The Government has really put the Wills and probate sector through the ringer in 2019 with potential regulatory change evaporating at the last minute and technological and structural innovations collapsing an established system.
At the start of the year, HM Courts and Tribunals System (HMCTS) made a number of announcements which were intent on shaking up the sector.
Desperate to widen the access to legal services, HMCTS looked at ways to digitise their processes. This included offering a service for completing divorce and probate applications online.
Many heralded this as the brave new world with those professionals chosen to take part in the online trial finding a system reducing timescales and improving efficiency.
However, when HMCTS restructured and centralised the probate registry service, carnage ensued as technological innovations resulted in complete communication breakdowns and extensive time delays stretching beyond 13 weeks in some cases.
Practitioners, politicians, Lords and the charity sector were also frustrated by the infamous probate fees Statutory Instrument which stubbornly made its way through Parliament this year.
Despite widespread disapproval and criticism from organisations like the Law Society, House of Lords, and Labour Party, it was the prorogation of Parliament and a cabinet reshuffle which finally kicked the probate increases into the proverbial gutter along with considerable levels of disruption.
Finally, Smee & Ford were relieved of their Wills Notification duties, only to be reinstated on a temporary basis. Whilst long-term provision is still up in the air, the charitable sector hope for a smooth transition to avoid losses in legacy income.
Today’s Wills and Probate asked just what have been the most challenging events in 2019 and how have they impacted the sector?
Ian Bond, Director and Head of Trusts and Estates at Talbots Law, commented on the probate delays:
“’Progress is being made’ and delays in issuing new applications are ‘coming down’.
“They are at around 4 weeks for issuing new applications for grants and are on track to get this down to 2 weeks by the end of the year. A few weeks later than planned, but still it is progress. They are under the 5 week target they had set themselves. Professional and lay applications are taking roughly the same time to process.
“HMCTS are working on a contact strategy for applications that are currently stopped in the system to get those cleared. Key to this is commutation from HMCTS to the applicants. The contact centre in Birmingham can now deal with all enquiries and so everyone is encouraged to call or email them with queries as opposed to local registries. The intention from HMCTS is that from December they will be staffed from 8am to 8pm Monday to Friday and Saturday mornings 8am until 12 noon.
“Other developments include the fact that they hope to launch the online probate application in Welsh language in the new year and to be able to issue bilingual English / Welsh new style grants as well. As the Law Society we represent solicitors in England and Wales and so this has been very important to us to return to a position where the Welsh language has parity with English. If a person chooses to make their Will in Welsh then the process should allow their grant of probate to be also issued in Welsh.
“HMCTS want to encourage as many practitioners to sign up and use the online facilities. Since the launch of the online system for practitioners over 450 firms have signed up and created accounts. They want more firms to sign up.”
Adam Sym, Probate Executive at Stephensons Solicitors, commented:
“The two biggest challenges to the sector this year have been the delays to grant applications, created by the implementation of new systems by HMCTS and the proposed fee increases for those same applications. Both combined have put considerable strain on practitioners in this sector. As practitioners, we often absorb our clients’ frustrations and stress and for many clients, the finalisation of an estate is an important step in dealing with the loss of a loved one. This year’s delays have therefore understandably caused a lot of upset for many families.
“I am hopeful that next year we will begin to see the benefits of the new systems implemented by HMCTS, in order to make an emotional process easier for all of those involved.”
Emily Deane, technical counsel at STEP, said:
“STEP is concerned about the imminent changes to HMRC’s trust registration service and its potential impact on the trust sector.
“The Fifth Anti-Money Laundering Directive (5AMLD) when implemented will expand the register’s accessibility provisions. In the UK, the directive states that records will be accessible by law enforcement agencies, any UK obliged entity that enters into a business relationship with a trust, and anyone who can show that they have a ‘legitimate interest’ in the data. It is currently unclear how legitimate interest applications will be dealt with by the government since it is not defined within 5AMLD.
“STEP hopes that the government will require strong evidence of illegality and/or wrongdoing that clearly implicates the trust concerned before agreeing to consider a legitimate interest application. There are many people who seek to obtain confidential information about individuals and families for purposes other than the exposure of illegality or wrongdoing. Practitioners will also be faced with more demanding reporting requirements, with a much wider range of trusts needing to be reported than was previously the case and should ensure they are aware of the impending changes.”
Charlotte Ponder, Legal Director at Countrywide Tax and Trust Corporation, commented:
“The greatest challenge we saw in 2019 (and expect to continue into 2020) is the continuing reluctance of the private client sector to adopt the use of technology.
“To work in a paperless office makes your processes much faster, which in turn saves money. Staff have a pleasant environment to work in, and clients have a much better impression of your business (queries can be answered quickly when the file is available at the touch of a button).
“Client expectations are only going in one direction thanks to the ‘Amazon’ effect of instant delivery, and we all have to work smarter to meet and exceed them. They are also much more cost conscious and will not pay for inefficiency.
“With the new standards and regulations that have just come into effect, I expect that the challenge will continue into 2020 as the level of competition in the sector continues to increase.”
Eleanor Evans, Partner for Trusts and Estates Administration at Hugh James, added:
“2019 has been a challenging year for the Wills and probate sector. Following the announcement in November 2018 that the government was, in April 2019, to increase probate fees from a flat fee of £155 for solicitors or £215 for lay applicants, to a sliding scale of between £250 and £6,000, the probate registries were faced with a huge influx of probate applications, with applicants scrambling to get their applications in before the fees increased.
“At around the same time, the process to digitalise the probate service commenced, and it was announced that the probate registries were to be re-structured, with local registries closing and the service being centralised into Birmingham by 2020.
“This created a perfect storm which resulted in substantial delays in grants of probate being issued; a service that had previously taken two weeks, began to take as long as eight to fifteen weeks. The impact of these delays was far reaching, with beneficiaries and estate creditors having to wait months longer for payment, sales of estate properties potentially falling through, and interest mounting up on outstanding inheritance tax payments.
“Charities, in particular, were adversely affected, as their much-needed legacy income was delayed. Charities also were faced with the prospect of a significant reduction in legacy income, as the government refused to exempt charitable legacies from the probate fees hike.
“Following much lobbying by professional bodies such as STEP, Solicitors for the Elderly, the Institute of Legacy Management and the Law Society, the proposed probate fee increases were cancelled in October 2019.
“Unfortunately, the sector is still feeling the impact of the delays, although we are gradually seeing timescales begin to improve. The centralisation of the probate registries into Birmingham has also begun, and it remains to be seen whether the service will continue to run smoothly as this process continues.”
Rob Cope, Director of Remember A Charity, further added:
“You could describe 2019 as the perfect storm when it comes to probate. HMCTS changed its systems just ahead of the planned probate fee hike, which meant that record numbers of applications were being submitted. The collective impact of that was a big backlog of Wills waiting to pass through the system.
“Bearing in mind that gifts in Wills generate billions of pounds of vital funding for good causes each year, the probate delays have taken their toll on charities and their frontline services. Although the backlog has reduced, our fear is that it still won’t be completely cleared before the end of the year.
“On a positive note, it’s certainly led to closer collaboration across the charity, legal sectors and government, as we work together to ensure the impact of the delays are fully understood, and that all parties are kept up-to-date with the latest progress.”
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