Probate Valuation

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Probate valuation guide

property

After the death of a loved one, going through the probate process is necessary for most cases. For an executor to be able to administer the property of the departed accordingly, they’ll need to acquire a grant of probate or a letter of administration where applicable. Although the probate process might be stressful, going through this probate valuation guide will be of much help.

Estate valuation for probate will be important in determining if the property falls within the tax threshold. These are the properties that qualify to be taxed. If the total assets figure is worth more than £350K, then there shall be a tax obligation to be fulfilled hence the need to go through the probate procedure.   

In United Kingdom, probate takes between 9-12 months. This duration is not standard as there are several factors that can influence the probate process. Some of the factors include the following:

  • The simplicity of reviewing the estate. Larger or more complicated estates take a longer period.
  • Whether there’s a will or not. With a will, the duration will be shorter since no time will be wasted gathering information. 
  • Conflict among the beneficiaries. If any disagreements may arise, this might result in court proceedings and in return a longer probate period.
  • Duration of estate valuation for probate. This is one of the important reasons why you need an efficient and reliable valuer. The longer it takes for your property to be valued, the longer the process will be. 

From these circumstances discussed above, we can see that probate can take anywhere between months to a couple of years. It’s also important to note that accurate probate valuation also plays an important role in determining the probate duration. 

As part of the process, you’ll have to make sure that there’s accuracy in the probate property valuation for tax purposes. Your probate report needs to be accurate and factual before submitting it to the registry of probate.

As much as you aren’t required to give a valuations report immediately after the death of a loved one, there are time limits to be considered:

  • If the estate falls within the inheritance tax band, then the forms for probate need to be completed and returned to the HMRC within one year for inheritance tax purposes.
  • However, the time limit for paying the inheritance tax is within six months after the demise of a loved one. The payment can be made even before the final valuation is done.

Whoever you choose to value your property also matters. Will you go for an estate agent or a RICS qualified surveyor? The latter is recommended because their valuation is professional and precise compared to what’s given by an agent.

Agents can give you free valuation or the market appraisal of the estate, but this might get you in trouble with the HMRC. This is because most of the estate agents tend to inflate the prices by giving you the asking price instead of the open market value.   

man writing probate will

How do you value possession for probate?

In order for the hm revenue and customs to determine the correct inheritance tax to be paid, the probate valuation done needs to be accurate. Once you hire a probate valuer, they’ll need to value the entire estate based on the open market value. This will include all the property, personal possessions, goods, and chattels of the deceased.

Whether you’re in Clapham, Finchley or Richmond, you still get professional valuation services. The chartered surveyors are RICS qualified hence the assurance of getting an accurate valuation of your house contents. 

After visiting and valuing the contents of your property, you shall get a full report 72 hours after the visit from the valuer. 

Depending on whether you’ll be in need of the specialist package or the standard package, the charges will vary. For the standard package, the price starts from £300 +VAT. The prices for the specialist package are available upon request. 

With the specialist probate valuation services, you don’t need to worry about probate valuation of your valuable possessions. Be it jewellry, precious metals, fine art, antiques, rare books vehicles, and valuable gems among other things, you get an expert valuer to make sure everything is correctly valued. 

Once this figure is gotten, you can now add it to the total value of the rest of the property. With precise figures, you won’t be having any trouble with the HMRC.

Probate value vs market value:

During probate valuation, situations may arise where a property is either overvalued or undervalued. Undervaluing property in order to evade any tax obligations can be seen as a fraud, which is a serious offence.

Although some disparities may occur between the probate value and the market value, the most important thing is to ensure that the probate property valuation figure is precise for inheritance tax purposes. 

What happens if a house sells more than probate value?

If a house is sold more than the amount it was valued for, the HMRC might try to increase the tax owed. This can happen when the sale is made, and it’s usually after probate is granted. Remember, it’s only after being granted probate that an executor/administrator can distribute the deceased’s estate accordingly or do anything with it like selling, perhaps.

If there’s such an increase in the tax owed it can be negotiated with the district valuer. However, these negotiations can be stressful and time-consuming.

England property

What happens if a house sells less than probate value?

In cases where you might have overvalued the house during a valuation, and it’s sold for less, then you can always seek a refund from the HMRC. This would be for the tax overpayment made.

But before making any refund claims, it’s advisable to consult with your solicitor first. It’s also crucial to note that the tax refund claims can be made if the property was sold within four years of a loved one’s demise.

With this simple guide on probate valuation, going about your London probate valuation process should be a lot simpler. With our valuation services, you get an independent, professional, qualified, and experienced valuer to appraise your house contents, chattels, and personal possessions for probate purposes.

Whether you have valuable house contents, you still get quality and efficient professional services when it comes to valuation for probate. Feel free to reach out should you wish to get more information on our probate valuation services or any advice or enquiries regarding house valuations.

What happens after probate is granted?

England property

What does it mean when probate is granted? Once probate is complete, this means that you or the solicitor have the legal right to administer the deceased’s estate(property, money and possessions). If the person left a will, you’ll get a grant of probate, if there was no will left then a letter of administration is what is issued. 

A personal representative is also known as an executor(if there’s a will) or administrator(if there’s no will). He /she is the one who undertakes the responsibility of administering the estate. Understanding what is a probate is important as it will help you understand how to go about it once probate has been granted. 

But before that, you will need probate valuation of property so that you can submit the report to the probate registry. After probate granted now what? This is a question that many people tend to ask. Once this is done, the personal representative of the estate can now gather the deceased’s assets ready to be cashed, transferred or sold.

The first thing that should be done after receiving the grant of probate or letter of administration is to inform all interested parties. Copies of the grant of probate should be sent to all liability(if any) and asset holders with a request to release funds. You should also place a statutory advertisement on the gazette and local press for creditors and other claimants to come forward.

Below are some of the things to be done during the estate administration process after being grant probate:

  • Closing bank accounts and cashing life insurance or pension policies. Where a large sum of money is to be paid to the estate, a grant of probate is needed so that the funds can be released. In both cases, this happens when the sum held by the institution is more than the threshold they have.
    In some cases, where the amount held does not exceed the limit, then the amount can be withdrawn without needing any probate.
  • Selling property. If need be, the executor will now have the authority to sell or transfer any property that was owned by the deceased.

The executor can now administer the estate once all the money has been received into the estate accounts. It is at this point that any outstanding debts or taxes should be cleared. Below are some of the things that should be done once the money has been received:

  • Clear any funeral expenses. If there were any outstanding funeral fees, then this is the time to clear them. 
  • Pay up any taxes that are due. This is for any inheritance tax or outstanding income tax.
  • Pay off any creditors. This includes any loans, mortgages and outstanding debts.
  • Distribute the estate among the beneficiaries. Once the debts have been paid, the executor can now distribute what is left in the estate among the beneficiaries. If there’s a will, then the estate will be distributed according to the requirements in the will. In cases where there’s no will after someone dies, then the beneficiaries are determined through the rules of intestacy.  

If it’s a situation where you need any help with the probate process, probate solicitors can help make the work easier. They can always help out with the estate administration process if it seems hard. If you encounter any problems, you can seek advice from probate advisors so that they can guide you through the process. 

Bank of England

How long do banks take to release money after probate has been granted?

Every bank has a threshold which determines whether there will be a need to have any probate or letter of administration before withdrawing any money from the deceased’s account. If the amount of money does not exceed the threshold limit, then one only needs a death certificate to make the withdrawals.

If the amount exceeds the threshold, then you will need to have a grant of probate or letter of administration to access the deceased’s account. Once the bank has received all the necessary documents, then the money will be released within 10 to 15 working days. 

The bank or any financial institution for that matter should be informed of the persons’ demise as soon as possible. This is so that they can freeze the accounts of the departed immediately. The executor or administrator has the responsibility to notify the bank.

Once the bank has been given an original or certified copy of the certificate of death, they can stop any future payments from being made by freezing the deceased’s account. Considering the fact that each bank has a different threshold, it’s always good to determine this so that you can know if you’ll need a grant of probate or not.

The requirements to either release money or close bank accounts are different for every bank. You will be told the documents needed depending on the bank. Some of the documentation you’ll need to submit include the following:

  • Certificate of death
  • A duplicate of the will(if there’s one)
  • The executors’ identification

If it happens that the bank doesn’t need probate to be granted, then it might ask the executor to sign an indemnity. This will protect the bank if it turns out the money was paid off to the wrong person.

In some cases, the bank can release the money to pay any inheritance tax or expenses of the funeral if there’s a tax inheritance bill or funeral bill. Once the bank receives the required documents, they shall be able to release the funds.

If the details on the documents submitted are incorrect or have issues, then the bank will certainly take a longer period to release the money other than the usual 10 to 15 working days.

How long does it take to distribute the estate once probate is granted?

property

In most cases, the complexity of the estate determines the duration it’s going to take to distribute the estate among the beneficiaries. For a small estate where there’s no property, it might take around three months for the beneficiaries to get their inheritance. 

Usually, it takes around 6 to 9 months to distribute the estate once probate is granted, but all this is highly dependent on how complex the estate is. For some, it can take up to years before the probate process can be completed, thus delaying the property and estate administration.

It takes around 3 to 6 weeks to collect some of the straightforward assets such as money in the bank. In cases where there are assets like shares, property and other assets, or property abroad, the duration may be longer than anticipated.

Issues that may delay the distribution of an estate once probate is granted. 

Below are some hurdles that can pop up and in turn, result in a delay in the estate administration:

  • Selling the shares. This can be a time-consuming process since it involves a lot of paperwork. It can even take a longer period if the shares certificate is lost and a search has to be conducted for it to be replaced. 
  • Selling property. This can also lead to a delay in the time it takes to distribute an estate since it takes time to find a buyer.
  • Statutory advertisements. Considering the minimum duration set for creditors to come forth is two months, it might lead to a significant delay in the estate administration.
  • Investigations by the Department for Work and Pension(DWP). If they decide to investigate whether they have overpaid the benefits to the deceased, it might lead to an additional six to nine months to the probate process.
  • Claiming the life insurance policies. There are often many questions asked on the circumstances surrounding the death before determining who to pay.
  • Locating estranged beneficiaries. It might take time tracking a missing beneficiary hence delaying the distribution process.
  • Anyone contesting the will. This might prolong the whole process since all issues have to be settled.

Once all this has been sorted and all the debts and taxes have been cleared, then the beneficiaries can get their share of the estate. 

Discussed above is an important explanation of what happens after probate is granted. Knowing what happens during and after the probate process is essential as it will guide your decision-making process. You will also learn the importance of valuing personal property for probate at the correct figure in case of any tax obligations.
At Clearance Solutions, we know and understand the importance of valuing your chattels and house contents on the correct basis. We provide you with an accurate valuation of house contents to combine with the total value for the rest of the estate. Rest assured you won’t be getting into any trouble with the HMRC either. Our services are hassle-free and reliable, making your probate process easy.

How long does probate take in the UK

man writing probate will

What is a probate? This is the legal right to oversee the affairs of the deceased person before the estate is distributed according to the will. At times, probate matters may be complicated and present unforeseen difficulties. The duration of the probate process depends on the size and complexity of the estate of the deceased person. This can take anywhere between a few months to a couple of years.

Did the deceased have property elsewhere other than in the UK? Does the family know of the demise? Did the deceased have a will? Are there any family members that are contesting the contents of the will? These are just a number of things that have a significant impact on the duration of the probate process.

In most cases where there are few factors affecting the process, probate and the administration of the estate usually takes between 9 to 12 months. In situations where the deceased had a small and uncomplicated estate, probate takes a shorter period. 

As an executor or probate solicitor, the first and most crucial step before applying for probate is reporting the estimated value of the deceased’s estate to the probate registry. From there, they will then issue you with a grant of probate or letter of administration if the deceased did not have a will.

At Clearance Solutions, we offer professional services when it comes to house valuation for probate. Our services involve an experienced, qualified, independent valuer visiting your property to appraise its contents. The valuer then returns with the full report within 72 hours of the visit.

For house contents that are worth a significant value, we always have our expert evaluators carry out a detailed survey so that they can provide accurate valuation of the property. From jewellery to valuable possessions, our specialists have the capability and expertise of valuing such items.

Apart from being accurate and efficient, our services which focus on valuing personal possessions for probate, are HMRC compliant. Getting the right value for the property is crucial since you will be able to determine the amount of inheritance tax that is due(if any).

If you value the estate too high, you could end up paying more tax than required. Value it too low and it could be a case of fraud. Clearance solutions will help you get that accurate number by providing an expert valuation for house contents to combine with the rest of the estate’s total value.

How long does probate take to be granted?

Once you submit the documents showing the total value of the estate to the HMRC, they will confirm the amount of inheritance tax that is due(if any). It is always advisable to deal with the taxes before applying for any grant of representation. 

A grant of representation is a legal document that proves your legal right to sort out the estate of the deceased. With the document, you will be able to access the deceased’s bank accounts, sort out any outstanding debts, settle any inheritance tax and make sure the estate is given to the right people.

The two types of grants are:

  • Grant of probate
  • Letter of administration.

A grant of probate is applied if the deceased left a will. In cases where there’s no will, you apply for a letter of administration. The probate process is different in Scotland and Northern Ireland. For a place like Scotland, a certificate of confirmation will be needed in both cases. It is always advisable to consult with your local probate office if you need any clarity.

There is no timeline to apply for probate although there’s a timeline for dealing with inheritance tax. It should be dealt with within 6 months of death. 

After the probate application, it takes around 3 to 5 weeks for the probate registry to grant probate or issue letters of administration. As long as the application was not done properly and the estate was not easy to review, it is bound to take a longer period.

writing a will

How long does probate take if there’s a will?

The probate duration is much shorter when there’s a will involved. This is because it clearly states who should get what, thus saving on loads of time that could have been used gathering all that information. It might take longer if any dispute regarding the will may arise between the beneficiaries.

If the deceased did not leave a will, then you can apply for a letter of administration. In other cases, the law takes on the responsibility of administering the estate if there are no beneficiaries or there is no will due to an untimely death. The law will be the one to determine who the beneficiaries should be through the rules of intestacy.

How long does probate take after swearing oath?

Making sure that the details on the report showing the value of the estate are factual is very crucial. Once submitted, you must personally go to the probate registry or a local probate office to sign an oath swearing that the information in your application is correct.

After swearing the oath, you can receive the probate or letters of administration within 10 days of accepting the oath. If you swore your oath at a local solicitor’s office, the probate or letters will be issued within 10 days once the probate registry has received your oath.  

With probate granted, you can now have access to the deceased assets. This will include bank account, insurance and property deeds. You will then be able to pay off any outstanding debts, inheritance tax and divide the remaining estate among the beneficiaries. This might take you between 6 to 9 months.

When is probate required?

Probate is needed in most cases where property or land is involved. Some of these scenarios are listed below. 

  • If the amount they had in their bank account exceeds the stipulated threshold set by the bank. This means that the bank cannot release the money without a grant probate. The amount might vary with each bank.
  • If they owned any property as well as it’s worth.
  • If they had any stock and shares. It is important to put the minimum or maximum threshold set by the registrars into consideration as you may need probate for them to grant you access.

Circumstances where you will not need to apply for probate

As much as probate is important in administering the estate of a loved one, there are other circumstances where it is not necessary. In this case, you will need the deceased’s death certificate and your identification to gain access to the estate. Some of these situations are as listed below:

  • If the deceased had jointly owned land or property, shares or money. They’ll be automatically passed to the surviving owners.
  • If the deceased only had savings on premium bonds.
  • If the estate is insolvent. Taxes, expenses and existing debt owed by the deceased is usually paid off from the estate. This might include anything that can be converted to money, from jewellry, art and antiques collections, cars, homes and valuable belongings. 
  • If there are no shares, property or land in the estate there will be no need for probate to gain access as it will be a small estate.

From all that we’ve discussed above, we can see the importance of accurately valuing your loved ones estate. You certainly do not want to pay any additional inheritance taxes after over valuing the property. Even worse, being suspected of fraud for undervaluing the estate.

This brings about the necessity of having an efficient and reliable property valuation specialist. We offer our cost effective services where our clients can choose between the standard or specialist package(recommended for individuals with large collections of valuables).

With us, you will be able to obtain an accurate probate report in accordance with the HMRC guidelines within a reasonable timeline. If you need any valuation of the house or property itself, or any other assets like stock shares and bonds, we are always happy to recommend the professional assistance you might need.

Handling property inheritance: valuation & home clearance after someone dies

When a family member dies, you, as the inheritor of their property, will have a large job on your hands. As well as informing friends and relatives and making funeral arrangements, you will need to have the deceased’s property valued and cleared. This is a difficult task at a difficult time, and it is understandable that you may not want to deal with solicitors and the taxman or sort through your loved one’s property during this period. Unfortunately, this is all part of the process. Here is a look at what you need to do, and how you can make it easier.

Get a probate valuation of the property

If you are specified in the deceased’s will as an executor— someone who can deal with their estate—you will need to apply for a grant of probate from the probate registry. Once this has been approved, you will need to look into a probate valuation in order to ascertain exactly how much the property is worth. This will determine how much you will inherit, and whether this inheritance will be taxable or not. If the property is worth more than £325,000, you will have to pay 40% inheritance tax on this value. If you are planning on selling the property and its value increases between you acquiring it and selling it, you may also be liable for capital gains tax on the difference.

The value of the property is worked out not only from its market value, but from the probate value of the house contents (known as goods and chattels). Probate valuation involves determining the resale value of these items, as they are deemed part of the assets of the estate.

In order to get a probate valuation of the property, you will need to enlist a professional valuer. Here at Clearance Solutions we offer an expert probate valuation service. This will involve an experienced, qualified and independent valuer visiting your property to assess the the value of its contents. We will send you a report of our findings within 24 hours of this visit. For more information, visit our probate valuation service page.

Have the property cleared

House clearance after someone dies is another fundamental part of the process, as whatever you decide to do with your loved one’s home, you will need to clear the property of possessions that are no longer needed. This means you will have to sort through your loved one’s personal belongings. It will likely be an emotional process, and you may not feel like doing it straight away, but don’t worry about needing to take your time with this. Banks or lenders tend to be sympathetic to this kind of situation, and inheritance tax doesn’t have to be paid for up to 12 months. If you feel like you just can’t face it, give yourself some time and don’t feel like you should be rushed. You might also want to enlist someone who can help you through the process.

You should sort possessions into items that you want to keep, items that you want to sell or donate, and items that you want to throw away (after they have been valued). Make sure you set aside valuable possessions like jewellery, antiques and paintings and discuss with your family whether they should be sold or kept. If you and your family members can’t decide about who should keep what, set aside these objects until the end, at which point hopefully emotions have settled. It is also important that you set aside all important financial documents, including wills, bank statements, insurance forms, receipts and all other sensitive documents (some of these you might want to shred).

Once you have sorted out what you no longer want to keep, you will need to make sure that these items are disposed of. If there is an abundance of possessions that need to be cleared, it is worth getting a clearance company to do this for you. Here at Clearance Solutions, we provide a house clearance service to do just this.

Our service is cost-effective, as the resale value of each item will be taken into account of what we charge you. We can clear all types of household items, from furniture and electrical goods, to junk and bric-a-brac, and can pick it up from any location on a property. We also ensure that the service is environmentally friendly by either recycling the items we take or donating them to good causes. For more information, please visit our house clearance page.

Valuing personal property for probate – why get an independent valuation?

Chattels and house contents rarely make up a significant proportion of the value of an estate. However, they will often pose the greatest practical issues for an executor and can be subject to competing claims. For this reason, a prudent executor will want a clearly itemised and properly valued inventory.

Probate valuation must be based on the open market value at the time of death, as set out in section 160 of the Inheritance Tax Act of 1984. Any valuation which does not explicitly state the correct basis will be viewed with suspicion. Phrases such as “for probate purposes” will not give HMRC confidence that the valuer understands the legal requirements.

Consequently, an independent probate valuation service can offer expert assessment of how much house contents and chattels are worth, in a way which is fair to all parties.

Avoiding delay

A typical estate will contain a substantial number of items, all of which must be taken into account when providing a valuation for probate purposes. Someone approaching the task for the first time might have to look up hundreds of individual items to identify the few of value. In contrast, an experienced valuer will easily be able to make a correct assessment for standard items and concentrate on the unusual or valuable items.

There are other clear advantages to an independent approach in terms of risks of delay, particularly when a local tax assessor is unhappy with a chattel valuation. In these instances, the valuation will be referred to the HMRC Shares and Asset Valuation team (SAV), which typically results in a delay of between four and ten months.Where the correct basis for valuation is applied, the risk of an additional referral will be very low.

Impartial valuation

Despite generally being only a small proportion of the value of an estate, chattels are often the cause of disputes between legatees, often including the executor. Having an independent and professional valuation is one sure way of demonstrating impartiality.

Where an executor undertakes the role of valuer, there is obviously a potential conflict of interests, particularly in cases where the estate is over the inheritance tax threshold.

Valuing on the correct basis

Everyone will be aware that trade and retail values are different, but the value for probate must be based on the open market value at the time of death. All probate valuations must be shown to be on this basis, and a common form of difficulty is the use of vague terms such as “probate values” or “fair value”, which do not give tax assessors any confidence that the valuer has understood their duty.

For art and antiques valuation, past auction results are the main resource used to assess open market value. The great advantage here is that very large databases of completed sales are available, allowing close comparisons to be found for most items. Attempting to value antiques without access to subscription databases is a difficult task, with the likely outcome being a mixture of retail and wholesale prices.

For clients, there is also the considerable advantage in that prices for much of the antique furniture likely to be found in the average house are currently severely depressed at auction, so that a professional valuation may well be substantially lower than the valuation the executor would have entered by themselves.

Overpayment

Following on from the above, an amateur valuer may well err towards overvaluation and find themselves paying too much tax as a result. This can be for several reasons. Most people have objects which have been highly valued in the family, but this does not lead to a high open market value.

This is what economists call “the endowment effect”, whereby one’s own property seems more valuable to an individual purely by virtue of emotional attachment. Another reason is simply an ignorance of how low many standard household contents are valued in the secondary market. This is as true of antique furniture as it is of electrical goods.

Disparity between the value of a house and its contents

The official guidance on probate valuation states that items over £500 should be individually listed. This can lead to a misunderstanding that items under this limit are of less importance, whereas the SAV stress that all goods are taxable. Generally, cheaper goods will be lotted together at auction (often at low estimates), and the same approach can be used on a valuation form to achieve a fair price, which still takes account of all the contents.

Sometimes a very expensive house will not have contents to match. Actually this is not uncommon, but when a tax assessor makes risk assessment of a probate valuation, the overall value of the estate will be an obvious yardstick. In these situations an independent valuation will be advisable.

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