Probate, how does the new law affect what you will pay?
Probate is a fee that the executor of a will must pay to enable them to manage the estate. Recent changes mean that some will pay more and others less.
The executor of a will
An executor of a will is the person named to manage the person's estate after their death. The will settle any outstanding debts, sell off property, make any specified gifts, and divide up the inheritance. To be allowed to do this the person must apply for probate. If there is more than one executor only one needs to apply.
What is an estate?
An estate includes everything which the person owned before their death. It includes their properties, business assets, shares, money in the bank, and personal items such as vehicles and jewellery.
What is probate?
Probate is also called a "grant of representation" a " letter of administration" or the "death tax".
To apply for probate you must contact your local Probate Registry. you can find your nearest registry here. If you need help filling out the required forms, understanding the process, or determining what you need to pay, you can get advice here.
The executor will receive an interview at the Probate Registry. Here, he must prevent all the paperwork relevant to the estate. He must also swear an oath. It usually takes a further 10 days for the approval of the probate.
How much does it cost?
From April next year, a new sliding scale will be used. Estates with a value of more than £2-million will have the highest probate fee of £6000. Estates with a value from £50,000 to £350,000 will pay a fee of £250. Currently, a fee is paid on all estates with a value greater than £5,000. However, under the new system estates with a value of less than £50,000 will not have to pay anything.
Who has to pay?
The executor of the will must pay to due fees. He can not access any of the assets of the deceased until payment is made. Later they can claim back the money from the estate. The estate remains frozen until the tax is paid. If the executor is unable to cover the initial fee they may be able to obtain financial help here.
Where does the money go?
The money funds the courts and tribunal services in the UK. The Government claims that the new fees are essential to keep the system functioning. Additionally, it claims the new banded fee model is fairer and more progressive.