The cost of sorting out someone's property, money and possessions after they've died will increase for many next month, with some to face fees of £20,000 - despite a late challenge by a parliamentary panel to block the planned rise in probate charges.
Probate charges are paid to the Government after an individual has passed away and the executor of their estate gathers their assets to distribute to people named as beneficiaries in their will.
How complicated it is depends on the estate, but the process essentially involves:
- Gathering any assets
- Paying off any bills
- Distributing what's left according to the will
Currently probate fees for estates worth at least £50,000 are charged at a flat rate of £155 for those applying through a solicitor, and £215 for those without legal representation. There's no probate fee for estates worth less than £50,000 - that won't change under the incoming rules but costs for higher value estates are set to soar.
Read of our Cheap and Free Wills guide for help with long-term planning.
How probate costs set to increase for many
From next month probate fees will increase by almost 13,000% in some cases, with some having to fork out a whopping £20,000 just to be able to release the estate to beneficiaries.
Under the new system a sliding scale will be introduced with probate fees decided on the basis of the value of the estate:
New sliding scale of probate fees
|Value of the estate||New fee|
|Less than £50,000||£0|
|£50,000 to £300,000||£300|
|£300,000 to £500,000||£1,000|
|£500,000 to £1m||£4,000|
|£1m to £1.6m||£8,000|
|£1.6m to £2m||£12,000|
|£2m and above||£20,000|
It's worth mentioning that many estates don’t need to get probate. If there is only jointly owned property and money that passes to a spouse or civil partner, then probate will not normally be needed.
New parliamentary challenge against probate changes
Parliament's Joint Committee on Statutory Instruments has disputed the legality of the probate fee changes - it has compared the plan to bringing in new taxes without parliamentary approval.
In a highly-critical report, the committee said: "The charges ... appear to the committee to have the hallmarks of taxes rather than fees, particularly in view of the amounts that would payable for larger estates and the scale of the proposed increases - and because the charges are disproportionate to the service provided by the Probate Registry.
"It is an important constitutional principle that there is no taxation without the consent of Parliament, which must be embodied in statute and expressed in clear terms.
But the Ministry of Justice (MoJ) is adamant the new fee structure will be in place from May for England and Wales, as planned. It's been calculated that the change will raise £300m for the courts and tribunal service.
A spokesman said: "Our plans to introduce new probate fees remain unchanged. We will introduce a fairer system, meaning over half of estates pay nothing and over 90% pay less than £1,000."