Why HNWs Should be Worried About the Probate Fee Hike

Britain has announced a substantial increase in the probate fee, which grants access to the control of a person’s estate. The increase is slated to take effect in April of 2019, and is disguised as a tax for the wealthier estates of the country.

The claim is that it is intended to pay for court reform and will be applied on a sliding scale of estate value. Estates worth less than £50,000 will be exempt from the probate fee. The new tariff represents a dramatic increase on the current fees, which peak at £215 for a personal application, to secure the necessary documentation. An estate worth an estimated £2 million will be expected to pay £6,000 in the future, though it is not quite as large of a jump as the proposed £20,000 fee for an estate that size that was put forth just a few years ago.

This change will leave many estates struggling to pay the fee up-front when assets are tied up in frozen bank accounts or property, which in turn will make it mandatory for banks to open up accounts to pay these fees. It may also make people distance themselves from using wills and instead gift assets during their lifetime. Others may attempt to mitigate the probate fee by using the survivorship rules of joint property and joint bank accounts. But automatic inheritances may create inequalities between siblings and other family members.

See James Ward, Why HNWs Should be Worried About the Probate Fee Hike, Spear’s, November 13, 2018.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.