When an individual dies, the Executor named in their Will must obtain a “Grant of Probate”. It is this document that allows the Executors to follow the individual’s wishes in their Will and distribute the Estate accordingly.
To apply for Probate there is, of course, a fee to pay. The Government has decided to make changes to these fees which mean that, in future, Probate Fees will be based on the size of your Estate. The new fees are:
- Estates worth less than £50,000 will pay nothing, meaning Estates worth between £5,000 and £50,000 will save £215 compared with the old system
- Estates worth from £50,000 up to £300,000 will pay £250, a rise of£35
- Estates worth from £300,000 up to £500,000 will pay £750, a rise of£535
- Estates worth from £500,000 up to £1 million will pay £2,500, a rise of £2,285
- Estates worth from £1 million up to £1.6 million will pay £4,000, a rise of £3,785
- Estates worth from £1.6 million up to £2 million will pay £5,000, a rise of £4,785
- Estates worth more than £2 million will pay £6,000, a rise of £5,785
This means that an individual with an Estate of £50,000 or less could end up paying nothing, but an individual with an Estate worth £2 million or more could end up paying £6,000 – or, even worse, £12,000 as married couples would need to pay the fees on first and second death!
In addition to this, your Executors may not have sufficient funds available to pay the Probate Fees and may end up having to borrow from elsewhere to start the Probate process. Not a situation we would like anyone to be in!
Therefore, in most cases, we would recommend setting up a Probate Trust. The purpose of the Probate Trust is for you to place assets into the Trust to cover your estimated Probate Fees. By using this Trust, the assets are held outside of the Estate and cannot be frozen on death, so are easily accessible to your Executors to pay the Probate Fees.
If this is something you think would be useful (and why wouldn’t it be) please get in touch to arrange a meeting for us to discuss it further.
Redwood is one of the Souths’ leading Pensions, Investments, Wills, Trusts & Estate Planning providers and we are dedicated to helping families to grow, protect and enjoy their wealth. With our unrivalled knowledge of Estate Planning and Probate, we can advise on any situation. Join us at one of our Free Public Information Seminars: Book online Book Me A Place!, Call us on 01489877 547 or Email firstname.lastname@example.org to book a no-obligation Initial Meeting with us to review your financial planning needs.