Soaring fees set deadline for executors and estate planning

Controversial court fees, branded a ‘stealth tax’ on bereaved families, are expected to prompt a surge in probate applications before costs soar by thousands of pounds.

Fees payable to courts when applying to act on someone’s behalf after they have died are set to rise. After identifying and itemising assets, paying any calculated inheritance tax, and settling funeral costs, executors can only begin the administration of the estate once the probate fees have been paid.

The current flat fee of £215 for a personal application for probate, (£155 when handled through a solicitor,) is to be replaced by a tiered set of fees. While the fees have been reined in from the original proposal, houses or estates worth over £500,000 could be paying between £2,500 to £6,000 in court fees.

As no funds can be distributed until the Grant has been issued, there are concerns that families will struggle to pay the probate fees before they can access the money locked in the deceased’s estate. Those inheriting high value property, may find themselves facing high court fees without any cash to pay them.

“For executors who are already in the process of administering estates, it’s worth reviewing the position to see if they can get the estate ready to apply for probate sooner rather than later,’ advises Andrea Cox, Director at Verisona Law. ‘It’s currently expected to be April when the switch is made to the tiered fee structure, but it could be earlier and there will be just 21 days from the announcement until the new fees kick in.”

“Those looking to the future should get some advice. There are only limited ways in which to tackle the amount of fee that will be due, but there are other ways in which you can ease the burden for your executors.”

One example of forward planning that may help property owners is to take out a life insurance policy and put it in trust. If made over in this way, the pay-out will not be included within the estate and can be accessed on death without the Grant of Probate.

“It’s good practice to regularly review your estate and tax planning, as things are always changing, so this is a good time to do that temperature test.”


Wills

  • Will drafting
  • Review of existing Wills
  • Advice re provision for children, second families, spouses and civil partners, unmarried partners and other family members
  • Advice re charitable gifts
  • Advice re foreign and business assets
  • Advice re Will trusts
  • Codicils
  • Inheritance Tax advice

Trusts

  • Advice re Trust creation and ongoing management
  • Preparation of trust deeds and other trust documentation
  • Declarations of Trust
  • Termination of trusts

Probate and Administration of Estates

  • Advice re the terms of the Will or intestacy rules where there is no Will
  • Obtaining values for the various assets and liabilities in the estate, notifying the various institutions and obtaining all necessary estate information
  • Obtaining a grant of probate or letters of administration as appropriate
  • Dealing with and advice re Inheritance Tax, Capital Gains Tax and Income Tax, liaising with HMRC
  • Notifying and liaising with the beneficiaries of the estate
  • Preparing a deed of variation or a deed of disclaimer in relation to the estate
  • Selling or transferring the various assets due to the beneficiaries
  • Dealing with foreign assets and Wills
  • Advice re estate disputes and claims against an estate

“If it had not been for the EPA I would have had real problems even discussing my mother’s affairs with banks, investment companies, government departments and care providers, much less paying her bills from her account.

“Being able to supply copies of the EPA to the various parties meant they would speak to me and act on my instructions. Without it I would have had to pursue a long, complicated and expensive legal process – at a very difficult time personally.

“I would absolutely recommend planning ahead and making an LPA. It could make a huge difference to your loved ones.”

Paul

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