Individuals Avoid Probate Fees

June 25, 2012 - PRLog -- Data released from the Probate Service last year, showed that grants issued to solicitors fell nearly 30% between 2006 and 2010.  The decline in solicitor probate applications has dipped dramatically; falling from 64% in 2010 to 44% in 2011.  
The majority of 2011 grants went to individuals, with 56% of people personally applying for probate.  That’s 86,470 individuals that opted to handle probate applications without the help of a solicitor.  

Experts have suggested that this shift correlates with the start of the credit crunch.  Implying that executors are choosing to handle probate themselves to avoid probate fees.  

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This also happens to coincide with a wave of negative publicity about extortionate probate fees charged by some high street banks and solicitors.  Could the negative press have changed public opinion?

In 2009 the Guardian published an article titled; “The £600m RIP-off.” This caused outrage over claims that £600 million of the £1.25bn a year probate market is made up of shameful over-charging by high street banks and solicitors.  Thus followed an onslaught of reports from Which?, The Daily Mail and BBC’s Rip Off Britain and Panorama.  

These focused on the way probate fees were calculated, either as a percentage of the value of the estate, or by traditional hourly-rates plus disbursements.  Banks and solicitors were slammed for percentage fees, not proportionate to the amount of work carried out.  Some companies operating in the unregulated industry were accused of being reticent and even dishonest concerning fees.  

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Others suggest the shift is representative of falling property prices, which has resulted in fewer estates valued above the threshold requiring a Grant.  A decrease in the number of estates that exceed the inheritance tax threshold may also have made DIY probate easier.  People may feel more confident in handling probate when there’s no complex inheritance tax return or dealings with HMRC.

Furthermore, the internet has made information more readily available and it’s possible to purchase downloadable DIY probate kits, making it easier than ever before to handle estate administration.  While probate can be straightforward in some cases, it is not recommended for complex estates, intestate death, when inheritance tax is owed or when there are assets abroad.