How Do I Get A House And Its Contents Valued For Probate

Posted on 6th May 2020

Quite often, when a person dies, Probate will be required to prove who is entitled to administer an estate. When a person dies with a Will, the executors named therein derive some of their authority to deal with the estate from that document, although to deal with other matters, a Grant will be required. For example, before selling or transferring any property or land. When a person dies without a Will, there is no one with any legal authority to begin administering the estate, and the people who are most closely entitled to benefit under the Rules of Intestacy would normally need to apply for Letters of Administration before they can take any action.

However, in some cases, when the estate is minimal, organisations may be willing to accept a signed indemnity from the beneficiaries to confirm that they accept all liability for any unknown person’s entitlement under the intestacy rules or claims against the estate. Either way, when you are dealing with your loved one’s estate and Probate is required, you will need to consider the worth and contents of your loved one’s house, and how to get everything valued. In this article, our Probate Solicitors in Lancaster discuss how to do this.

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How Do I Get A House Valued For Probate?

Ensuring that a correct value of a property or land is obtained for Probate purposes is important. During the administration of the Estate, you will need to keep a clear record of how much money has come into, or has been paid out of, the deceased’s Estate. You will be responsible for paying any debts or other liabilities, such as outstanding utilities from after the person’s death, as well as collecting in money from bank accounts and other assets.

You will need to be able to account to the beneficiaries, whether or not you are one of them, for what is paid in and out. This means that you should have a clear record that you can produce, showing what action has been taken and what the estate has in assets at the end of the administration. To make sure that you are acting in the best interests of the beneficiaries, and acting in accordance with your fiduciary duties, it is important to get the property valued correctly.

First, it’s important to consider the state of the property, any additional land, recent sales of properties of a similar value, and current goings-on in the World which could impact the value. Whilst you will need to seek professional guidance on this, such as from a Chartered Surveyor or Estate Agent, these are factors that will need to be taken into account when the property is valued.

When an estate is non-taxable, meaning it is generally under the inheritance tax threshold of £325,000 (or higher, if an additional transferable tax-free allowance is available) or the estate passes to an exempt beneficiary, such as a charity or spouse or civil partner, our Probate Solicitors in Lancaster would recommend obtaining three estate agent’s valuations. You can then take the average of the three valuations, and use these for Probate purposes.

When an estate is potentially or definitely taxable, or the house has special considerations, such as is a farmhouse or has unusual characteristics, our Probate Solicitors would suggest the house is valued by a Chartered Surveyor, who is a member of the Royal Institute of Chartered Surveyors, known as RICS.

The costs of such valuations can be paid by the estate, as an administration expense. Once a valuation has been carried out, the value given by the surveyor can be used for Probate purposes.

Such valuations can also carry importance when Capitals Gains Tax is payable on the sale of the property, as the valuation acts as a base value for the tax calculation, and can provide concrete evidence of how the value has been reached.

How Do I Calculate The Value If There Was A Mortgage?

The mortgage on any property would be included in a separate section of any inheritance tax forms, and therefore would be accounted for in the estate overall. For example, if the property value was £200,000, and there was an outstanding mortgage of £150,000, then the property would have equity of £50,000. Therefore, only £50,000 of the property value would count towards the taxable estate.

When the property is sold, or transferred, any mortgage will need to be dealt with and repaid, unless specifically agreed with the lender otherwise. Where the mortgage is paid from in the estate will depend on the wording in the deceased’s Will. In some cases, mortgages pass with the property to the beneficiary, and it is up to them to seek permission to transfer the house and mortgage into their name, or the property is sold, and the beneficiary receives the equity after the mortgage, and other sale costs, are repaid. In other situations, the Will dictates that the property passes free of the mortgage, so the other assets in the estate, such as cash in the bank, would need to be used to repay this.

What If The Property Was Owned Jointly With Someone Else?

When a property is owned jointly with another person, the value of the property would still need to be worked out, and our Probate Solicitors in Lancaster would need to calculate how much of the value belonged to the deceased. For example, if the deceased owned the house equally with another person (as tenants in common), then 50% of any equity would belong to them. If the house is owned as joint tenants with someone other than a spouse or civil partner, half the value would need to be included on the Probate forms. There are situations where, for Probate purposes, a discount to the value of the deceased’s share can be applied, and this depends on whether the fact it is co-owned with another person, thus impacting the saleability. You should seek legal advice from our Probate Solicitors, who can discuss this with you further.

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How Do I Work Out The Value Of The House Contents?

Our Probate Solicitors understand that it can be hard to know where to start when valuing a person’s chattels, which generally are the contents of their house. Sadly, finding out whether any items’ value needs to be included for probate purposes, can be difficult for loved ones of the deceased. Of course, most of the deceased’s items will hold personal value for you, however, this does not mean that, for Probate purposes, they are ‘worth’ anything.

The first thing that you need to do is make a list of the contents of the house as well as their approximate values. Common items that are likely to have value can include the following:-

Cars (although these are generally stored outside now-a-days, they are classed as chattels, so contents, for Probate purposes)

Jewellery

Furniture

Paintings

You could try and use the internet to ascertain estimated value. Websites such as ebay.co.uk, amazon.co.uk, or other specialist websites may be able to offer some guidance of what items similar to your loved one’s have sold for. You will need to take into account the age and condition of the item, too.

Alternatively, you can instruct a specialised house clearance company, who will clear the contents of the house, once you have removed anything you intend to keep or that has a significant value, and they will give you a price for the remaining contents of the house. In some cases our Probate Solicitors in Lancaster have seen, the clearance costs were fully covered by the value of the contents, so the estate ended up receiving funds back; essentially, the clearance company purchased the contents of the property.

It is important to remember that if your loved one insured any particular items that could have a significant value, they will, in most cases, have been worth more when they initially took out the policy as they have aged. You may need to get professional valuations carried out, such as at a jewellers, or an antique shop.

If you are certain that there is nothing of any value whatsoever, you may decide to have the house cleared without valuing any items. In these cases, our Probate Solicitors need a rough ‘guesstimate’ of the contents’ value, which we usually say can be calculated by working out the second-hand, car boot sale value of what you would expect the house contents to sell for.

You should not need to have applied for Probate in order to deal with the house and its contents; an executor’s authority to start the administration comes from the deceased’s Will. However, if your loved one died without a Will, you should treat the situation with caution, as you have no legal authority to deal with your loved one’s affairs until after Probate is granted. Before this, you should – in practice - only take necessary action, such as securing the house and obtaining the relevant valuations.

Seek advice from Probate Solicitors in Lancaster

Ensure that you do not take any action without professional legal advice from Probate Solicitors in Lancaster. Doing so could end up with you taking action that you should not have taken, which could lead to disputes or other issues down the line. Instead, arrange an initial consultation to seek legal advice and ensure you are aware of what action you need to take. Call 01524 581306 or email wills@mglegal.co.uk to arrange an appointment.