Probate Service statistics show a sharp decline in grants of representation

 In Probate

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Probate Service statistics

Each year the Probate Service compiles a statistical summary of its main activity, the issuing of grants of representation in England & Wales. This year’s summary raises serious questions about how the estate administration market is changing for probate practitioners.

A grant of representation is a key document issued by the Court that enables the persons named in it to deal with the bank accounts and other assets of the deceased. The grant will not be issued until HM Revenue & Customs are satisfied that any inheritance tax due has been paid.

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The recently released summary for 2008 shows a significant decline in the grants issued on the basis of solicitor applications. From a high of 225,190 in 2006, solicitor applications have fallen by 19% in just two years to 181,429 in 2008. Think of this in terms of lost fees – 43,761 fewer grants extracted and estates administered nationwide by solicitors in 2008 than in 2006 – and the true scale is evident.

The expected corollary of this would be an increase in personal applications for grants from members of the public directly. However, there has been virtually no change in the number of personal applications over the last three years which were 85,937 in 2006 and 86,051 in 2008.

Deaths between 2006 and 2008 have risen merely proportionately to the growth in population – there were 502,599 deaths in 2006 and 509,090 deaths in 2008. In other words, there was no decline in deaths to explain the fall in solicitor applications and flatlining of personal applications. So how are these estates being administered? If people aren’t going to solicitors to take out a Grant, are they bothering with one at all when a family member dies?

Title Research canvassed views on these statistics amongst its client base of probate practitioners and found two themes emerged. Richard Grosberg, a partner at Nelsons solicitors, said “I suspect the fall in solicitor applications is a result of banks and other institutions becoming far more flexible about paying out money to next of kin without the need for a formal grant. Many institutions make payments of up to £20,000 without the need for a grant”.

Anthony Tahourdin, a solicitor at Herrington & Carmichael solicitors, said “There seems to be anecdotal evidence of huge resistance to paying inheritance tax which means more people avoid making any disclosure to HM Revenue & Customs. An inevitable part of this is seeking to avoid obtaining a grant.” Similar views were echoed by other practitioners.

These statistics show no sign of a trend towards DIY estate administration with a grant, only what appears to be a trend away from professionals administering estates. The commercial challenge for probate practitioners will be how to adapt to this decline in solicitor applications. The 2009 statistics, to be published in Spring 2010, will make interesting reading: will we see an unmistakable trend emerge, or will it be bucked as the marketplace continues to evolve?

A longer version of this article can be found at www.titleresearch.com where you will find more statistics from the Probate Service summary.

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