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Probate Fees are set to go through the roof - another back-door tax on dying

The cost of leaving a legacy for your family is about to soar

Soaring Probate Fees - a Stealth Tax

The Ministry of Justice has announced a fee scale that increases the cost of probate by up to 130 times the present fee. Here are some ways of managing the cost of leaving a legacy for your family, so their inheritance is maximised.

Having given us all a little sweetie in 2015 by phasing in more generous Inheritance Tax allowances for family homes, the government has now followed that up with a second kick in the teeth, by introducing a “death tax” by the back door.

The first blow came shortly after the government introduced the new family homes inheritance tax allowance, when it quietly called off plans to bring in a much-anticipated “care costs cap”, which would have meant that no more than £72,000 of the value of a family home could have been taken to pay for residential care in later life.

Now, in a fresh blow, the Ministry of Justice has announced a dramatic increase in the fees charged for obtaining a Grant of Probate after someone has died, which is the document that’s needed to enable an inheritance to take effect.

What is this new “Stealth Tax"?

Currently, applying for a Grant of Probate costs a flat fee of £155 if a solicitor is representing you. It costs more if you are representing yourself and the service is free of charge for estates that are worth £5000 or less.

The Ministry of Justice is now bringing in a staggered fee system, which increases the cost of probate in bands according to the value of the estate.

For estates worth £50,000 to £300,000, the fee will approximately double, to £300.

However, a six-fold increase, to a thousand pounds, is planned for estates worth £300,00 to £500,000.

And the maximum fee under the new scheme – albeit for wealthiest of estates - will be an astonishing £20,000, a one-hundred-and-thirty-fold increase.

The increase bears no relation at all to the amount of work the Ministry of Justice must do to prepare grants. The same service is given, whether an estate is worth five thousand or five million pounds.

Actually, the government has been very open about the fact that this is a cash-generating scheme and nothing more. Ministers say the new proposals will raise £250million a year towards deficit reduction. Effectively, they have had no shame at all in imposing a Death Tax.

How can you Protect your Assets and Maximise your Family’s Inheritance?

The trend seems to be toward ever-increasing penalties on getting older, passing away and providing for the next generation. So, how can we, as private individuals, take steps to reduce the impact on our families and maximise their inheritance? In a nutshell, it’s all about intelligent forward planning – acting in mid-life to ensure that your legacy for your family is protected when the time comes.

Here at WillWritten, we have a range of estate plans that are designed to protect your assets as far as possible for the next generation.

These include:

  • Ways of shielding up to 75% of the value of your home from the cost of care in later life.
  • Ways of addressing your Inheritance Tax liability well in advance, without your family having to take a large bite out of your estate’s assets.
  • A great way of putting a strict limit on the cost to your family of using a solicitor to order your affairs after you’re gone, namely our Probate Guarantee.

Our Probate Guarantee enables your family to employ a solicitor to handle the Probate process for half the hourly rate it normally costs. As a further safety net, the overall solicitor’s bill is capped at 1.5% of the value of your estate.  Limiting legal fees in this way gives your family more financial room to accommodate the Ministry of Justice’s new increases.

To explore how you can make sure your assets are protected for the people you love, just contact us for all the advice you need and a plan tailored just for you. Call us on 0151 601 5399 or fill in the contact form below. We’re here to help.

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