4 Easy Steps to Value an Estate

When someone passes away, if they left a Will they will have nominated an executor (if they didn’t leave a Will the next of kin will be able to deal with the estate). It is the executor’s job to sort out the assets and liabilities of the deceased. In a nutshell, this means getting in the assets and paying/discharging the liabilities.

But before you can do this you will need to value the estate. This means valuing any money, property, and possessions belonging to the person who has passed away. This valuation will be used to determine if inheritance tax needs to be paid or not. In this article, we will be outlining the four steps you need to take to value an estate.

Step One

Get the details.

To work out the value of the estate, you will need details of all assets e.g. bank accounts, savings accounts, property, etc. You will need details of all debts e.g. utility bills, loan repayments, mortgages, etc. and all significant gifts they gave away in the last seven years before they died. This means you will have to write to the asset holders and ask them for the value of the asset at the date of death. You are trying to ascertain the value of the estate at the date the deceased person passed away. This is an important point as some assets will increase in value, e.g., a bank account gaining interest.

Money in a joint bank account or owned jointly will automatically pass to the other owner or owners, half of the money will need to be added into the calculation for the estate.

Tip: To value non-monetary assets (cars, antiques, etc.) it is recommended that you use a professional valuer if the asset is worth more than £500.00. If the deceased left a lot of belongings such as furniture, jewellery, etc. you can hire a professional valuer who will value everything at once and provide you with a succinct report.

Tip: You will need to get three valuations of any houses from three different estate agents and then use the average to give you a figure for the property.

Step Two

Total up the assets and the debts. Add all of the assets together to reach the total asset figure and total up all of the debts to reach the total debt figure.

To find the value of the estate, you will need to subtract the debts from the assets. Take the total debt figure away from the total asset figure to be left with the final value of the estate.

Assets – Debts = Estate value.

If the estate value is over £325,000.00 then usually you will need to pay inheritance tax. For more information on when and how to pay inheritance tax.

Step Three

Regardless of whether or not you need to pay inheritance tax if you need a grant of representation you should fill out the right inheritance tax form. This needs to be completed to obtain the Grant.

What to Do If You’ve Been Left a Gift Under the Will But the Solicitors Wont Speak to You

If you believe that you may have been left a gift under a Will it is only natural to be curious as to what that gift is, or when you can expect to receive it. Your first port of call should be the executor, usually a family member or friend of the deceased. If you are on good terms they may tell you what was contained in the Will, although they might not be able to tell you when you can expect to receive this.

WHY THE LAYMAN EXECUTOR MIGHT NOT KNOW HOW LONG IT WILL TAKE FOR YOU TO GET YOUR GIFT.

They might not know this information just yet because distributing gifts to the beneficiaries is usually the last job of the executor. Before they distribute the gifts, they must calculate the value of the estate, see if there is any tax due, paid that tax if necessary, pay the debtors (the people owed money by the deceased or the estate), then and only then can they distribute the gifts. If they distribute the gifts to early and it turns out they should not have distributed the gift then they can find themselves personally liable.

TALKING TO SOLICITORS

If you have no luck discussing the matter with the executor for the estate, or the executor cannot answer your questions then you may be tempted to contact the firm of solicitors dealing with the estate on behalf of the executor.

There is nothing wrong with you attempting to contact the solicitors. It is perfectly OK for you to call the solicitor firm and ask to speak with the fee earner dealing with the estate with regards to your gift under the Will.

That being said, you may not get the response you desire, or any response at all. The solicitor may refuse to speak with you. Do not take this personally, it is not the solicitor being deliberately awkward, or unkind, they are not trying to cause you distress or dismissing your query. There are strict rules in place that the solicitor must follow or they could face severe consequences.

The solicitor firm must follow the rules of confidentiality set out by the Law Society. They have been instructed by the executors and not you, this means the executors are their client and they owe the executors a duty of confidentiality. This means they cannot discuss the estate with you unless the estate has gone to probate, or it is time to deliver the gift or the executors give them permission.

It may seem odd that the solicitor cannot speak to you, especially if you know that you are named in the Will as a beneficiary. This is because, as said above the solicitor is bound by certain rules, one of which is that the solicitor can only talk to the executors about the Will, until the Will goes to Probate and becomes a public document.

I understand that this can be frustrating but losing your cool with a fee earner or their secretary will not help, all losing your temper will achieve is your calls may be blocked. As said above the fee earner is not deliberately trying to make your life harder or unpleasant, they are bound by strict rules and breaching those rules can have far reaching consequences.

IS THERE A WAY AROUND THIS ISSUE

Yes, it is possible for you and the solicitor and the executor to get around this issue.

The best course of action is to speak to the executor and ask them to give the solicitor permission to speak with you. Once the solicitor receives that permission from their client they can talk to you. They might ask for the permission in writing to protect themselves, but once it is received you can discuss the estate and your potential gift with the solicitor without issue.

If your relationship with the executor is such that they might not give the solicitor permission to talk to you then you cannot force them to. It might seem unfair and unfortunate but if the executor refused to tell the solicitor it is OK to speak with you then there is nothing you can do about it.

But keep in mind that when the solicitors apply for Probate the Will becomes a public document and you will be able to view it in its entirety then.

You may just have to be patient.

CONCLUSION

In conclusion, if you want to see the Will, or discuss the process or progress of the Estate then you will either need to talk to the executor directly, wait until the Will becomes a public document or ask the executors to contact the solicitor firm and request that the firm discuss matters with you.

Need more information? Check out the link below!

5 Easy Steps To Obtain a Grant of Probate

When disposing of an estate, you will sometimes need to obtain a document called a Grant of Probate, or, depending on the situation Letters of Administration. If needed, this document is an official statement to asset and debt holders, informing them that you are the executor in charge of distributing the assets and paying off the debts. It allows them to communicate with you, safe in the knowledge that they are resolving the estate with the designated representative.

You will need to apply for, and obtain a Grant if the value of the deceased’s estate exceeds £5,000.00 or if there is property, such as a house, to dispose of. Banks, building societies and other asset holders can, at their discretion, ask to see a Grant regardless of the value of the asset they hold.

That being said, you are unlikely to need a grant if the estate is passing to a surviving spouse, or if the assets are held in joint names and are passing to the joint owner.

Once you have established whether or not you need to obtain a Grant, you will need to follow the below steps to successfully obtain the Grant.

Step One

Your first step will be to work out the value of the estate. In the simplest terms, you will do this by adding together the estate’s assets and subtracting the estate’s debts.

The asset holders will inform you of the value of each of the assets at the time of death. You need to enter these figures into the Inheritance Tax form, and this will calculate the value of the estate.

You must do this even if the Estate is below the Inheritance Tax Threshold.

Step Two

Complete an Inheritance Tax form either IHT205 or IHT400.

To know which form you need to fill out you need to understand the differences between the forms. Form IHT205 is the form that you need to fill out if there is no inheritance tax to be paid, either because the estate is too low in value or because the estate is an exempted estate.

The IHT400 is the form that is filled out when there is inheritance tax to be paid. However, there will be some situations where there is no inheritance tax to be paid, and the IHT400 will still be the form you need to fill out so you need to be careful and assess the estate in detail. if you are unsure then start filling in IHT205 and it will guide you to form IHT400 if it is needed.

If you think that there is no inheritance tax due on the estate then you should start filling out IHT205, you may soon find however that you will need to change to form IHT400.

Step Three

Complete a probatePA1 application form.

To complete this form, you will need to know the basic details of the person who has died, e.g.: their first name & surname, date of birth, date of death, and marital status. You will also need to know some more specific information e.g.: did the deceased own any assets under another name, was the deceased adopted.

You will have to fill in questions about the Will if one exists. As well as any information on any foreign held assets e.g.: did the deceased own a holiday home abroad.

Section five of this form discusses the relatives of the deceased. Section six is a section where you provide your details.

Section seven is where you provide details of any inheritance tax owed by the estate. You can get these figures from the inheritance tax forms completed at Step Two.

Section eight applies to those who are applying on behalf of someone who has been nominated as an executor but has lost capacity. You will need to provide details of the person you are applying on behalf of.

Section nine is a helpful checklist that allows you to make sure that you have completed all of the forms and enclosed all of the necessary documents. Following this checklist means that your application is far more likely to be accepted.

Step Four

Swear an oath. You can obtain an oath from the probate registry or draft one yourself, although if you choose this, then you need to be careful as an oath will only be valid in certain formats.

Swearing the oath will not take long, you will need to swear it in front of a solicitor or a local probate office, and this will cost approximately £5.00.

Step Five

Send your application to the probate registry.

You should include:

The probate application form PA1,
The Inheritance Tax form, an official copy of the death certificate,
The Oath,
The original will and three copies – and any codicils,
The application fee of £215 – a cheque made payable to HM Courts and Tribunals Service (there’s no fee if the estate is under £5,000.00).

You can pay for extra copies of the grant (50p each) – this means you can send them to different organisations at the same time.

Once you have received the Grant of Probate, you can continue with gathering in the assets and paying the deceased’s debts.

You should now have a basic understanding of hen you might need a Grant of Probate as well as what steps to follow to obtain a Gra