Charities set for £300m boost as probate backlog shrinks, say legacy experts

29 Jul 2022 News

Legacy experts have estimated that charities could receive an extra £300m in legacy income as the probate service tackles a backlog over the next two years.

Membership body the Institute for Legacy Management (ILM) told Civil Society News that there are approximately 25,000 more outstanding applications than usual, just under 10% of the 260,000 applications HM Courts & Tribunals Service (HMCTS) processes every year.

The excess backlog goes back to 2019 and was driven by many factors, including Covid-related administrative delays. 

HMCTS has “assured” ILM that it intends to “return the number of outstanding applications to the level they were in March 2019”. 

But Remember A Charity said that a spike in probate applications at the start of this year meant probate teams’ workloads remained heavy.

Meanwhile, 2021 was a strong year for legacy income. Recently published data shows that HMCTS processed 273,421 applications that year, a level last seen in 2015. 

An additional £300m for the sector

Matthew Lagden, chief executive officer of ILM, said that before the delays started in 2019, HMCTS would usually have a backlog of 18,000 applications at any given time. 

If the current backlog of 43,000 applications was brought down to this level, it would generate an extra £300m for the sector, ILM estimated.

ILM’s estimate is based on the 260,000 applications that HMCTS processes each year generating £3.4bn of legacy income.

James Stebbings, chair of ILM and head of legacy income at Macmillan Cancer Support, said the probate service had already reduced the number of outstanding applications for probate to pre-pandemic levels, but that he hoped they would cut the current backlog further.

“Their hard work greatly contributed to making 2021 a record year for charitable legacy income as some of the delayed legacy income came through,” he said.

“We hope that 2022 and 2023 will also be great years for legacy income as they have assured us that they intend to return the number of outstanding applications to the level they were in March 2019 when the probate delays began.

“We would expect an additional sum of up to £300m of extremely welcome income to come through to charities when they achieve this goal.”

Spike in probate applications

Lucinda Frostick, director of Remember A Charity, said that the situation at the probate service has been improving but remains complex nevertheless. 

“Legacy income seems to be moving more quickly through the pipeline and that’s vital, particularly now, with so many charities battling rising costs,” she said.

“But a spike in probate applications in the first quarter of this year means that probate teams are still dealing with a heavy workstream.

“What’s really good news for many of the charities we work with is that there’s been a marked reduction in ‘stops’ – those estates which get stuck in the system, often waiting on paperwork or inheritance tax documentation.

“The drop in stopped estates is even more pronounced in larger estates facing inheritance tax, and this could well free up a considerable amount of donated income.” 

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