The Government has recently announced its plans to significantly increase the cost of probate fees from May 2017.

The fees payable to the Probate Court in England and Wales will rise by over 12,000% for the largest estates. These are the fees which have to be paid when applying for Grant of Probate.

At the moment, a flat fee of £155 is payable if the application is made by a solicitor or £215  if by an individual.

From May, the fee will be dependent upon the value of the estate for all applications (i.e. whether made by a solicitor or individual).

There is currently no fee for probate applications if the value of the estate is under £5,000. This exemption will be increased for net estates up to £50,000.

However, if the value of the estate exceeds £50,000, the Court fee payable will rise dramatically. This is even if there is no Inheritance Tax to pay because of exemptions or reliefs, such as spouse exemption, Agricultural Property Relief and Business Property Relief.

The Probate Court fees will be:

• £300 for estates with a net value of £50,000 – £300,000;
• £1,000 for estates with a net value of £300,000-£500,000;
• £4,000 for estates with a net value of £500,000-£1million;
• £8,000 for estates with a net value of £1 million-£1.6million;
• £12,000 for estates with a net value of £1.6million-£2million; and
• £20,000 for estates with a net value of £2million plus.

Estate administration is likely to become more difficult and certainly more expensive on the whole. Some of the problems envisaged include:

• The fees are payable up front. The banks have indicated they may release money to pay the fees but if they will not, or there are no liquid assets in the estate, who will pay? The Government’s proposal encourages executors to lend money to the estate. If you were appointed as an executor would (could) you lend the estate £20,000? You may if you are also a beneficiary, but what if say one elderly spouse dies owning most of the assets? The survivor may not have their own cash to pay the fee up front.