Handling the affairs of a loved one that has passed away is about to change – and could potentially cost you more.
When someone dies and they have written a Will, a loved one or friend is generally named as the executor. They are the person responsible for dealing with the estate and they have to apply for a special legal authority called Probate.
At the moment, there are two Probate prices to worry about. If you wish to carry it out yourself, it costs £215 as a flat fee. If you get a solicitor to handle it for you, the Probate fee falls to £155.
However, following a consultation, the Government has decided to replace this system with a sliding scale of charges, determined by the value of the estate left by the deceased. This is ranging from nothing at all to a massive £20,000. The table below shows how the new fees will work.
|Value of estate (before inheritance tax)||New Probate fee|
|Up to £50,000||£0|
|£50,000 – £300,000||£300|
|£300,000 – £500,000||£1,000|
|£500,000 – £1m||£4,000|
|£1m – £1.6m||£8,000|
|£1.6m – £2m||£12,000|
For most people, the changes actually mean that the cost of Probate will fall. According to the Ministry of Justice, around 58% of estates are worth less than £50,000 or are otherwise exempt from requiring a Grant of Probate.
A further 23% of estates are worth between £50,000 and less than £300,000, meaning only a small price rise. However, large estates face a potentially significant extra cost.
Can you fight back against the ‘death tax’?
Critics have dubbed the new system a stealth ‘death tax’, as the Government has introduced the changes despite a lot of opposition.
It does make estate planning even more important – by using Trusts, you are able to keep some of your assets separate from your estate. Not only does this mean you won’t pay inheritance tax on them, but it can also help reduce your Probate fees.
It also makes a Will even more essential, as you have certainty over exactly how your assets will be divided and who will be responsible for handling your estate.
Speak to Pembroke Will Writers today about getting your Will in place by calling 01634 353 658 or emailing [email protected].