A WARNING has been given about changes to probate fees which will leave many people out of pocket.
Obtaining a Grant of Probate, or letters of administration if there is no will, is the process by which executors secure the authority to deal with the property, investments and money of someone who has died.
From May, the way probate fees are charged will change to a banded system based on the value of the deceased’s estate – moving away from the current flat fee of £215 for private applications, or £155 when a solicitor handles the process.
The changes mean a charge of up to £20,000 will be made before Probate is granted and before assets can be released.
The £20,000 will be charged for estates over £2m and £12,000 for estates of between £1.6 and £2m.
Anne Elliott, chief executive of Darlington-based Latimer Hinks Solicitors, believes the changes are unfair.
She said: “These changes are all well and good for people with large bank balances, but for people who are ‘asset-rich but cash-poor’ as is often the case, particularly in the North East, these changes are an unfair financial burden.
“This could well hit the landowning and farming community particularly hard. A farm may easily be worth in excess of £2million on paper, but finding £20,000 in cash to pay Probate fees could be problematic.
“For Inheritance Tax purposes the farm could well be exempt from tax but now there will be what amounts to another tax. Some clients may need to take, extend or increase loans to cover the fees.”