How do I establish the value of a deceased’s Estate?

Calculating the value of a deceased’s estate can seem daunting. Where do you start? What do you need to include? And what tax might be due to HMRC? At a time when you will be grief-stricken the added burden of dealing with the Probate for the deceased’s estate can be too much to handle. Knowing what needs to be done can be a steep learning curve not to mention doing it. One of the very important jobs is to calculate the value of the deceased’s estate so that all assets can be distributed as per the Will and any taxes due can be paid.

A solicitor can help with all of this, and in many situations can deal with the bulk of the task, relieving you of the burden and allowing you to be present for your family. An estate can consist of many obvious and obscure things. Here is a brief list of what you should include when calculating the value of an estate.

  • Bank Accounts and Savings Accounts – Any cash that is held in the bank and savings account(s) of the deceased will form part of the estate’s value even where the account is held jointly with someone else. Gaining access to such information will require the Executor to speak to the bank(s) in question and to have the account frozen. To do this the Executor will need to prove that the account holder is deceased (by way of presenting the Death Certificate) and that they are the appointed Executor (by way of presenting the Will).
  • Cash in Hand – Often, people might hold a ‘rainy-day’ fund by way of cash held at home. This must be included in the valuation of the estate.
  • Stocks and Shares – The value of any stocks and shares must be ascertained. Regardless of whether the stocks and shares are to be transferred or sold, their value must be known for tax purposes. Their value at date of death is important as it is this date that in theory the assets become assets of the estate and, at date of death, the value of the stocks and shares will be used in calculating any inheritance tax due.
  • Pensions – Many pensions are put into Trust or are paid out under a nomination, which means that they do not fall under the estate. If the pension is placed in trust or paid out under a nomination, then in most cases this doesn’t not need to be included in the value of the estate calculation. If, however the pension is payable to the estate then the Executor must contact the pensions company to obtain the value of the pension.
  • Life Insurance – similar to pensions, many life insurance policies are put into trust. If not, then the value ofd the life insurance must be included in the value of the estate calculations. Even where a life policy is placed in trust, in some cases its value still needs ot be included in the value of the estate.
  • Property – All property owned by the deceased will need to be valued and any monies owed (usually by way of a mortgage) deduced from the value of the property. It’s important to know that an estate agent’s valuation will not suffice. Instead, a Chartered Surveyor’s valuation will be necessary to fully appreciate the value of the property.
  • Personal Belongings of Monetary Value – When calculating the value of the estate, any high value items such as watches, artwork, jewellery, vehicles etc must be valued and included in the value of the estate. An estimated valuation for the other personal belongings also needs to be included. This is important as the value of any items that are ‘handed-down’ might result in inheritance tax being due. Note that any items that do not carry a monetary value but a sentimental value (such as family photographs or grandmas favourite chair) do not need to be included in the value of the estate.
  • Lifetime Gifts – if the deceased made any gifts in the seven years before they died, these may also need to be included in the inheritance tax calculation. Even when a gift has been made and seven years have elapsed some gifts will still need to be included in the inheritance tax calculation.

This is just a short and simple list of the assets that might form the value of the estate however each situation might return different assets to include. Ultimately, anything of monetary value must be included.

Once the value has been ascertained then any inheritance tax due must be calculated and paid to the Inland Revenue. This can be a challenging calculation and must be done correctly to ensure you do not underpay and receive an unwanted bill in the future.

Recruiting the skills and experience of a solicitor can be of huge help as the solicitor can look at any exemptions that might be applicable, thus saving you money. There is also the need to pay any tax due at this point and a solicitor can help arrange this payment from the estate.

To learn more about how we can help you with Probate please visit our dedicated Probate page on our website or please call us at any of our four Yorkshire based offices and one of our team will be very happy to help.

How do I get in touch?

Call us at any of our four offices to discuss your needs and to make an appointment.

Westbourne House,99 Lidgett Lane, Garforth, Leeds, LS25 1LJ
Tel: 0113 246 4423

25 Bank Street, Ossett, WF5 8PS
Tel: 01924 586466

Sherburn in Elmet
6 Finkle Hill, Sherburn in Elmet, Leeds, LS25 6EA
Tel: 01977 350500

Bank House, 1 Burton Street, Wakefield, WF1 2GF
Tel: 01924 290029

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