When someone dies, probate valuations will need to be carried out on their estate, and it is the executor’s duty to arrange for this to happen. Probate valuations need to be done in order to complete the application for probate; the value of the estate needs to be added to the application so that, if there is any inheritance tax due, it can be calculated. The valuation is also required for calculating capital gains tax, and to ensure that any debts are completely paid before any assets are distributed.
You may hear about the ‘gross value of the estate’ when discussing this or completing the probate application if you are the executor. All this means is the full value of the estate before any funeral expenses are taken into account, any taxes are calculated, or any debts are repaid. Probate valuations will give you the gross value of the estate, and what is left after the above have been taken out is the net value.
Probate Valuations Are Essential
The application for probate – or the letter of administration if there is no will – cannot be made until probate valuations have been carried out. Everything needs to be declared at the time of the application, and it must all be accurately valued. If there is an error that results in, for example, debts not being paid, or the wrong calculation for inheritance tax, then the executor will be personally liable. It is a legal necessity to get it right.
This means making all the enquiries possible, and conducting thorough research to ensure that probate valuations figures are correct. However, if accurate valuations can’t be obtained for whatever reason, then guidelines state a best estimate will be allowed, although this can only be the case after every other avenue has been exhausted.
If you would like information on Probate Valuations, please get in touch.