HM Courts and Tribunals Service (HMCTS) has been working with huge backlogs in processing probate applications since the start of the COVID-19 pandemic, resulting in significant delays in issuing Grants of Probate. New data recently released by HMCTS confirms that those delays are getting worse.
HMCTS’s Management Information Report covering January 2022 to January 2023 states that 26,464 applications for Grants of Probate were received in January 2023 whilst only 19,834 Grants of Probate were issued.
85% of the applications were submitted online and the average wait time between submission and issue of the Grant for online applications was 8.4 weeks. If an online application is stopped by HMCTS, then the average wait time between submission and issue more than doubled to 18.6 weeks, or more than four months. It is worth noting as well that online applications for probate can be made only if certain requirements have been met.
The position is even bleaker for applications made by post. The average wait time for all postal applications was 20.3 weeks and for those applications that were stopped, the average wait time rose to 26.3 weeks, which is a more than half a year.
What do the delays mean?
Ultimately, delays in issuing Grants of Probate can have an adverse effect on the amount of inheritance beneficiaries receive from a deceased’s estate – the longer the delay the more it could cost you.
- How delays can impact Inheritance Tax
Inheritance Tax, if payable, falls due to be paid to HMRC six months after the end of the month of death, so if someone passes away in January, any Inheritance Tax falls due on 31 July. If the Inheritance Tax is not paid by the six-month deadline, then interest will begin to accrue on the outstanding sum until it is paid.
The interest accrual is a concern particularly in estates where most of the assets are illiquid and/or the Grant of Probate is required to redeem the assets and subsequently pay any remaining tax. The more interest that accrues, the less that will be available to distribute to the beneficiaries.
- How delays can impact value of assets
A potentially more severe consequence of the delays is the delays for Executors and Administrators on being able to deal with any estate assets where the value of the asset is subject to change, such as property and investments.
A recent article in the Telegraph highlights how delays with issuing Grants of Probate are responsible for some property sales falling through, as buyers are often not willing to put up with the long wait times for Grants of Probate to be issued before the sale can proceed.
HMCTS is only willing to expedite probate applications for property sales where the sale was already progressing at the date of death. Therefore, where property sales are agreed after death, which is in most cases, buyers are left to decide either to go elsewhere or look to negotiate a lower purchase price in the face of delays.
As for investments, the increased market volatility arising from the conflict in Ukraine raises the concern that the value of a deceased’s investment portfolio could significantly decrease whilst the Executors wait for the Grant to be issued before they can sell the investments.
What can be done?
Unfortunately, the onus is on the Government to come up with a way to get through the backlog and speed up the current processes.
For applicants, once someone has passed away there is little that can be done to avoid the delays when applying for their Grant of Probate.
However, seeking appropriate legal assistance with the estate administration will help to ensure that all the information needed for the application is collated as quickly as possible and that the application is completed and submitted correctly.
Additionally, if you are worried about your own estate and how the delays may affect its administration, the best way to mitigate any potential delays is to ensure that you have a Will in place. This will give your Executors the best chance to be able to submit an online application, avoiding the further delays that come with paper applications.
If you need any advice or assistance with administering an estate or putting your own Will in place then please feel free to contact our Wills, Trusts and Probate Team on 01603 610911 or via email at firstname.lastname@example.org.
Note: the content of this article is for general information only and does not constitute legal advice. Specific legal advice should be taken in any specific circumstance.