HM Courts & Tribunals Service has launched an online probate service. The service enables people to apply, pay and swear a statement of truth online –saving time and offering convenience to those dealing with bereavement at what is recognised as being a very challenging time. It also means that, for most people, a visit to a probate registry or solicitor’s office is no longer needed, speeding up the process while making it more straightforward and efficient.
This new service can be used if the deceased was a permanent resident in England or Wales, if the applicant has the original will and is named as an executor, and for up to four joint applicants. In addition, the applicant must have the original or an interim death certificate from the coroner and have already reported the estates’ value to HMRC.
It will still be necessary to send documents, such as copies of the will, completed IHT forms and other related documents such as a renunciation form if someone has declined to act as executor, by post to the local Probate Registry after submission of the online application. If the will has been updated with a codicil, the executor will need to submit a paper application, as will any applicant wishing to apply in Welsh. Online services for more complex cases or applications from solicitors will be launched later this year.
While work to simplify and streamline the probate process should be welcomed and that firms participating in the pilot had given positive reports, inevitably problems are going to arise. One will be that to the lay person 'Probate' is administering an estate, which, of course, it is isn't. Obtaining Probate is only one aspect of that process.
Before applying, the applicant will also need to establish the size of the estate and what assets and liabilities are involved. In many cases, this means tallying up any bank or building society accounts, any debts owed by the deceased, and valuing any property and chattels, where, especially in the case of the latter, HMRC will expect full details of the personal chattels to be reported in the appropriate sections of the Inheritance Tax forms. There is no doubt that the Revenue pays close attention to the values included for household and personal goods. The UK's household contents is now estimated to be nudging towards £1 trillion. In addition there may be Income or Capital Gains Tax information required in the submission.
More complex estates can quickly become difficult to administer and many members of the public are unaware that they can find themselves personally liable for any errors in the submission of information. If valuations are submitted by the lay applicant, how accurate are these likely to be, for example, regarding jewellery where both stone or bullion values may be considerably in excess of what a lay person without access to current market information, may be able to assess? An insurance valuation can, of course be a good starting point, but as one in four homes (16 million) in the UK don’t have contents insurance, (let alone keeping such insurance values updated) many will not have even that to fall back on.
When all or part of the residue of an estate is left to charity, it will always be safest to involve a probate professional, preferably a solicitor. There are complexities to the law relating to charitable estates that a lay person simply cannot reasonably be expected to know. Charities also have administrative requirements placed upon them by their auditors that solicitors understand and can deal with very efficiently.
There are also concerns over the swearing of an executor/administrator's oath which is one of the key features in preventing fraud. Online applicants do not "swear" a statement of truth, they simply confirm by ticking the relevant box. The submission of a form over the internet is such a simple and faceless activity that more people might think they can get away with it.
Moreover, while the threshold at which payment of probate fees is set to be lifted to £50,000 from April 2019 with, according to the Ministry of Justice, an extra 25,000 estates per year not required to pay any fees at all, estate's s higher of value than this, will see a sharp increase in probate fees.
The fee hikes will see an increase of up to 28 times for some estates, while the fees have no bearing on the actual cost of the service provided. The services involved in a grant of probate are fundamentally the same, regardless of the value of the estate. The government expects to raise an estimated £145m a year from 2019/20 once the higher fees come into effect.
One consequence of this may be to encourage individuals to undertake probate work themselves, to save costs. It is perhaps worth noting that in a recent Office of Tax Simplification survey of 3,000 people, only 11% of respondents who did not use an adviser stated that they found the process of making an IHT return simple and user friendly.