Probate Delays, Digital Assets and Inheritance Tax Risks
Hidden digital assets and mounting interest on inheritance tax bills are creating a costly double risk for families dealing with estates following the death of a loved one, as probate delays continue to impact thousands across England and Wales, adding further stress and financial pressure.
Probate delays are continuing to affect families across England and Wales
Recent figures from the Ministry of Justice (MoJ) show that more than 2,000 probate applications in England and Wales took over a year to be granted by the Ministry in the 12 months to April 2025. While the MoJ says many applications are now being processed by them more quickly, a significant backlog remains, and complex estates can still face lengthy delays.
Government guidance says the application should take up to 16 weeks, but data shows 203 cases had taken the MoJ between 21 and 23 months to complete in 2024-25, up from 88 in 2020-2021, and 9,480 cases took more than six months to clear the Ministry in 2024-25. A grant of probate is required before executors can finalise a deceased person’s estate, including accessing bank accounts or selling property held in their sole name. Until this is issued, assets are effectively frozen.
How probate delays can increase inheritance tax bills
Delays can have serious financial consequences. Inheritance tax is usually due within six months of death, after which interest begins to accrue, currently at 7.75 per cent. This means that even where delays are outside the control of executors, estates can face mounting costs.
There are ways executors can take the initiative if they face delays on their probate application. Banks will release funds for tax payments directly to HMRC, so an estimate of inheritance tax can be paid on account, though this is of limited help if the estate is largely made up of non-cash assets such as property.
Hidden digital assets are creating new risks for estates
Alongside, legal experts warn that the growing complexity of modern estates - particularly the rise in digital assets - may further complicate the process if not properly planned for. Digital assets can include anything from online bank accounts and investment platforms to cryptocurrency, email accounts, cloud storage, photographs, subscriptions and social media profiles. While some may hold financial value, others carry significant sentimental importance. However, unlike physical assets, digital accounts can be difficult to identify and access if no record exists.
Many people simply don't think about their digital footprint when writing a will. If executors don't know an account exists it may never be dealt with, meaning money or memories could be lost. Equally, if they know it exists but can't access it, this can cause delays at a time when the estate needs to be administered efficiently to avoid potential penalties. When you consider that late payment of a £250,000 tax liability could cost almost £20,000 in penalty interest over a 12-month period, it's really worth keeping track of assets so executors are well informed.
The importance of access details and secure records
A key issue is that access to many digital assets depends on login details or security keys. This is particularly relevant for cryptocurrency, where losing access credentials can mean the asset is permanently inaccessible.
Experts recommend keeping an up-to-date inventory of digital assets, alongside clear instructions on how they should be handled, stored securely and with executors made aware of where to find it. Even the most mundane matters can cause complications, utility accounts, online shopping profiles and subscription services may continue to incur charges until they are identified and closed. Care may also be needed before closing all accounts, as devices such as phones and laptops may hold important documents or information needed to administer the estate.
Social media accounts can also present challenges, with families needing to decide whether to close or memorialise profiles in line with the deceased’s wishes. Establishing legacy contacts with platforms in advance, as part of estate planning, can help families overcome some problems in dealing with service providers to access a loved ones’ digital assets. More broadly, simplifying financial affairs during your lifetime - for example by consolidating accounts and keeping clear records - can help reduce the administrative burden on those dealing with your estate.
Why estate planning now needs to include digital assets
With further changes on the horizon, including personal pension pots being brought into the scope of inheritance tax, estates are set to become even more complex in future.
Taking steps now to ensure a will fully reflects both physical and digital assets could help executors navigate the probate process more efficiently, minimise delays and reduce the risk of unnecessary costs at an already difficult time.
Speak to our Wills and Probate Solicitors if you need assistance.