Inheritance tax: Probate changes create ‘a total shambles’ as delays of 32 weeks emerge | Personal Finance | Finance


Inheritance tax (IHT) and overall estate planning can be complicated to manage and as such, families regularly delegate the responsibility to experts who specialise in estate planning. Before these experts can act however, they must apply for the legal right to deal with someone’s property, money and possessions (their estate) which, so long as a will is in place, is granted through probate.

While probate is designed to make estate planning run smoothly, there have been well documented delays at the probate registry in recent months as coronavirus delayed state processes.

Additionally, in recent weeks the government has set out plans to shift all probate applications submitted by solicitors online, no doubt in an effort to reduce delays and move the system into the digital age.

In the coming months, the Ministry of Justice expects around three-quarters of professional user applications to move online and while this may sound worthwhile in practice, warnings have emerged within the industry that the infrastructure in place will simply not cope.

As the new rules were unveiled, Debra Burton, a Legal Director at Lime Solicitors, warned problems could emerge: “Online probate registry applications for solicitors are now mandatory – but the process is far from complete.

READ MORE: Inheritance tax: How to cover debts following unexpected wealth

“HMRC and HMCTS are still operating on two different systems and whilst HMRC are supposed to be emailing the required information direct to the Probate Registry the forms are delayed or not arriving.

“Even when applications are made online, there is still the requirement to send original Wills to the Probate Registry by post.

“Many practitioners have reported a massive increase in the numbers of original probate applications (including Wills) being lost by the Probate Registries in the last few months as they have struggled to cope with the lack of investment in the rest of the probate infrastructure made worse by covid-19.”

This sentiment was also shared by Solicitors for the Elderly (SFE), a membership body representing 1,700 lawyers specialising in supporting the elderly and vulnerable clients.

In recent weeks, the chair of SFE met with HMCTS to convey concerns of the new probate rules and pushed for change but these pleas fell on “deaf ears.”

In working with their members, SFE warned the current delays are about to be made worse as solicitors are forced to use an online system which isn’t fit for purpose yet.

Michael Culver, SFEs chair and partner at Bolt Burdon Solicitors, commented on the issues he has seen first-hand: “We used to be able to get a Grant of Probate in two weeks, now it’s more like twelve and can be much longer. These delays are already causing a huge detrimental impact on people at an already difficult time.

“It’s our fear those delays are about to get even worse, because the new online system is about to become mandatory but isn’t fit for purpose yet.

“In time, I have no doubt it will be brilliant. But before it becomes compulsory it’s vital the problems with it are solved.

“There are times where it just doesn’t work even for the simplest of applications. There are lots of glitches, barriers, and whole sections that aren’t relevant or force you to make choices that aren’t right for your client. Many Grants of Probate then end up being issued with errors, further adding to the delays.

“We have real concerns about how further delays will impact our older and vulnerable clients at a distressing time when dealing with the death of a loved one.”

While the new online probate system will become mandatory from late November, legal professionals are already being encouraged to use it.

Unfortunately, a recent survey of SFE members revealed current probate infrastructure is not up to scratch, with the problems ultimately falling on grieving families.

The survey revealed the following insight:

57 percent are experiencing delays with grants of probate of 9-20 weeks.Eight percent had faced delays longer than 32 weeksIn terms of impact on families, 93 percent said those they support suffered extra distressSome 57 percent said they saw a clients’ house sale fall through due to the delays and 31 percent said it led to unpaid inheritance tax or additional interest and penalties being imposed

When examining comments from the survey, it was also evident that the experts within the field are not optimistic about the current set up.

The following comments were taken from the survey results:

“This is a total shambles. There are more mistakes than ever on grants and it’s impossible to speak to anyone who actually knows anything about probate.”“This online system has been rushed through before it was ready.”“It’s absolutely not fit for purpose. Clients do not understand why they are being made to wait so long and there is no plausible excuse. It is frankly unacceptable.”“Chaotic; I’m all for progress, but this is just going backwards.”“The system is only suitable for the most straight forward estates. As lawyers, we tend to deal with more complex estates.”“Changes that were supposed to streamline, improve and create a more cost-effective service actually are more costly, have created a worse system that takes longer and disadvantages the public.”“The lack of accountability is astounding. The whole process is great in theory but desperately needs some work to bring it up to the standard expected.”