How to find out the value of a deceased person's estate
When someone dies, as well as coping with all the emotions you’ll be feeling, you’ll also have to take care of the deceased’s person’s will and you may even be tasked with dealing with their estate after they pass away.
Finding out the valuation of the estate of someone who’s died can often be a long and drawn-out process, but it’s often imperative to carry out a house valuation for probate to determine who inherits the house, and who is liable for what when it comes to a deceased’s person’s estate.
Before you apply for probate, you will need to work out the probate value and furniture valuation, amongst other things. If you’ve never had any experience valuing a house for probate reasons, then our guide below is full of tips and advice on how to report the estate value, how to value personal property for probate, as well as the difference between probate value and market value.
What is a probate valuation?
A probate valuation helps to determine the value of someone’s assets once they’ve passed away. It considers all the assets of value that belonged to the deceased and then removes any outstanding debt to work out how much inheritance tax the estate owes.
Currently, all assets worth £325,000 or less aren’t subject to inheritance tax, but anything above that figure is subject to 40% tax.
How to work out the value of someone's estate
Valuing someone’s estate after they’ve died can take up to nine months to complete and sometimes even longer in some cases.
To work out the value of someone’s estate, you’ll need to consider the value of any and all assets, the value of any gifts given and any outstanding debts that the deceased had.
Valuing personal possessions for probate
Personal possessions are made up of all the assets of the deceased that they owned at the time of their passing. These include things like any properties they owned, whether they had any savings if they had any shares or investments, their personal belongings such as physical items and any private pensions they might have had.
When it comes to working out the estimated value of personal possessions and belongings of the deceased, it’s usually best to start with high-value items such as cars, jewellery and designer items.
HMRC recommends getting any possessions that are thought to be worth more than £500 valued by a professional so you can get a much more accurate estimate of their worth, rather than just guessing yourself.
Other belongings such as the deceased’s clothes, shoes, kitchen equipment and low-value furniture, for example, can usually be valued based on approximations and estimations from similar second-hand items that you can find online.
What house contents need valuing for probate?
Household items such as books, furniture and paintings.
- Cars, caravans, boats, motorhomes.
- Any property, other buildings or land, including if they had any property abroad.
- Stocks, shares and any other investments they had.
- Money and savings in their bank account/s, ISAs, buildings societies etc.
- Any money they’re owed such as refunds from household bills or outstanding wages still to be paid.
If you’re valuing any assets that are jointly owned by two people, you will need to work out the actual value of the asset, then divide it by two and take off 10%.
Valuing gifts for probate
Gifts that the deceased gave in the seven years before they died may be liable for inheritance tax, so you must include these when working out the valuation of their estate. You can have an annual ‘gift allowance’ of up to £3,000 which isn’t subject to inheritance tax, but anything over this amount will be liable for tax.
Gifts that aren’t subject to inheritance tax include:
- Gifts valued at less than £250
- Wedding gifts that are made before the wedding, must be less than £5,000 if given to a child and less than £2,500 if given to a grandchild
You might like: How to avoid inheritance tax
Can estate agents do probate valuations?
Estate against are usually in charge of property valuations and they can usually be done for free by using a local estate agent. However, if the total of the estate is expected to be more than the inheritance tax-free threshold of £325,000, then it’s recommended that you hire a Chartered Surveyor to carry out the probate valuation of the property.
How much does a probate valuation cost?
Whether you get an estate agent to carry out the probate valuation or a solicitor or chartered surveyor, you can expect to have to pay for their service.
It depends on the person who carries out the valuation, but you can usually expect to be charged between 1% and 5% of the total value of the estate and assets.
How do you find someone's assets after death?
In some cases, finding a person’s assets after they’ve died can be harder than it seems. While hopefully household possessions such as clothes, books, furniture and even cars should be easy to locate, the deceased might have hidden assets somewhere that you will need to find in order to work out the value of the deceased person’s estate.
There are several ways you can do this:
- Pay for a professional to carry out a search to try and find the lost assets. You can hire a professional to locate lost bonds, money, stocks, shares and more.
- Go through the deceased’s paperwork with a fine-tooth comb to see if they have any record of any hidden assets that you might not have been aware of. You can check for things like any properties they were paying for, as well as any income they were receiving from an external source that you didn’t know about.
- Consider whether the deceased had any connections to any other countries. If so, you might want to check whether they had property in another country or if they have a bank account that’s located in another country.