"Government increasing taxes on death" says probate expert
Government proposals to alter fixed rate probate fees to a banding system has been called "inheritance tax by the back door" by probate specialist, Tony Crocker of IWC.
The fixed fee for probate applications rose recently – a move, said the government, which was deemed necessary to fund additional administrative work carried out by the Probate Service.
These new proposals however, which are out for consultation until 1 April, would see probate fees being charged on estates valued in excess of £50,000 according to a banding system. Fees would then start at £300 for estates valued between £50,001 and £300,000; up to £20,000 for estates valued above £2 million.
Currently, estates under £5000 are not subject to probate legislation and the government plans to raise this threshold to £50,000, meaning that according to its figures, over half of estates would pay no probate fee at all.
IWC questions the validity of this view however, with the average London house price now standing at over £500,000. It is these house prices, the company claims, which will cause problems for executors faced with paying money up front for probate fees, funeral fees and inheritance tax at 40% – and not enough money in the deceased's bank account to cover them. These executors will be forced to offer up the remaining funds themselves or, as the government suggests, to take out a short term bank loan, until the property sells and they can recoup the funds – which of course will attract interest rates and affect their credit rating.
Although packaged as a move to assist those dealing with smaller estates, IWC's Tony Crocker says that, in its bid to raise £250 million for the Exchequer, the government is actually "giving with one hand and taking with the other".
For anyone who suspects that their next of kin may find themselves struggling financially with these new proposed changes, they may be able to avoid probate altogether, by placing their property into trust, now.
In our next blog post, we'll outline how trusts can be a means of avoiding probate, how to create a trust and what happens to it after your death.
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Probate Service changes makes for faster service
Changes to the way in which the Probate Service operates, has resulted in significantly decreased probate process times, in the majority of cases.
The changes, which were implemented on 22 April this year, focused on the probate application fee structure – which was often complicated and commonly caused significant delays.
Recently released statistics however, show that since this new structure was adopted, the Probate Service has issued 161,000 grants of representation submitted by probate professionals within its target of seven working days. In addition, it has issued 97.6% of its grants of representation through applications submitted personally, within its deadline of eight weeks.
A grant of representation is usually presented to the executor of an estate. This documentation is required in order to allow the executor to begin handling the deceased's financial affairs – liaising with banks and other financial institutions, paying bills and taxes before finally distributing the remainder of the person's assets.
In the past, it could often take several weeks in order for applications made by probate professionals to be processed. It pays therefore, to use a probate expert, when dealing with the death of an individual. Our probate experts at IWC Ltd can ensure that you will receive the best legal advice, the best value for money and in most cases, a speedy service. Contact us today on 0800 612 6105 or 020 8150 2010.
Policeman produced fraudulent will
It was disappointing to learn of a former police officer, who tried to produce a fraudulent will in the name of his deceased father.
Ronald Hart had not actually written a will, and so it was that he in fact died intestate. His son however, 41 year old Darren Hart, subsequently produced a will for the probate service which, he said, belonged to his father.
The will was discovered to be fraudulent, although Darren Hart denied the charge in court recently. The jury found him to be guilty and he is due to be sentenced later next month.
Mr Hart was found to have had an accomplice in the fraud, although a decision has not yet been made, whether or not to prosecute this other man.
It is bad enough to try and forge the will of his late father, but for an ex-policeman to turn to crime in this way is astounding. This case does demonstrate two things, however:
a. It’s never a good idea to try and fool the probate service
b. It is a good idea however, to prepare a will in advance, so this kind of activity cannot take place.
Being well prepared means that forgery, ambiguity and potential disputes can all be avoided, ensuring that the money you earn during your lifetime, is given to whom you choose, after you’ve gone.
- Practitioners refuse to quote fixed probate fees
- Extra charges are buried in the small print
- Grieving relatives are subjected to hard-sell tactics
- Banks charging up to 4.5% of the estate value
- Families are prevented from shopping around for better deals
- Unregulated firms give out poor or misleading advice
- Anyone with an existing will should pay close attention to executor clauses. Check who is named and find out their charges.
- Obtain at least 3 quotes.
- Get a fixed fee for probate.
- Read the small print and make sure there are no hidden extras.
- Choose a company that’s regulated by the Society of Will Writers and Estate Planning Practitioners.
- If you’ve found yourself with an unwanted executor, we can let you know where you stand, call us for free advice on 0800 612 6105.