Probate fee hike an 'opportunistic attempt' to extract money from the deceased

Plans to charge beneficiaries of estates worth over £2m with a £20,000 probate fee have been described as an 'opportunistic attempt' to extract money from the deceased.

As the government looks for new ways to foot its justice bill and relieve an estimated 30,000 estates from paying any probate fees at all, the Ministry of Justice (MoJ) has proposed raising the threshold for charging from £5,000 to £50,000.

Currently, on estates worth £5,000 or more, probate applications are charged a fee of £155 if made by a solicitor and £215 if paid by an individual.

The proposed changes would see estates worth between £50,000 and £300,000 incurs a fee of £300. The government claims that 84 per cent of estates would pay no more than £300, while 94 per cent of estates would pay £1,000 or less.

The highest fee of £20,000 would be paid by beneficiaries of estates valued at more than £2m. Justice minister Shailesh Vara claimed the fee would never exceed 1 per cent of the value of the estate and in many cases would be considerably less.

The government hopes the changes will raise an additional £250m a year and reduce the burden on the taxpayer who paid £1.1bn towards the cost of running the courts and tribunals service in 2014/15.

The consultation also proposed a more streamlined procedure for probate applications, moving from a paper-based process to an online system.

In a letter to the chair of the justice select committee, Vara said the changes would make 'a significant contribution to reducing the deficit', enable investment in the courts, and increase access to justice.

In last year's spending review the MoJ was allocated £700m for investment in the court's service with the aim of improving modern day processes.

Amassing an annual bill of £1.8bn the government is hoping the consultation will provide some much needed relief.

Vara recognised that court fees are 'never popular' but said 'they are necessary if we are, as a nation, to live within our means'.

However, Richard McDermott, a probate solicitor at Farer & Co, commented: 'The proposed fee increase is huge and strikes us as a rather opportunistic attempt to extract money from deceased people's estates - not least because the level of fees will bear no relation to the service received or the amount of work involved in the probate process.'

Joyce Bradbeer, a partner of probate at Moore Blatch, echoed McDermott's views: 'Although moving the proposed fee structure from a flat to a banded fee is, in certain cases, deemed fairer and more progressive than the current structure, it also means that those with larger estates will be paying significantly more, even though the work that the Probate Registry has to do is virtually the same whatever the value of the estate.

'But, more to the point, how are the executors going to raise the money to pay for this? Access to cash is extremely limited prior to the issue of the grant of representation.'