The Victorian Government has announced a significant increase of filing fees charged by the Victorian Probate Office within the Supreme Court.
The new fee structure particularly impacts larger estates, with those valued $7 million or more now facing a fee of $16,803, up from $2,318.90. One positive change is for the small estates under $250,000, which will no longer incur any fees.
These increased fees will take effect on 18 November 2024.
Gross value of the Victorian estate | Current fee | New fee |
$250,000 or less | $66.80 | NO FEE |
$250,000 but less than $500,000 | $66.80 | $514.40 |
$500,000 but less than $ 1 million | $357.80 | $1,028.80 |
$1 million but less than $2 million | $667.80 | $2,400.50 |
$2 million but less than $3 million | $1,463.80 | $4,801.00 |
$3 million but less than $5 million | $2,257.80 | $7,185.20 |
$5 million but less than $7 million | $2,257.80 | $12,002.60 |
$7 million or more | $2,257.80 | $16,803.60 |
Impact on estate planning and administration
The increased filing fees may bring several challenges:
Increased financial burden: executors, who are initially personally responsible for these fees, might be discouraged from taking on the role, leading to potential delays and complications in estate administration. While the deceased’s bank will make funds available for a funeral invoice, the same is not true of probate filing fees.
Law firm hesitation: law firms might feel hesitant to carry these fees upfront as disbursements, making it more difficult for poorly funded individuals to get started in the process.
Unadministered estates: executors might opt to leave estates unadministered due to the high costs, particularly where there is property but no cash. This can lead to properties not being transferred as intended, resulting in unintended tax consequences and complications in future applications. For instance, if a property is not transferred after a parent’s death and remains unadministered until the other parent dies, the beneficiaries might face higher taxes and extra difficulties due to lost documentation or missing wills.
Estate planning tactics: the new fees may prompt individuals to reconsider how their assets are structured, potentially leading to unintended consequences if not carefully planned. Some individuals might resort to unconventional methods to avoid the high probate fees, such as transferring assets in ways that could complicate the estate further or would not actually reflect their wishes.
Potential strategies to minimise the estate and reduce filing fees
Since the probate filing fee is based on the value of the estate in Victoria, one approach to minimising the fees is to reduce the value of one’s estate. There are a number of ways this could be done, and whether any of these strategies are appropriate for you will depend upon your circumstances. You should obtain legal and financial advice before making any decisions.
- Lifetime transfers: gifting property or assets during your lifetime can reduce the value of your estate and avoid probate fees.
- Family trusts: establishing a family trust to hold your assets removes them from your estate. Maintaining a family trust can be costly and succession of the trust presents its own complications, so whether they are appropriate for you will depend on your circumstances and your assets.
- Joint ownership: holding property jointly with rights of survivorship can ensure that the property passes directly to the co-owner without the need for probate.
- Beneficiary nominations: ensure that all your superannuation, insurance policies, and other similar investments have designated beneficiaries to transfer assets directly without probate.
Conclusion
The increase in probate filing fees in Victoria underscores the importance of comprehensive estate planning. While the fee hike aims to improve the efficiency of the probate system and provide funding for the Supreme Court, it also imposes a significant financial burden on those navigating this process.
Our Wills & Estates Team understand the implications of these fee increases and would be glad to discuss how these changes may impact you or your family. Please call us on 9063 0300 or send us an email to discuss with one of our lawyers, or click here to make an appointment.
Author
