Bereaved Victorian families will be hit with massive increases to probate fees, with the state government announcing hikes of up to 650% to process wills.
The acting attorney general, Enver Erdogan, on Monday announced that the supreme court’s probate fees would move from a fixed rate to a tiered system, in what has been described as a “death tax by stealth” by the opposition.
Under the changes, which would come into effect on 18 November, families of deceased estates with a value of between $250,000 and $500,000 would have to pay $514.40, up from $68.60 – a 650% increase.
Probate fees for estates valued between $500,000 and $1m would increase 180%, from $367.40 to $1,028.80, while estates between $1m and $2m would increase 250%, from $685.90 to $2,400.50.
Estates valued between $2m and $3m would have a new $4,801 fee imposed, up from $1,502.40.
Three new tiers for multimillion-dollar estates would also be introduced: $7,185.20 for those valued at $3m to $5m, $12,002.60 for $5m to $7m and $16,803.60 for $7m or more. With probate fees previously capped at $2,318.90, it represents up to a 625% increase in fees.
The government said large estates of more than $3m make up less than 6% of all applications but take up most of the court’s time, due to disputes over will validity, unclear property rights or perceived inequities among beneficiaries.
Erdogan said current fees were inadequate to cover the costs of these types of lengthy disputes.
“It’s why we’re making the system fairer by abolishing probate fees for small estates and keeping medium sized estate fees cheaper than New South Wales and South Australia’s fees,” he said.
“For the very small percentage of Victorians dealing with multimillion dollar estates, the fees will be lifted to cover the level of administration and dispute resolution these complex applications often require in court.
“These changes will ensure that the most an estate will pay in probate fees is 0.24% of an estate’s value – keeping it fair for everyone who is navigating our courts.”
Under the changes, deceased estates of less than $250,000 will no longer be required to pay fees. The government said 20% of people who applied for probate fell into this category.
The shadow attorney general, Michael O’Brien, criticised the government for announcing the changes on the eve of the Melbourne Cup public holiday.
“This is effectively the imposition of a death tax by stealth,” he said. “To have massive increases in the amount of money that grieving families have to pay when a loved one dies to get probate can’t be justified.”
He said the probate office would now rake in more in fees than it cost to operate.
The changes come after a review of the probate office by the Department of Justice and Community Safety, which was subject to community consultation but had a low participation rate.
Of the 124 participants surveyed during consultation, 94% were not supportive of an increase to probate fees, with the majority citing concerns about affordability, cost-of-living pressures, limited access to justice and recovery of costs. Victoria’s peak legal body, the Law Institute of Victoria, was among critics.
In its statement of reasons published online on Monday, the department acknowledged there could be “challenges” for executors and beneficiaries, who may have limited personal wealth – despite an estate’s significant assets – to pay the new fees.
It suggested they could take out a loan, use a credit card or find a law firm that may cover costs and recover them from the estate later.
On concerns about the possibility of elder abuse, the department said it was “illogical in most instances to pressure someone to transfer their assets before they passed to avoid proposed probate fees” but was acknowledged “still a risk”.
