In recent developments, the Victorian government’s decision to increase probate fees as of 18 November 2024, has stirred significant debate among legal professionals and the public. The new changes to the probate fee structure will see a significant increase in the amount of money that grieving families have to pay when a loved one dies, to obtain a grant of probate of their estate.
What are Probate Fees?
Probate is the legal process by which a deceased person’s will is validated by the Court in order that a legal personal representative of the estate, also known as an Executor, can administer the estate. Probate fees are administrative court fees that are paid to the Court when a person applies for a grant of representation.
Higher Probate Fees and Their Impact on Executors
The increased probate fees are expected to cause a financial strain on the Executors, as the probate fees, funeral costs, as well as, the initial part of the Executors’ legal costs, do generally need come out of the Executors’ out of pocket, until such time as probate has been granted in favour of the Executors and they have access to reimburse such funds from the estates.
Under the changes, the probate fee for those estates valued between $1 million and $2 million, will cost $2,400 as of 18 November 2024, noting that in Victoria, the median value of an estate requiring a grant of representation is worth between $1 million and $2 million.
Below is a table setting out the probate fees that will be payable, depending on the estate value, effective from 18 November 2024:
| Estate Value | Fee |
|---|---|
| $0 - 249,999.99 | $0 |
| $250,000 - $499,999.99 | $514.40 |
| $500,000 - $999,999.99 | $1,028.80 |
| $1,000,000 - $1,999,999.99 | $2,400.50 |
| $2,000,000 - $2,999,999.00 | $4,801.00 |
| $3,000,000 - $4,999,999.99 | $7,185.20 |
| $5,000,000 - $6,999,999.99 | $12,002.60 |
| $7,000,000.00 + | $16,803.60 |
Source: Supreme Court Probate Office.
One thing to note is that the probate fees are calculated on the basis of the gross value of the Victorian assets comprising the estate and that if the estate includes interstate or overseas assets, the value of these assets is not taken into account for the purposes of the calculation of the probate fees. Also, assets held in a family trust or in a superannuation fund, do not generally form part of the estate. Further, generally, if the total value of the accounts held in a financial institution is under $50,000 and there is no solely held real estate, refund of an accommodation bond or shares in publicly listed companies, probate may not be required depending on the requirements of those financial institutions that hold the estate’s assets.
Conclusion
The recent increases in probate fees in Victoria represent a significant challenge for both Executors and law firms. Executors, who are already dealing with the emotional and financial challenges of estate administration, are now faced with an added burden that may make the probate process even more costly. Further, legal professionals may need to be more equipped with an understanding of the payment options for those Executors who struggle to pay for probate fees and legal costs upfront, by offering legal fee loans and deferred fee payment structures.
These changes could potentially lead to probate avoidance as Executors may have limited personal wealth to pay the new probate fees. Further, the increased fees may encourage testators to adopt more sophisticated estate planning strategies to reduce the estate’s value which will, in turn, affect those vulnerable people’s ability to challenge such estates for further provision.
Please contact our office to discuss how the changes in the probate fees might affect you and your estate.
