On 20 June 2024, the Victorian Government announced the Department of Justice and Community Safety (the department) would lead a review of fees charged for services provided by the Victorian Probate Office within the Supreme Court.
As part of its review, the department sought community feedback in which Rigby Cooke Lawyers’ Wills, Trusts & Estates group provided a submission expressing its concerns on the proposed fee structures and increase in probate fees.
Purpose and objectives of the review
The review of probate fees aims to achieve several objectives. These include enhancing the financial sustainability of both the Supreme Court and the Probate Office, as well as improving access to justice and the overall quality of court services.
The proposed fee changes apply to the following probate services:
- applications for a grant of representation
- online advertisements
- small estate optional services.
Proposed fee options
The Victorian Government has proposed three ways that fees can be changed:
- Balanced – fees and charges that account for the Probate Office service delivery and achieve an ideal balance between the objectives. This option introduces $0 fees when people apply for probate for small estates.
- Uplift – fees would be structured to prioritise the overall fiscal sustainability of the Supreme Court.
- Flat increase – fees would be increased by 350% to prioritise cost recovery and fiscal sustainability of the Supreme Court.
The balanced option was determined as the preferred option in the Regulatory Impact Statement as it meets the review objective of improving the financial sustainability of the Supreme Court without restricting access to justice.
Community consultation
The department sought community feedback on the proposed fee structures through a survey or written submissions, which closed Friday 19 July.
The submissions are expected to be published in August, with a Statement of Reasons slated for release in September 2024. Following this, both the statement of reasons and a recommendation will be forwarded to the Attorney General for a decision on the proposed changes.
Our submission
Rigby Cooke Lawyers’ Wills, Trusts & Estates group provided a submission to the department in response to the proposed increases in fees in the Probate Jurisdiction outlining our concerns.
Some of these concerns include:
Increase in fees potentially reduce access to justice
Increasing fees beyond Probate Registry costs to cover the wider costs of the Supreme Court may lead to more executors and beneficiaries needing to borrow money merely to lodge a probate application. If executors and/or beneficiaries are unable to fund the filing fees, this could result in many estates left in limbo for extended periods, reducing access to justice. Properties are likely to remain in the name of the deceased person for years following death, bank accounts will remain frozen or in some cases, executors may elect not to notify the bank of the death so as to continue to access the funds or to allow direct debits to continue. Estates will simply remain unadministered.
If probate or letters of administration are not applied for, individuals left out of a Will or individuals who do not receive an interest on intestacy, cannot challenge the Will or the intestacy outcome for provision, resulting in the vulnerable and those experiencing financial hardship having no access to justice.
Increased financial burden
Executors and beneficiaries, who may have limited personal wealth despite the estate’s significant assets, face an initial personal substantial financial burden due to the proposed exorbitant filing fees. Banks currently only release funds from a deceased’s account without a grant of probate for funeral expenses, causing executors to personally bear the financial burden of the probate fees. In most cases they will be unable to be reimbursed from the estate until after probate has been granted and the banks release funds. This can take between six and ten weeks after a grant of probate, depending on the banks involved.
The proposed increase in fees also don’t account for the many estates that are asset-rich but cash-poor, with the family home the main asset. The lack of liquid funds could force the sale of the family home to cover the filing fees, potentially leaving a surviving spouse or a vulnerable child without a home.
Fee structure
Below is a comparison of the current and proposed fee structure. The documentation presented by the department arguably fails to successfully justify the proposed increases in the filing fees for a grant of representation, merely arguing that the increased fees will fund the whole of the Supreme Court and not just the Probate Registry reducing the burden on the average taxpayer.
| Current gross value | Current fees | Proposed gross value | Proposed fees |
| Less than the value of a small estate | Nil | ||
| $250,000 or less | $66.80 | Equal to small estate value but less than $250,000 | $261.30 |
| $500,000 or less | $66.80 | $250,000 to $500,000 | $514.40 |
| $500,000 but less than $1 million | $357.80 | $500,000 but less than $1 million | $1,028.80 |
| $1 million but less than $2 million | $667.80 | $1 million but less than $2.5 million | $2,563.80 |
| $2 million but less than $3 million | $1,462.80 | $2.5 million but less than $5 million | $7,185.20 |
| Over $3 million | $2,257.80 | $5 million or more | $15,407.40 |
The proposed fees are based on the gross value of the estate, disadvantaging high-leveraged estates. Estates with significant liabilities will pay the same fees as those with fewer liabilities, creating inequality and unfairness. For example, if a deceased owned assets with a gross value of $6 million, with liabilities of $4 million, the probate application fee will be $15,407.40, however the beneficiaries will only benefit from a net estate valued at $2 million. In this situation the fee differential is an additional $12,843.60. A $20 million estate will pay the same $15,407.40.
The proposed fees should be based on the net estate value for a fairer outcome.
The fee structure disproportionately affects small and middle to upper-middle-value estates. Estates valued over $10 million are treated the same as those $5 million and over, which unfairly places a greater financial burden on those lower valued estates.
Additionally, in circumstances where thresholds in other jurisdictions increase, the proposed changes decrease the value of what is considered a small estate; decreasing this from $500,000 to $250,000. Estates valued under $500,000 should not face increased fees.
Wealth planning
The increased fees will inevitably see testators move assets out of their personal name and into discretionary trusts in an attempt to avoid high filing fees, reducing the estate’s value. This impacts the vulnerable and disadvantaged, who may find it harder to challenge estates for adequate provision.
Conclusion
In our view, the proposed increase in fees appear arbitrary and do not directly correlate to the cost of services provided by the Probate Registry.
Contact us
If you would like to discuss how the potential increase in probate fees could affect you or your estate, please contact a member of our Wills, Trusts & Estates team.
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