Reactions to changes in probate fees
- AuthorCaroline Dowding
On 18 February, the Ministry of Justice announced that from May 2017, the fee for applying for a Grant of Probate will go from being a fixed fee of £155 for solicitors making applications, to between £300 and £20,000 depending on the value of your estate.
It has been less than three weeks since this announcement and already people are having their say, with one article in particular on ThisisMoney.co.uk entitled, “Turning probate fees into a stealth Tax looks like profiteering on the bereaved”. Whilst the article itself was interesting, it was not the contents of the article itself that caught our attention, but the comments from the general public that highlighted an important question that seems to be on everyone’s lips: “How do I avoid the fee increase?”.
Once particular comment stood out:
“I am hoping by having financial power of attorney over my father and his property signed over to myself and my brother that we avoid this rigmarole when the day comes”
Powers of attorney are designed so that the donor (the person making the power of attorney) can name individuals (attorneys) to assist them with their finances if and when they are unable to make decisions for themselves, or need a little extra assistance dealing with such matters. Attorneys must always act in the best interest of the donor, and are not allowed to give gifts from the donor’s assets without the consent of the Court of Protection. Equally, the power of attorney document ceases to be valid on the death of the donor. What this individual is proposing to do is abuse his power as an attorney to try to save on the grant of probate application fee.
We are concerned that some people may take drastic measures to avoid probate fees. These measures may be morally wrong, illegal, and often unnecessary. We are constantly seeing the pitfalls of these actions, especially when a new “tax” is introduced. In almost every case the actions taken to avoid tax and other related costs actually end up making things worse, and often result in costs higher than the probate fees themselves. Efficient tax planning and professional advice could avoid these issues and save money in the long run.
If you have concerns about the fee increase, or wish to talk to an expert about effective tax planning methods, then please contact one of our experts who will be able to adequately assess your needs to give you tailored advice.
I am based in our Colchester office and can be contacted on 01206 217394 or email@example.com.