Proposed changes to the Probate fee structures earlier this year are creating severe backlogs in the system, meaning that Grants of Probate are being delayed causing real issues and hardship for beneficiaries.
Laura Colville, Senior Associate Solicitor in our Private Client team, in the Chichester office, explains what is going on, the impact it is having and if a solution is in sight.
On the 1st April 2019, there was due to be a significant increase in Probate fees as recommended by the Government. This was going to see the flat fee of £155 (or £215 for personal applications) change to a sliding scale of fees depending on the value of the Estate.
The largest Estates would pay £6,000, a £1M Estate paying £4000 and an Estate of £500,000 paying £2,500. This fee hike was in addition to any Inheritance Tax already being due from an Estate. The fees have been disputed by the legal profession and others and, due to the ongoing Brexit saga, the proposal to increase the fees was again pulled on 27th March 2019.
However, by then, many early applications had been submitted to the Probate Registries in order to avoid the increase in the fees. One report states that the Liverpool Probate Registry received 250 applications in just one day in the lead up to the 1st April fees increase date.
A “Perfect Storm”
In addition, around the same time as the proposed fee increase, the Probate Registries’ computer systems were also changed. It became immediately apparent that there was a fault in the system which led to processing delays. Not only that, but a new-style Grant of Probate form was also introduced with a fancy hologram.
The special paper for the new style Grant did not feed through the Registry’s printers. This caused further delays whilst this issue was rectified. However further delays were experienced when the Probate Registries then ran out of their special paper (!) which meant… you guessed it, further delays and a “Perfect Storm”.
In addition to all of these errors, the Government has decided that it is the perfect time to close Probate Registries. The Ministry of Justice (MOJ) plans to close the 10 regional locations and move the service under one roof at the Courts Tribunals Service Centre in Birmingham, The MOJ has given notice to many experienced staff members.
Probate lawyers are rightly concerned by the removal of face-to-face service for work that often requires familiarity with and trust in those administering it.
Impact on Probate Lawyers
So how has this impacted upon us as Private Client Solicitors? Well, the turnaround time to obtain a Grant of Probate has increased from the usual 2 weeks to easily 12 weeks or more.
Law firms are struggling because we cannot progress Probate matters and collect in assets in order to progress the administration of the Estate.
Impact on Families
Families are struggling because bereaved widows and widowers cannot access their spouse’s bank accounts. Property sales are falling through as mortgage offers expire or purchasers simply get fed up waiting to progress their purchase.
Here are a couple of real life examples of hardship being faced here in West Sussex by these outrageous delays:
Example 1: Collapsed House Sale
In Chichester, one Grant that was applied for on 8th March 2019 has still not been issued. In that case, the deceased was domiciled abroad and had made a home-made Will dealing with his UK assets, including a property which was to be sold.
On 29th March 2019, the Probate Registry queried where the Will had been executed, which is not something that has to be addressed when making an application. Despite responding to this query immediately, the application was then put to the back of the queue.
As at 17th June 2019, the Grant had still not been issued. As a result of this delay (some 14 weeks and counting) the prospective purchaser’s mortgage offer expired resulting in the sale being lost. Further, the Executor of this Estate has had to fund all the expenses, including payment of the Inheritance Tax.
He will be reimbursed once the sale of the property completes but this cannot happen until the Grant is issued. Worse still, the Executor is not a beneficiary but is acting as a good friend to the deceased.
Example 2: Real Financial Difficulties
Another Chichester case involved a daughter whose father passed away leaving her as sole beneficiary of the Estate and also the Executor. There is a requirement to report in a long form Inheritance Tax Account.
The turnaround time for HMRC is generally about four weeks when things are running smoothly. Add to this the three month plus delays with the Probate Registry means that the daughter is now looking at obtaining the Grant of Probate at some point in September 2019.
She had been made redundant recently and was in need of income from the renting of her late father’s property. Unfortunately, without the Grant of Probate, the rental cannot take place, leaving the daughter very much out of pocket and in financial difficulties.
Where are we now?
On 30th May 2019, the Winchester Probate Registry bulletin reported that they were working on applications received on 27th March 2019 and correspondence received on 26th March 2019. All cases are being processed in date order.
I spoke to Winchester Probate Registry on 13th June 2019 which confirmed that it was working on correspondence received on 3rd April 2019. This illustrates that is taking 2 weeks to get through 1 weeks’ worth of correspondence.
Probate Registries are currently training more staff (presumably temporary staff given that the regional Probate Registry offices are closing) and this is supposed to help manage the backlog.
We are advising our clients, already understandably upset, of the risks and impacts that these delays could continue to have. I am not confident that the situation will improve in the short term but I hope to be proved wrong.
Watch this space…
Laura Colville is a Senior Associate Solicitor based in our Chichester Office and advises on all aspects of Wills, Probate, Trusts & Tax Planning and Estate Administration. She is a fully accredited member of Solicitors for the Elderly and also a Dementia Friend.
For more information, contact Laura on 01243 787899 or email firstname.lastname@example.org