If you are named as an executor in a will, one of your first duties will be to get the deceased person’s estate valued to allow you to make a probate application, and before you can pass the estate onto the intended beneficiaries.

But what are the challenges involved in this task and why is it a good idea to engage a solicitor to help you? Catherine Causey, Head of Private Client Law at WBW Solicitors in Newton Abbot, explains.

An estate’s probate valuation includes everything the deceased person owned when they died, less any debts and liabilities. This would include: property; stocks and shares; pensions; cash in bank accounts; personal possessions; and business assets.

You cannot obtain a grant of probate without an estate valuation, which is required to assess how much inheritance and capital gains tax might need to be paid, how much debt needs to be paid off, and how much the beneficiaries will receive from what is left.

Because inheritance tax will need to be paid on anything above the tax-free threshold, it is important to value the sum total of the deceased person’s assets accurately. If the valuation is too high you could pay too much tax, if it is too low you may face stiff penalties from HMRC.

You should note that if inheritance tax is likely to be due on the estate, this needs to be paid by the end of the sixth month after the person died, even if you have not finished valuing the estate.

To come to an accurate valuation, you will need to compile a list of all the deceased person’s assets, liabilities, and any gifts they made during the seven years before they died as these gifts will now be liable to inheritance tax.

To build your list, go through the deceased person’s paperwork, talk to family members and friends and any professionals they used, such as their solicitor, IFA or accountant. Also, write to all organisations they had dealings with, enclosing a copy of the death certificate, asking for the value of the asset or debt at the date of death.

Organisations and people who would have details of their assets include:

  • their employer;
  • banks and building societies;
  • life insurance and pension providers;
  • share or investment companies;
  • trust companies;
  • NS&I (National Savings and Investments) which offers Premium Bonds and other savings and investments; and
  • family and friends who may have received a gift.

You will need to value some of the assets in different ways.

  • Property will need to be valued by a professional. You could ask an estate agent, but your best bet is to engage a chartered surveyor who is used to valuing property for HMRC purposes.
  • For most household items worth less than £500 you can estimate the price according to current market value, but expensive objects such as antiques will need a professional valuation.
  • The value of shares can usually be taken as those published on the day of death.
  • The value of cars can be assessed by comparing them to similar models on the market.
  • You can discover if any surplus payments are due from banks, energy companies, etc, by writing to them directly and asking for an up-to-date balance, including any accrued interest.

To get an idea of the debts owed, you should contact their:

  • mortgage lender;
  • loan or credit agencies;
  • utility providers;
  • local council;
  • residential care home or care-providers if applicable; and
  • the funeral home or those who arranged the funeral.

How a solicitor can help

Valuing a deceased person’s estate can seem like a daunting prospect and the repercussions of getting it wrong can be severe, with challenges possible from both HMRC and beneficiaries.

If you feel you cannot get through this process alone, our team of expert wills and trusts solicitors are here to help. They can assist you in compiling a list of assets and debts, contacting family and friends and any organisation who the deceased person may owe to or from whom money needs to be collected.

They will help you engage the professionals needed to accurately value the various assets, reach final settlements with creditors, and negotiate with HMRC, while ensuring that all paperwork is submitted and payments made at the right time. They will also be on hand once a final valuation is made to ensure that all the beneficiaries receive their rightful inheritance.

For more information on wills, probate, or any other private client issue, contact  Catherine Causey at WBW Solicitors in Newton Abbot on 01626 202402 or email catherinecausey@wbw.co.uk.

WBW has offices in Torquay, Paignton, Newton Abbot, Exeter, Bovey Tracey,  Exmouth,  Honiton,  Sidmouth,  Launceston,  Axminster, Chard and Seaton.

This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.