Get rid of all your old paper five pound notes by tomorrow 5 May, as shops will cease taking them. If you find some this evening, blow it on a takeaway or lots of chocolate-you have my permission!
The BBC have published a new article with breaking news regarding the proposed increases to probate fees in May.
As you are probably aware, Probate fees had been due to rise from £155 or £215 to up to £20,000 for some estates in England and Wales from May this year however, the Ministry of Justice said there was now not enough time for the legislation – dubbed a “stealth death tax” by critics – to go through Parliament.
It is noteworthy that a senior Conservative declined to say if the scheme would be brought back if the prime minister was re-elected. Many believe the increased fees are merely “on hold” and that there will be some price increase in the near future.
Currently, there is a flat fee of either £155 or £215 per application for probate, depending on whether or not the application is made through a solicitor. There is no fee paid for estates worth under £5,000.
Under the proposed changes this system would have been replaced by a sliding fee scale linked to the value of the estate, with fees ranging from £0 to £20,000.
Watch this space for further news!
Funeral directors have issued a stark warning: it’s vital that everyone makes plans to pass on all the passwords for their accounts before they die – or they risk leaving their loved ones with a major headache.
The average person has eight passwords: they ensure that everything from our bank account to our utility bills and even our music and photos are locked securely online. The trouble is that if we don’t let our loved ones know our passwords, when we die, they will be locked out of all of it.
Judith Donovan, Chair of the Keep Me Posted campaign, says one of the great unintended consequences of online billing is that without the passwords, it becomes far harder to access accounts, which can make probate a “massive issue”.
A study by Co-operative Funeral Care last year found that almost four out of five people who have tried to deal with an estate through online accounts have faced issues. Most organisations you deal with online will help once you have a death certificate, but this help may to be what you would ideally like.
If your other half is still living in your home, and you took care of all the bills, they will need the password in order to access the accounts. Without it they could be racking up debts they have no idea about.
It’s not just the accounts we know about either. Without a list of everything you hold online – alongside the passwords – there’s a real risk that savings accounts, pensions and investments may be overlooked altogether and lost forever.
Even sites that may not seem important can have financial implications. You may have hundreds of pounds in cashback or gambling accounts, you might have a balance on Paypal, or you may have live eBay purchases and sales – which the estate is legally liable for.
Personal items like photos and music that are stored online may also be lost forever, while social media cannot be updated, which can cause heartache and confusion for people who come across the account.
Then there are email accounts. Without access to those, you may miss vital communications from businesses, as well as family and friends.
So, think about passing those passwords on to your executors now, to potentially save them a major headache!
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If you are dealing with the estate of someone who has died, you need to obtain what’s known as a ‘grant of probate’ before you can distribute their assets as set out in their will.
Prior to May 2017 a flat fee of £215 applies, despite value of estate. Estates under £5,000 are no fee.
From May 2017 the probate fees will change as shown below.
The total estate has to be valued. This includes property, cash, savings, goods and chattels etc. If the estate value in total is under £50,000 then there is no charge for probate.
Many estates will exceed this and therefore have to pay the new higher charges. Without paying them, nothing can be legally released to beneficiaries.
Value of estate New fee
|Less than £50,000||£0|
|£50,000 to £300,000||£300|
|£300,000 to £500,000||£1,000|
|£500,000 to £1m||£4,000|
|£1m to £1.6m||£8,000|
|£1.6m to £2||£12,000|
|£2m and above||£20,000|
Case study: Sally and Jim have already lost their father. Then their mother passes away. They are named as the executors and the two main beneficiaries of the will.
The property is worth £275,000 and the savings, car and goods and chattels are worth £40,000.
This now means that Sally and Jim have to be able to pay £1000 in probate fees before they can receive their inheritance.
Some people may be forced to take loans if they cannot find the fees. In some cases, this will be on top of any inheritance tax payable if the estate falls into this bracket.
This is even harder for people who are acting as executors of a will without benefitting from it. They may claim the fees back from the estate but will still need to find them first.
With this in mind, take some advice about your estate. There are in some cases, strategies you can take that reduce the valuation of your estate, reducing fees for your loved ones.
Call Western Wills for a free consultation.
Katie Price has revealed that she hasn’t updated her Will in several years, explaining that her ex-husband Peter Andre and only three of her five children would inherit her estate if she died unexpectedly.
During a discussion on Loose Women, Katie admitted her current husband and their two children were not named as beneficiaries in her Will and would be omitted from any distribution of her estate as it stands.
Katie Price stated: “Talking of Wills, Pete would get everything and Junior, Princess and Harvey. I haven’t even changed my Will thinking about it, and I’ve been married twice since Pete!”
However, she evidently does not realise that marriage automatically revokes a Will, which means that her previously written documents are likely to be invalid and her estate would be dealt with under the rules of intestacy.
These legal regulations will divide the estate in a pre-determined way and, even if the person is married, in a civil-partnership or have step-children, assets may not automatically be distributed to the family members that expect to inherit them.
The celebrity’s well documented private life is a high profile example of a ‘blended family’, where couples share children from previous relationships and partners. In the case of Katie Price, she has five children from three fathers and has been married three times. The fact that her Will is likely to be invalid is particularly concerning given that her personal wealth is estimated at £45 million.
Tom Curran, Chief Executive at Kings Court Trust said: “Although Katie Price has gone through the process of creating a Will, due to her personal circumstances it could be completely invalid – which means her wider family could claim a stake in her estate. It will also mean that any estate planning she has put in place could be meaningless and as a result her estate could be taxed at 40%.
People may assume that a Will is only beneficial in later life or if the individual is not in good health. However, regardless of your personal circumstances it is important to plan ahead, particularly if you own a property or have savings, investments, insurance policies or own a business. There are also numerous benefits to having a Will, from ensuring you leave an inheritance to family and friends, to potentially reducing the amount of Inheritance Tax that may be payable on your estate.