South East: Lawyer warns bereaved on inheritance change

Bereaved South East families may struggle to claim inheritance because of changes which could require them to spend thousands of pounds up front to access a deceased loved one’s estate, a leading law firm has warned.

A government consultation has indicated that probate court fees, which are currently limited to a maximum of £215, are to be set on a new “sliding scale” which could see some people having to pay up to £20,000 in legal fees.  

The fees have to be paid to secure a “grant of representation”, also known as probate - a court order which gives a representative the legal authority to deal with a deceased person’s affairs.

Helen Bunker, divisional director of private law at Blake Morgan, which has offices in Oxford, Reading, and Chandler's Ford, says the rising fees, which must be paid up front, may make it harder for families to start the often distressing process of dealing with a loved one’s estate.

 “The process of dealing with a loved one’s estate can be difficult and traumatic at the best of times, and the introduction of these new fees will add to the stress involved,” said Bunker.

“Executors of even modestly-valued estates will now have to pay far higher court fees than previously, and when it comes to higher value estates, they face having to get their hands on up to £20,000 before applying for probate.

“This amount of money may not be readily available to them, meaning that they cannot dip into their own pockets and reimburse themselves from the estate later.

“Some people may consider a loan or asking the bank to release some of the estate’s cash before the grant is applied for – but these are not always viable options.

“The bottom line is that the new rules mean many families may find themselves in an unexpected and worrying situation at the worst possible time.”

A grant of probate is not necessary in dealing with all estates, but for most it is a vital element – for example, it is required to sell a deceased person’s home.

There is currently no fee for estates valued at below £50,000, and for anything above that there is a fixed fee of £125 for an application by a solicitor, and £215 for a personal application – regardless of the total value.

Under the proposed new system, the zero fee will still apply for estates under £50,000, but the cost rise sharply from there.

A £300 fee will apply for estates worth from £50,000 up to £300,000, rising to £1,000 for those between £300,000 and £500,000. From there the fees become significantly larger - £4,000 for estates from £500,000 up to £1m, £8,000 for estates from there up to £1.6m and £12,000 for those valued between £1.6m and £2m. At the top end of the scale, for estates of £2m and above, the maximum fee of £20,000 applies.

No exact date has been provided for the new structure to be in place, but the Ministry of Justice has confirmed that the Government is “bringing forward the necessary statutory instrument for the plans” in May 2017.

Bunker added: “These new charges will apply in tandem with existing inheritance tax, which also needs to be considered for estates valued at more than £325,000.

“In the future we may see funeral plan-style products emerge which will include an element for providing early release of probate fees. For the moment at least, I would expect that families will experience confusion and distress because of these proposals. Probate is a complicated process for which good, straightforward legal advice is essential.”