£1.6m up to £2m||£215||£5,000||£4,785|
* Currently a lower fee applies if a solicitor is used – this will change from April 2019.
The changes affect estates in England and Wales – estates in Scotland and in Northern Ireland are subject to different probate fees.
An overview of probate
If someone dies leaving assets – such as a house, money and personal possessions – the person that they have named in their Will as their Executor will need to sort out how these are distributed. If the person didn’t make a Will, Personal Representatives (PRs) will be appointed.
For many estates, it will be necessary to apply for a grant of probate which is a document that confirms the Executor has the right to distribute the assets. Where there is no Will, the PRs will apply for a grant of ‘letters of administration’. Whether the person administering the estate is an Executor appointed by the Will or a Personal Representative, their job is the same: to pay off the person’s debts and distribute their assets, either according to their Will or according to the rules of intestacy.
If you are administering the estate of a loved one either as an executor or PR and the estate is worth less than £5,000, there’s unlikely to be a benefit in waiting for the new rules to come into force. However, you should check with a solicitor to see if a grant is actually necessary.
If the estate is worth between £5,000 and £49,999, you’ll probably save money by waiting for the new rules, as you won’t pay a fee.
However, if the estate is worth £50,000 or more, you’ll likely save by applying for the grant before April 2019.
Keep in mind that if you wait to make the application, it will be longer before you can distribute the Deceased’s assets. Some people may prefer to pay the higher fee and start the administration process sooner, particularly if the increase in the fee to be paid is not significant.
In all cases, it’s worth having a chat with a solicitor before deciding what to do. Speak to our Later Life Planning team on Southport 01704 532890 or Liverpool 0151 928 6544, or complete our web form and we’ll be in touch.