Probate valuation

clairehi

Hi all

My dad died recently and I am gathering the info needed to value his estate for probate.

Is there any point in getting a professional valuation of the house.He left everything to my mum and did not make any gifts in the last 7 years over the 3K threshold, so there should be no IHT to pay.

I have looked up actual house prices in their area and although there are no close comparators in the last 2 years (they live in a village) I can put a rough value on the house. Is the Revenue going to care as they will not be getting any tax anyway.

If I do need a "professional" valuation, will an EAs opinion be enough or do we need a surveyor?

HugoSP

Firstly, my condolances.

I speak as someone who has been executor of my mother's estate.

I assume you are handling probate yourself.

We got a solicitor to do my mother's estate. As he only got probate then passed everything to me.

When we had my mother's house valued, the local EA did it and IIRC did not charge us. Mind you he did get the job of selling it.

Have you considered using a solicitor? If not then maybe you should as there is the possibility, depending on your mother's financial status, of a deed of variation on the will that can change who inherits what.

The reason I ask is that your dad has not used his IHT threashold at all. As you say your mother gets everything, but when she goes, her estate and your inheritence will almost certainly be hit with IHT.

Whereas if you dad had used his maximum IHT threashold to leave to you and your siblings then left the remainder to your mother, then that would be around £300k less in your mother's estate and £300k tax free to you and your siblings.

The Deed of Variation can change the will within 2 years IIRC of the death. So, with your mother's agreement you could inherit from your dad now provided that leaves her enough to be comfortable with.

Then when you inherit from your mother the proportion of her estate that is hit with IHT will be much lower, as you would have already inherited the IHT limit from your dad.

We had the reverse situation. My parents were separated but not divorced. Hence my mother didn't leave anything to my dad.

We entered into a deed of variation to limit my and my siblings inheritance to a total of some £255k (IHT threashold at the time), and pass the rest onto my dad, who handed it straight back to us in equal shares. Provided he survives the gift by 7 years this too will be free of IHT.

The total fee from the solicitor for the probate application plus the advice and drawing up thg the Deed of Variation came to around £2500. He will have saved us around £100,000 in IHT provided my dad lives a few years longer.

CLAPTON

HugoSP wrote: »

Firstly, my condolances.

I speak as someone who has been executor of my mother's estate.

I assume you are handling probate yourself.

We got a solicitor to do my mother's estate. As he only got probate then passed everything to me.

When we had my mother's house valued, the local EA did it and IIRC did not charge us. Mind you he did get the job of selling it.

Have you considered using a solicitor? If not then maybe you should as there is the possibility, depending on your mother's financial status, of a deed of variation on the will that can change who inherits what.

The reason I ask is that your dad has not used his IHT threashold at all. As you say your mother gets everything, but when she goes, her estate and your inheritence will almost certainly be hit with IHT.

Whereas if you dad had used his maximum IHT threashold to leave to you and your siblings then left the remainder to your mother, then that would be around £300k less in your mother's estate and £300k tax free to you and your siblings.

The Deed of Variation can change the will within 2 years IIRC of the death. So, with your mother's agreement you could inherit from your dad now provided that leaves her enough to be comfortable with.

Then when you inherit from your mother the proportion of her estate that is hit with IHT will be much lower, as you would have already inherited the IHT limit from your dad.

We had the reverse situation. My parents were separated but not divorced. Hence my mother didn't leave anything to my dad.

We entered into a deed of variation to limit my and my siblings inheritance to a total of some £255k (IHT threashold at the time), and pass the rest onto my dad, who handed it straight back to us in equal shares. Provided he survives the gift by 7 years this too will be free of IHT.

The total fee from the solicitor for the probate application plus the advice and drawing up thg the Deed of Variation came to around £2500. He will have saved us around £100,000 in IHT provided my dad lives a few years longer.

the laws has been changed .... it was headline news for about three weeks so the serviving spouse can now use the full 600,000 of both of them.

and no, there is no need for a house valuation but I'm sure you could get a local estate agent to do it for nothing.

HugoSP

CLAPTON wrote: »

the laws has been changed .... it was headline news for about three weeks so the serviving spouse can now use the full 600,000 of both of them.

and no, there is no need for a house valuation but I'm sure you could get a local estate agent to do it for nothing.

I bow to your updated knowledge - apologies to the OP.

Murdina

Actually don't rule out a DOV. If your dad does not actually need everything he is due to inherit to live on, it might make sense to pass it on now up to the extent of your late mother's nil rate band. Why? Well suppose she left your dad 400k and 100k of it which he did not "need" was invested so that by the time he died - which hopefully is going to be many years away - it's worth 500k. That could be well more than the increases in the IHT threshold which historically have certainly not kept pace with house prices. It would have saved tax if you had got it now. Of course, there are a lot of what ifs here and currently both property and shares look pretty dire so you might say it's not worth considering. However, just wanted to flag up the point that the change to moveable IHT nil rate bands does not totally rule out leaving stuff to someone other than your spouse when you die.

clairehi

thanks for the condolences etc.

I am planning to do the probate work myself with reference to solicitor for specific points if needed.

My query about valuing the house arises because as no iht is payable, going to a lot of trouble to value assets seems a waste of time.

(my dad had a will with an nrb discretionary trust and had lined up a solicitor to help with this and other estate issues on an as required basis. he had even got her to draft a new will taking account of the latest announced changes but sadly he was too ill to sign it. this was actually against her advice - she has advised that generally people should wait unti lthe legislation goes through before changing wills in case it turns out differently to the original announcement)

Cook_County

Murdina has rightly pointed out that in these circumstances a DOV may be helpful still.

Indeed, mum will often say that she really doesn't want/need all the stuff/money/shares that dad left & she wants to give a little it away now to the children or grandchildren.

If the Will permits the executor to appoint & pay for professional advice you could always get a one-off consultation from a solicitor if you are unsure.

clairehi

thanks but I know my dad wanted my mum to retain control of her capital.

anyone, views on valuing the house welcomed.

Mikeyorks

clairehi wrote: »

anyone, views on valuing the house welcomed.

If you're convinced that IHT isn't an issue ..... do it yourself. My Dad died last year .. leaving everything to Mum. I handled the whole of Probate (including an unexpected Trust problem .. having been given an outdated Will to start off with!) .. including the property valuation. No issues raised by HMRC / Probate.

But it was in a relatively dense area, So I was able to get a realistic figure from an identical property sold just a few weeks before .. from here :

http://www.ourproperty.co.uk/

... but as you indicate that is not possible - just get a local EA opinion, and rationalise that to the figure you say you already have? You do not need a professional valuation (I seem to also remember that is stated in the Notes?)