When someone has died, it will be necessary to calculate the total value of their estate, and this needs to be done fairly promptly – so it can be helpful to ensure your personal paperwork filing is up to date, clearly labelled and easy to find.
The valuation will need to be provided to the Probate Court before probate will be granted, and the value of the estate will determine whether any inheritance tax (IHT) will need to be paid to HMRC.
After adding up the value of all the assets, then deducting the value of any debts, it is necessary to take into account the value of any taxable lifetime gifts, tax reliefs and exemptions. Each person’s circumstances are very unique, particularly if they have extensive investments and business interests, so it is important to seek advice from a specialist private client lawyer.
The executor(s) named in the will, or anyone who has the right to be formally appointed to deal with the estate in the absence of a valid will, will be responsible for valuing the estate.
The starting point is to collect details of all assets so that a valuation of all that was owned can be established. The value of any debts at the date of death will also need to be taken into consideration. The valuation of assets will need to be determined as at the date of death, and the types of assets that need to be valued include:
- bank accounts, investments, and premium bonds;
- shares;
- land and property;
- jewellery, antiques, paintings etc;
- digital assets; and
- lifetime gifts.
While banks and building societies will usually provide a value at the date of death, in other circumstances you may need to engage a professional to provide a valuation for probate. For example, shares in a family business can be complex to value and collectibles, such as stamps, or artwork may need specialist input.
Debts must also be taken into account when valuing the estate, such as a mortgage, small business loan, credit card debts, taxes or care fees and deducted from the gross value of assets to provide a net estate value.
Letting your executors know where you keep the details of your assets, share certificates, and important paperwork etc will make their job easier at a difficult time. This includes thinking about digital assets and telling them where they can find passwords to access any online accounts and photography or social media accounts.
For further information on any aspect of obtaining probate, please contact Dee Benians in the private client team on 01435 890101 or email deebenians@hugheslaw.co.uk.
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.