Clients affected by delays in granting probate are being forced to cash in investments and savings to bridge the gap, new research* from investment manager Downing shows.
The study with wealth managers and advisers found 76% say clients have had to cash in investments as a result of probate delays in the past two years, while 52% have had to cash in savings.
Around a third (34%) of those questioned say clients have had to borrow money to pay for probate, with more than a quarter (27%) saying probate delays have made it difficult for clients to pay Inheritance Tax (IHT) bills. A fifth (22%) of advisers say probate delays have triggered family disputes.
Probate delays are easing, according to the latest government data**, with the mean time to grant probate now around nine weeks compared with 15-and-a-half weeks a year ago. However, in cases where there are issues around sourcing documents the mean time to grant probate is 24-and-a-half weeks.
Downing’s research with advisers and wealth managers shows the problem of probate delay is widespread – a third (33%) say a lot of clients have experienced problems with probate delays in the past two years with a further 59% saying some clients have suffered problems here.
Just 6% say they have no clients who have faced probate delay issues with a further 2% not expressing a view.
Mark Dunn, Head of Retail Sales at Downing says: “It is good news that the average time to grant probate is falling and is down significantly on last year. However, in more complex cases delays are still a major concern for clients.
“That is demonstrated by the impact of delays on client finances shown in the research with advisers reporting that clients have to cash in investments and savings and even borrow money in order to cope while delays are sorted out.”
Dunn pointed out that by investing in Business Relief-qualifying businesses, IHT relief can be provided after two years if held at the date of death.
Downing Estate Planning Service, which offers this kind solution, invests predominantly in asset-backed trading businesses, in sectors such as care homes, lending to property developers and renewable energy. Its Downing AIM Estate Planning Service invests in a diversified portfolio of 25 to 40 companies that are listed on AIM, and is also offered in an ISA wrapper.
* Downing commissioned independent research company PureProfile to interview 100 UK financial advisers and wealth managers using an online methodology during November 2024.
** HMCTS management information – September 2024 – GOV.UK
Main image: jeremy-thomas-E0AHdsENmDg-unsplash
