Probate Fees Unsuccessful Saga

Overwhelming opposition, fast tracked Governmental methods, and an order with loopholes: it is safe to say the draft Non-Contentious Probate (Fees) Order 2018 has been a consistent talking point over the last eight months.

Now, supposedly complete and ready for full implementation, the draft Non-Contentious Probate (Fees) Order 2018 has been wasting away on the parliamentary ‘Remaining Orders and Notices’ since April 2019.

Despite the disruption the Bill has caused to the wills, probate and estate planning sector over the past eight months, it is unlikely that it will receive official parliamentary approval before the imminent summer recess.

How did such a seemingly important Governmental order dwindle into its current unloved state of abandonment?

The probate fees saga is now in its second iteration having failed to gain traction and clear momentum from the findings of the 2016 consultation and 2017 proposed fee structure.

At that time, fees were said to start at £300 for any estate valued between £50,000 and £300,000. These fees were then set to rise to £20,000 for estates worth more than £2 million. Thankfully, for the probate professionals, regulators, and charitable groups in opposition of the fees, a snap 2017 general election saw the unpopular plans hidden in the long grass.

However, the fee was never far from the Government’s mind and, with a narrow election win under their belts, the Government launched fresh proposals which were pitched as less excessive than the previous iteration and a way of lifting over 30,000 estates out of the current fee structure.

At the moment, individuals pay a flat fee of £215 for any estate valued over £5,000. The fee remained standard because administrative costs do not increase with the value of the estate. However, under the new proposed rules, any estate worth over £50,000 would be charged a fee on a sliding scale, ranging from £250 for estates valued under £300,000, all the way to £6,000 for any estate valued over £2 million. This is nowhere near the amounts banded about in 2017, but still excessive.

Since the Government announced the new look draft Non-Contentious Probate (Fees) Order 2018, it has been plagued by controversy, with many accusing the Government of issuing a stealth death tax through the back door.

Firstly, the Government were scolded over the methods they chose to fast track the Order, by using a Statutory Instrument which allowed the Government the luxury of passing the Order without a full vote.

In the months that followed, the Order received a barrage of opposition. The charitable sector calculated that the increased structure would cause a loss of around £10 million per year in legacy gifts.

The Law Society, Labour Party and House of Lords were also disappointed in the Order throughout the process, accusing the Government of issuing a death tax on grieving families. Furthermore, many were critical of Governmental claims that the revenue accrued would be used to fund vital improvements to the current courts and tribunals system.

Again, these organisations pushed back by illuminating the fact that this reasoning resembled a hypothecated tax system; an approach the UK Government does not adhere to.  Money from one tax cannot be reserved for a specific public service.

Responding to the criticism, the 2018 draft Order was considered by the 14th Delegated Legislation Committee on 7th February 2019. The committee were in narrow agreement with the Order, passing it by nine votes to eight. Since this point, the Order has been awaiting its day in parliament, but has sat on the shelf for some time.

Following the vote and fearing the imminent enforcement of the Order, grieving families have applied for probate with more gusto than usual in a bid to miss the increased fee structure which caused unexpected delays. The Ministry of Justice’s adoption of new technology and the centralisation of the courts has exacerbated these delays further with backlogs of more than 8 weeks in most cases.

The Government has claimed that Brexit matters have had to take precedence over the Probate Fees Order, which is why it has withered in the wings for so long. However, the Law Society has argued that the draft, in its current form, has a number of technical issues which could provide a loophole for estates to avoid paying any fees at all. Furthermore, if the Statutory Instrument is laid in the current parliamentary session, it cannot be amended despite the errors.

Thus, the rejuvenated Probate Fees Order introduced in 2018 is back in the long grass. Parliament will soon disband for the summer recess and the draft Non-Contentious Probate (Fees) Order 2018 will lapse, in similar fashion to its predecessor.

In all likelihood, the Government will spend the summer fixing the errors before introducing a new Order when parliament returns, and the wills and estate planning practitioners will need to prepare themselves for another long-winded battle that is sure to unsettle the sector once again.

With probate legislation becoming increasingly uncertain, it is imperative to remain up to date with changes.

The Willwriting Academy is committed to ensuring that all Institute of Professional Willwriters’ (IPW) and Institute of Scottish Professional Willwriters’ members are able to enhance their expertise by offering an in depth two-day ‘Introduction to Probate and Estate Administration’ course. The course will run between the 3^rd and 4^th of September at the IBIS Styles Hotel in Birmingham.

Delegates will learn how to deal with estate administration with qualified guidance, improve their will writing skills by gaining a deeper understanding of Probate procedure, and understand how to expand their practice and earnings potential.

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