What does the 'net value of such estate does not exceed'? mean?

pixiescar

I have the grant and probate forms through from the registry and I am trying to match them up with the cheque and form that I have received from the executors.

Could anyone confirm what the 'net value of such estate does not exceed £xxx' mean? Is that the amount left from the will after all deductions have been taken?

As the money which I received does not even come close to a 3rd of the amount stated in the grant (which I obtained myself).
Any advice or help deciphering how I work it out if the amount I have is correct would be gratefully appreciated.

Thanks!

getmore4less

You need the inventory and account.

Tuesday_Tenor

OP's previous thread https://forums.moneysavingexpert.com/discussion/5154615

1) One possibility is that your cheque isn't your full inheritance, but an interim payment. What does the covering letter that came with the cheque say?

But answering your question:
2) The '£xxx' is the value that the executors estimated the estate would be worth when they applied for probate. Yes, this estimate is 'net' and so would take into account the estimate of the debts and costs as well as the estimate of the assets.

The final value of the estate could be a bit different from the estimate, if assets, debts or costs turn out to be different from those expected, e.g. if a property sells for much less (or much more) than originally expected.

HMRC would only want to know about such a difference if inheritance tax is payable anyway, or if the final value makes inheritance tax payable, when it wasn't so esimated originally. If there are no IHT implications the executors don't need to inform HMRC.

The final estate accounts from the executors should clearly explain how the final estate value has been arrived at. What are the forms sent from the solicitor with your cheque? Are they final accounts?

If the final value of the estate is very different from the estimated value at the time of probate then you should ask for an explanation.
There may be a valid one. In your situation I would be a bit concerned and suspicious too.

Savvy_Sue

pixiescar wrote: »

Could anyone confirm what the 'net value of such estate does not exceed £xxx' mean? Is that the amount left from the will after all deductions have been taken?

Yes. We're still waiting for probate and we're selling a house, so we don't have a gross figure yet, but the gross figure will be:

bank accounts
sale of shares
sale of 'stuff' at auction
sale of anything else we manage to sell
sale of house

The net figure will be the total of the above, less the total of

cost of funeral and wake
cost of obtaining probate
cost of financial advice
cost of selling house
cost of clearing house
executors' expenses: mileage, postage, stationery
utility bills between death and sale of house
cleaning, gardening, maybe decorating

Obviously the longer it takes to sell the house, the bigger the bills for utilities, cleaning, gardening etc will be.

getmore4less wrote: »

You need the inventory and account.

which I would not disagree with.

pixiescar

Tuesday_Tenor wrote: »

OP's previous thread https://forums.moneysavingexpert.com/discussion/5154615

The final estate accounts from the executors should clearly explain how the final estate value has been arrived at. What are the forms sent from the solicitor with your cheque? Are they final accounts?

If the final value of the estate is very different from the estimated value at the time of probate then you should ask for an explanation.
There may be a valid one. In your situation I would be a bit concerned and suspicious too.

The cheque is supposed to be my final inheritance amount (a 3rd of the estate as per the will).
The executor send me a letter from the solicitor that states that this is the amount left and for me to sign for it. I have asked for the final accounts and they have not been sent. Instead I have received a letter/note from one of the executors saying that they will send the estate accounts onto me at a later date as my brother is owed some money for a house debt he paid for.

I'm worried that if I sign to agree with the amount I have been given without seeing the actual estate accounts, that if I find something wrong with the accounts (if they eventually send them at all) whether I will have any grounds to contest them.
I have previous issues with the executors taking "interim payments" or "gifts" out without consulting the beneficiaries before. So I'm not very trusting of them.

I applied for the grant of probate details through public records. The net amount of the estate adds up to just under £200,000. There are 3 beneficiaries and my amount is just over £10,000. Which is in no way a 3rd of the "net amount" stated on the grant from. Is this usually wildly different after any other debts or a property is sold etc?

Mojisola

pixiescar wrote: »

The cheque is supposed to be my final inheritance amount (a 3rd of the estate as per the will).

The executor send me a letter from the solicitor that states that this is the amount left and for me to sign for it.

I have asked for the final accounts and they have not been sent. Instead I have received a letter/note from one of the executors saying that they will send the estate accounts onto me at a later date as my brother is owed some money for a house debt he paid for.

If things are finalised, how can they know what your 3rd should be?

If things are finalised, why can't they send you the accounts?

Don't sign to say to accept the cheque as a final settlement. You could write something like 'accepting an interim payment until the final accounts are presented' - what do other posters think?

Crabapple

I can't remember the exact details off the top of my head but I think there are 3 potential statements on the Oath about the value of an Estate - and those will go onto the Probate.

The net value will be after all deductions to the date of death but not including administration expenses. However, I'm pretty sure that in non-taxable estates you can declare the net value as not exceeding the IHT threshold, so in fact this might not be a good indication of the value of the Estate.

You need to see the Accounts. As suggested above, if you are presented with a receipt for the cheque then just sign to say you confirm safe receipt of the money but don't agree that it's all that you are due or anything similar.

Tuesday_Tenor

You haven’t said much about what is actually in the will.
You said in a post on your previous thread that the will says that the ‘money’ is to be split three ways between the three children of the deceased.


Do you mean that
(a) The house is to be sold and then the total estate is to be split equally between the only three beneficiaries, the children of the deceased
If this is the case then something is definitely amiss, as an estimated £200K estate shouldn’t shrink to a £30K estate.

There are other possible scenarios that you might not have understood in the will:

(b) House has been left to someone (wife, or your brother who seems less independent), and liquid assets (‘money’) are to be split between the three children. Cash assets were £30K, of which £10K is your inheritance. [House worth £170K was left to someone else who has now sold it. Nothing to do with your inheritance].

(c) Wife might have been left a ‘lifetime interest’ in the house (which in some cases can include selling and moving to another property). Your inheritance is one-third of the £30K cash (£10K) and one-third of the house when wife dies (or remarries, or whatever is specified in the will …)

Some solicitors will offer half-an-hour free advice.
As you have the will, probate documentation, cheque and latest correspondence from the executor’s solicitors, I would get another solicitor to read these and confirm your understanding of what the will actually says.
If it is indeed (a) as above, then I think it would be money well spent to get things on a formal footing, solicitor to solicitor, to get your solicitor to request the final accounts on your behalf, and question why a £200K estate seems to have shrunk to £30K as implied by latest correspondence with cheque.

RAS

pixiescar wrote: »

I'm worried that if I sign to agree with the amount I have been given without seeing the actual estate accounts, that if I find something wrong with the accounts (if they eventually send them at all) whether I will have any grounds to contest them.

It really would help to keep this to one thread.

I agree with your concern but without seeing the will it is hard to know what the estate comprises.

Have you checked whether the house was in father's name, or a joint tenancy with the step-mother, in which case the house may not be part of father's estate at all? Or only a portion would be part of the estate.

Go to the Land Registry to check the ownership (costs £3).

I know one case where the deceased transferred a house from tenants in common to a joint tenancy when he knew he was terminally ill. The will was not changed but it meant there was no house for the children to share.

Tuesday_Tenor

RAS wrote: »

Have you checked whether the house was in father's name, or a joint tenancy with the step-mother, in which case the house may not be part of father's estate at all? Or only a portion would be part of the estate.

A very valid point. The house may be fully or partly the wife's anyway. If owned as 'joint tenants' she owned all of it jointly anyway, and now owns all of it in her sole name. If she owned part of it as 'tenants in common' then that part does not form part of Dad's estate.

BUT if all or part of the house is taken out of the equation, what exactly did the estate originally estimated as £200K consist of? If more liquid assets, then OP would definitely expect more inheritance anyway.

As said previously
- you need to undestand the will completely (get a solicitor to check)
- you need to understand what the estate consists of (you need the final accountsm when available)
- I wouldn't sign anything to accept £10K as my full inheritance until I'd got to the bottom of it all.

pixiescar

Tuesday_Tenor wrote: »

You haven’t said much about what is actually in the will.
You said in a post on your previous thread that the will says that the ‘money’ is to be split three ways between the three children of the deceased.


Do you mean that
(a) The house is to be sold and then the total estate is to be split equally between the only three beneficiaries, the children of the deceased
If this is the case then something is definitely amiss, as an estimated £200K estate shouldn’t shrink to a £30K estate.

In answer to your questions:

Yes. The will is as stated in option (a). The entire estate, any accounts, monies and property (house) etc was to be liquidated and split 3 ways between myself and my two siblings.

I call her my step-mom out of some kind of respect, yet really she was just my Dad's girlfriend before he passed away. I have always been pretty untrustworthy of her as she has told quite a few "stories" in the past. Yet I haven't had any particular dealing with her as my Dad started a relationship when I was an adult and had moved away from home, so I didn't mind too much as long as he was happy.

The letter does not state that this amount is an interim payment, it says that it is the final amount due to me.

I do think it is odd that I am unable to see the estate accounts. Apparently, my brother paid a house bill and the solicitors also paid it out of the will, so my step-mom asked them to finalise the will without settling this as she was "sick of asking for bank statements" from my brother to prove what he was owed. This is the excuse for not sending me the estate accounts. I contacted the solicitors today to ask for the accounts and did not receive a return call.

I think everyone is right, I'm probably due a trip to hire my own solicitor and see what they think!