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Valuing An Estate

If you are the executor of a person’s will, then it falls to you to value the estate of the deceased. This is the first job that must be done once a grant of probate has been received, as it has an impact on everything else that follows (for example, if a will states that a certain percentage of an estate must go to charity, or to an individual, if it important to understand exactly what figure that is). The sum also needs to be known so that any Inheritance Tax that is due is calculated correctly. It is an important – and potentially daunting – job.

Included within the valuation are: property, money, assets, and possessions. Property can be both buildings and land. Money is not just money that is in the deceased’s wallet, or in their home. It includes all current and savings accounts (domestic as well as foreign), building society accounts, stock and shares, pensions (if they result in a lump sum payment after death), trusts, and life insurances. Assets include businesses, or business partnerships. Possessions are items such as vehicles, furniture, jewellery, fixtures and fittings, books, and so on.

Gifts are also something that need to be delved into, as some of them will be subject to taxes. Did the testator give away an asset but they kept an interest in it (such as a house that they gave away but continued to live in it without paying any rent)? These are known as ‘gifts with reservation of benefit’ and are definitely included within the value of the estate. It is important to understand what happened, and when, as each case is different. Some gifts are exempt from being included in the valuation of an estate, and these include (but are not limited to): gifts to spouses of civil partners, maintenance payments, gifts that were given more than seven years before the testator’s death, and wedding gifts.

If you’re not sure what you should or shouldn’t include when valuing an estate, and would like some help in this sometimes problematic area, then don’t hesitate to contact us for impartial, expert advice.

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