In January of this year, it seemed as though the world of probate was going to transition seamlessly into a new digital age. However, not everything has gone to plan.
The Government and the media were painting a very rosy picture about the Government's new £1bn computer digitisation system which was set to streamline and ease the probate application process. We (both the public and us professionals) were getting very excited by headlines such as "Digital service rolled out in full after successful trial" and "Probate application made simpler and easier with online service".
Fast forward just a few months and the story we are being told is a very different one. The headlines relating to the probate registry are particularly gloomy at the moment – "Tech glitches leave bereaved families waiting for months" (the Times), "probate system at risk of fraud as computers replace humans – despite 'skyrocketing' fees" (the Telegraph) and "IT glitches causing major grant-of-probate delays" (The Gazette).
So, what's the problem?
Well, it is threefold.
- IT issues
The first is the introduction of a computerised system aimed at streamlining the probate process. Unfortunately, the implementation of the new technology has not gone as planned.
In fact, HMCTS have confirmed that computer glitches are causing long delays in the issuing of grants of probate. This has led to some applicants having to wait up to 16 weeks for the grant to be issued. This can have a big and potentially costly impact, especially if estates assets such as properties, are waiting to be sold.
- A significant increase in probate fees
The second is the increase in probate fees which is due to take effect later on in the year. The fees are set to increase from £215 (personal applications) or £155 (if dealt with by a solicitor) in increments up to £6,000. My previous blog found here covers this topic in more detail.
The delays caused by the IT issues have been compounded by the rush by applicants to submit their Grant applications before the introduction of the controversial fee increase.
As an example, previously, the court aimed to process grant applications within 10 days, but applicants are now facing waits of as much as 16 weeks depending upon the registry to which they submit their application.
- Centralisation and loss of expertise
The third is the 'scaling' back of local probate registries and staff in order to create centralised 'probate hubs'.
The digitisation of the probate process along with the centralisation of 'probate hubs' will inevitably lead to a decrease in civil servants employed by the Government. These civil servants currently examine wills manually and are responsible for spotting fakes and alterations and determining whether the wills meet legal requirements. In getting rid of this expertise, the worry is that this could lead to an increase in fraudulent applications.
What effect are the problems having on bereaved families?
In short, big ones as problems with technology are compounding the pain and uncertainty surrounding the proposed increase in probate fees. Additionally, the delays are putting thousands of property transactions at risk of failing.
It is a common practice for beneficiaries and executors to rely on a property sale in order to meet an inheritance tax (IHT) liability. The delays caused by the introduction of new HMCTS software, coupled with the increase in probate applications is making it more difficult for executors to meet HMRC's tax deadlines. This can lead to financial penalties including interest and in some extreme cases, penalties up to as much as 100% of the inheritance tax due.
What's the answer?
There is no quick fix; however, a professional can provide comprehensive planning and advice in order to mitigate disruption.
How can solicitors help?
There are a number of ways that solicitors can help. For example, you can:
- Instruct a solicitor to draft a valid Will. Once drafted, the solicitor's practice can store the Will safely and securely, usually free of charge, until it is required to be submitted to the probate registry. This will diminish the risk of the Will not being valid. It also reduces any inference of undue influence or coercion.
- A well planned and drafted Will can also minimise the liability you may have to Inheritance Tax whilst ensuring your assets are passed on as and when you wish.
- Estate planning. This involves the sorting out of your affairs during your lifetime. A solicitor will be able to consider your circumstances and your aims and provide expert tailored advice to enable you to reach your goals.
- Provide advice on ways to mitigate your inheritance tax liability or reduce the probate fee payable by reducing the value of your estate (without compromising your standard of living). See my blog on mitigating your inheritance tax burden here.
- Consider setting up a trust (either during your lifetime or in your Will). These can be tax efficient vehicles that safeguard your assets and preserve control over future decisions and asset management.
It is very likely that your estate will incur the costs of the increased probate fees when you die – why not incur that cost during your lifetime and seek expert legal advice from a solicitor? The advice provided could very well save you significant amounts by way of reducing your tax liability and the level of probate fee that will be payable.