Bereaved families in the UK are facing a significant financial burden as probate delays continue to accumulate significant costs and unpaid taxes, adding to the distress and emotional strain during an already difficult time.
Whether using online systems or the traditional paper process, applicants can now expect a lengthy wait of up to four months or more for probate to be granted. The backlog, a long-lasting result of the challenges created by the Covid pandemic, currently stands at around 40,000 applications, and shows no signs of improving, leaving many families uncertain of when or how they can find a resolution.
What is a Grant of Probate, and why do you need one?
Before you can tackle the settlement and distribution of someone’s assets or estate upon their death, you must first obtain legal authority to act on their behalf. In England, Wales, and Northern Ireland, this is known as a grant of probate, while in Scotland, it is called a grant of confirmation.
In most cases, you will need a grant of probate to serve as the executor of someone’s estate. However, if the estate is valued at less than £10,000 or if the deceased shared joint ownership, there may be no need for a grant of probate.
To determine if probate is necessary, the executor must notify each institution, such as banks or investment brokers, about the death and provide a death certificate. If probate is required, an application must be submitted.
The current challenge with Probate applications
Since the start of the COVID-19 pandemic, the probate service has seen a spike in applications, and signs are that the death rate will continue to be higher than the five-year average until the end of the summer at the very least.
In May 2022 alone, the HMCTS revealed that 22,791 applications were received, resulting in 25,096 grants issued. Looking at the bigger picture, the number of grants issued in 2021 is the second highest in the past decade, surpassing last year’s figures by a staggering 17,000.
As of March this year, out of the 26,636 grants issued, a notable 21,232 were the outcome of digital applications. This shows a clear shift towards digital processes. However, it’s worth noting that these digital applications took an average of 8.2 weeks to be processed. On the other hand, 5,405 grants were obtained through traditional paper applications, which took an average of 21.1 weeks.
These statistics underscore the need to embrace digital processes for probate applications, as they bring efficiency and faster processing times, but it’s essential to be aware that additional delays can occur if an application lacks vital information and is sent back by HMCTS.
Stopped digital applications experienced an average delay of 17.7 weeks, while stopped paper applications endured a significantly longer wait time of over seven months (29.3 weeks).
The main causes for stopped applications:
- Inheritance tax (IHT) – Both HMCTS and HMRC need to be processed simultaneously, and HMCTS is unable to proceed with an application until the stipulated 20-working-day timeframe has passed.
- Incomplete executor information – HMCTS is obligated to inquire about any missing details and cannot move forward without resolving them.
- Will condition – HMCTS encourages upfront explanations if Will shows signs of missing pages, damage, doctoring, or even unexplained pen marks and staple holes!
Additionally, a grant of probate can be held up by any one of the following circumstances;
- A property or asset has been sold
- An executor has died
- There are missing beneficiaries
- Where there are foreign assets
- if the deceased owned shares or interests in a trust
What problems are caused by Probate delays?
Delays in settling an estate can have serious financial consequences for beneficiaries. Here are some important things to consider:
- If Inheritance Tax is owed, the first payment must be made within the first six months after the death. HMRC will not issue a receipt to the Probate Registry until payment is received.
- The tax is split into two sections – tax that can be paid by instalments, primarily tax due on properties, and tax that cannot be paid by instalments, primarily tax due on cash assets.
- The tax that cannot be paid by instalments must be paid straight away as well as the first instalment of the tax that can be paid by instalments. You can request payment directly from the bank by providing them with an IHT423 which is the form to request direct payment.
- After six months, HMRC applies interest to any remaining balance.
- Properties with monthly service charges can incur additional costs due to delays.
- Vacant properties may require special insurance coverage.
- Waiting for probate to be granted can prolong the process of selling a property, potentially discouraging buyers.
- Longer timescales can increase expenses related to property maintenance until probate is granted.
Having a current Will in place should help to ensure a smoother and more efficient probate process, as with a Will, it is evident who the executors and beneficiaries are, as well as what assets need distributing and how.
What is the solution?
HMCTS is actively exploring various methods to enhance the efficiency and speed of its service. This includes a focus on improving IT systems and reducing the reliance on paper applications. Digital applications, on average, are processed in less than half the time it takes to process paper applications. This will undoubtedly contribute to a more expedited and effective service.
However, irrespective of the application method chosen, gaining a Grant of Probate will always involve a significant amount of legal, tax, and administrative work, which can be time-consuming, and complex by its very nature. As such it is always wise to enlist the support of a probate specialist should you want to minimise the risk of complications causing a stoppage or compounding the existing processing delays.
