How many of you have heard your clients complain about the various fees and costs they have to pay after the death of a loved one or the expense of going through the probate process? Well, the next time you hear someone complain, you might want to tell them to be glad they don’t live in England! (Full disclosure: I’ve spent time living and working in England, and it’s a delightful place, even if a little pricey.)
The Financial Times recently reported on a proposal to raise the cost of obtaining probate in England and Wales. Under the proposal, the fees for obtaining probate through the courts, which the Financial Times states is necessary for personal representatives to be able administer an estate, will increase from £155 (or £215 if a lawyer is used) to up to an astonishing £20,000 – or approximately $28,000! The proposed fees would be charged on a sliding scale so that estates valued up to £50,000 (approximately $70,000) would pay no fees, and estates valued above £2 million (approximately $2.8 million) would pay £20,000. These proposed fees would be in addition to any inheritance tax that is owed.
The revenues raised from the proposed fees would go towards the court system and are expected to raise up to £250 million per year.
Practitioners in England and Wales are concerned that the new fees would be especially difficult for cash-poor estates to pay. As with many estates in the United States, the value of many estates in England and Wales is largely comprised of real property. With property prices being so high – the average home price in London is a reported £536,000 – many relatively modest estates would be subject to significantly higher fees under the new proposal and may not have the cash to pay them.
The Ministry of Justice for England and Wales is continuing to consider the proposal and is soliciting comments through April 1. For more information from the Financial Times, click here.