Probate backlog leaves heirs out of pocket

A surge in probate applications made before a planned rise in fees last year, coupled with a move to digitalise the application process has caused a significant probate backlog.

Accountancy firm Moore Kingston Smith has found that probate applications are taking three times longer than they were pre-coronavirus, leaving heirs and other dependants facing long delays before receiving any assets.

Covid-19 has made it harder to clear this backlog because many probate registry offices have been not working at full capacity due to staff absences and remote working practices.  

Moore Kingston Smith believe the delay has the potential to cause significant financial hardship for some dependants. 

Moore Kingston Smith partner Lynne Rowland said: “Probate delays put a lot of heirs in a really tough spot financially. Dependents are having to choose between funding the costs of another home now or delay any payments and pick up a bigger bill further down the line due to any interest.

“Executors can be held personally liable for any payments made from an estate before the grant of probate is obtained, so they are often understandably reluctant to transfer funds to a beneficiary without the grant being in place. One month of that is difficult but three months or longer is unsustainable for many beneficiaries.”

Probate delays mean dependants are having to deal with the stress of making payments such as mortgage repayments or energy bills for the deceased out of their own pockets.

If dependants decide to delay these payments until an estate has been administered then they may have to pay interest or late payment penalties on them.  

The accountancy firms claims that resource constraints are resulting in mistakes being made by probate registries. Common mistakes include getting the name of an executor and the value of an estate wrong on a grant. If these details are wrong, the estate cannot be distributed.   

The move to digitalise the process has helped, with the applicant now responsible for inputting the information onto the system, resulting in fewer errors. However, this is limited to those that have access to the online system. 

Rowland adds: “Due to delays, in some cases banks are allowing executors to access cash from the deceased’s bank account without a grant of probate in order to pay bills. In some cases, banks are transferring amounts up to £100,000.”

“While this shows flexibility on behalf of the banks, the executors are personally liable to the estate for these funds and in accepting the money they could expose themselves to significant personal financial liabilities. This situation could be avoided if the process for obtaining probate was more efficient.”