Liverpool lawyer warns of rise in probate fees for bereaved families
A leading Liverpool lawyer is warning of an imminent new “stealth tax” that could cost bereaved families thousands of pounds.
Karla Cope, an associate and the new head of Liverpool law firm MSB’s private client team, says the government’s new probate fee structure will see the probate fee, currently a flat £215 (or £155 if applying through a legal firm), be set according to the value of the deceased’s estate.
The probate fee is charged for securing legal control over a deceased person’s estate and the minimum fee will rise to £250 for estates with assets of less than £300,000. There will be no fee for estates worth less than £50,000.
For estates valued at between £300,00 and £500,000 this rises to £750, then up to £2,500 for estates up to £1 million and £4,000 for estates worth between £1m and £2m. The top fee is £6,000 for estates worth more than £2m.
Karla said: “The changes to the probate fees, which could be viewed as a stealth tax, have been delayed due to Brexit. But once parliament finds the time to pass the new charges they will come into effect within 21 days.”
Having joined MSB in March, Karla is now looking to grow the firm’s private client department and says an increasing number of people are finding themselves covered by the laws on inheritance tax and planning ahead was essential.
She added: “The government currently takes in around £5.2 billion a year via inheritance tax and this is projected to rise to £7bn by 2023. We find that most people are happy to pay their share of tax – but they want it to be fair. We have the expertise to ensure they don’t pay more than they should.
“During the initial consultation we will take full details of a client’s estate and it may be surprising to learn that not all lawyers will bother with such basics. I believe attention to detail is this area is essential.
“We will then provide advice to them regarding the changes in the inheritance tax law and provide them with an idea of what their position regarding care home fees would look like. If any work is needed off the back of the review then there is a charge for that and I provide that price at the meeting. It’s then up to the client whether they go ahead or not.”
Karla says there are a couple of different trusts which will protect half of the property on the death of the first spouse, and if the client has other assets that match the value of the property, then there are a couple of different trusts that can protect half of the property – plus any assets in the deceased’s sole name.
If a client has assets valued over £23,250, including their property, then the local authority will expect them to pay for care.
“The big issue to stress to clients when they speak to me for the first time is what the value of the estates look like if they have not put any planning in place and one partner dies?” said Karla.
“It sounds stark, but the fact of the matter is that they could end paying out way more than they need to, which is why forward planning in this area is so important. Of course, if a client already has sufficient planning in place, great. I will let them know and there is no fee.”