For quite some time the South Australian government has been talking about making changes to the filing fees for applications for grants of probate and grants of letters of administration so that estates of different sizes pay different filing fees.
The changes to those fees have today been gazetted and are to take effect on 28 February 2016.
Many in the profession were hopeful that the plans would be watered down, but as it is the overall effect of these changes is a severe and unfair increase for most estates that require grants.
The old fee was $1,114 for an estate of any size, whereas the new fees will be based on the combined value of the assets:-
- $750 where the assets are $200,000 or less (down by about 33%)
- $1,500 for assets between $200,000 and $500,000 (up by about 35%)
- $2,000 for assets between $500,000 and $1 million (up by about 80%)
- $3,000 for assets above $1 million (up by 170%)
Comparatively few estates will see a reduction in the fee.
A significant unfairness created by these increases is that the fees are to be charged on the basis of the asset value only, without any reduction for mortgages or other liabilities.
So someone who owns only a house worth $510,000 with a mortgage of $430,000 (net equity $80,000) will pay the same elevated fee as someone with $950,000 in investments, which is more than twice as much as someone with $80,000 in the bank would pay.
It is normal in SA that the assets and liabilities of a deceased estate have to be disclosed as part of an application for a grant, and it is not infrequently necessary to make disclosure to the court of additional assets that were missed when the application was originally made. The new regulations also introduce a power for the Registrar of the court to make an adjustment for the fee that had been paid, if it turns out that a different fee would have applied if the assets to had been disclosed properly the first time around.