Probate Delays Catalyst For 8% Decline In Legacy Income

Bequests to charities have fallen in the third quarter of 2019 as the recent probate delays take hold on the sector.

According to recent statistics obtained by Legacy Foresight, bequests to charities have fallen by 8%, year on year, in the third quarter of 2019.

The analysis has highlighted the damage caused by the probate delays with 6% of the decline attributed to this issue.

Although HM Courts and Tribunals Service (HMCTS) has claimed the probate registry’s service is now operating at normal levels of two weeks to return a grant of probate, the charity sector has commented on the impact the delays have had on their legacy income.

Matthew Lagden, Chairman of The Institute of Legacy Management, commented:

“ILM has been following the situation at the Probate Registry with concern since April of this year when the number of Grants of Probate being processed on a weekly basis fell dramatically. There is no question that although there are a number of factors, the central reason for the falls in legacy income that many charities have experienced this year is the delays in issuing Grants of Probate.

“We have been working with partner organisations such as Remember a Charity and the Law Society to press HMCTS for a resolution to the issue. At some points this year our members were reporting bequest numbers that were as much as 24% below what they would have expected, so it is clear that although there are still issues that need to be resolved, the situation is improving.

“We will continue to work with our partners on this issue until we are satisfied that all the issues have been resolved and the backlog has been cleared. We are very grateful to Legacy Foresight for the accurate data they have produced, which has been very helpful in raising our case with HMCTS.”

Rob Cope, Director of Remember A Charity, said:

“The probate delays have had a real impact on charities’ legacy income and, ultimately, this means that the public’s generous donations are not reaching frontline services. We know that HMCTS has been working hard behind the scenes to address the backlog and it’s been hugely encouraging to see their confirmation that the problems will be resolved by the end of the year. After all, gifts in Wills are the largest source of voluntary income to charities and this funding is vital.”

Chris Farmelo, Technical Director of Legacy Foresight, said:

“Ongoing delays caused by the introduction of the new structure and processes at HMCTS have been affecting legacy income and bequest figures for the past 9 months, which we’ve highlighted in Legacy Monitor quarterly bulletins throughout the year.

“Once the backlog is cleared, charities can expect a significant boost to bequest numbers to compensate for the shortfall in bequests experienced this year. For Legacy Monitor Consortium members specifically, who make up over 50% of the legacy market overall, this increase looks to be substantial; estimated at around 24% higher in October to December than would otherwise have been the case.”

“Near-term prospects for legacy income remain uncertain, depending upon on how rapidly the backlog at probate can be unwound and the impact of the general election on the nature of the UK’s future relationship with the EU. However, the period 2021-2024 is expected to see stronger growth in key economic variables, which combined with an underlying rise in the number of deaths, will generate legacy income growth of nearly 4% per annum”.

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