Estate valuation for probate is often at the very bottom of the priority list after a loved one has passed away. However, it is an essential matter that, unfortunately, needs to be dealt with as soon as possible. Here, we look at how you can get this sorted with minimal stress.
Who deals with probate valuation?
The executors or administrators named in the will are legally responsible for organising the probate valuation. You need to determine the property’s Open Market Value (OMV) as of the date the deceased passed away. As a general rule, if the estate is straightforward and well within the standard tax-free threshold of £325,000, you can usually estimate the value of normal household items yourself. However, HMRC guidance states that you should get a professional valuation for any specific personal assets worth more than £1,500. When it comes to the property itself, you will need estate agents or qualified surveyors to help you establish that official date-of-death value. There are pros and cons to both. Using professional probate services can help executors ensure accurate estate reporting and reduce the risk of HMRC disputes.
Official HMRC probate valuation guidance explains how estate assets should be assessed for inheritance tax purposes.
Estate Agents
A local estate agent can give you a very accurate idea of what the property is worth, and the best part is that it will not cost you a thing. While their initial valuation is not a formal legal document, their market appraisal gives you a solid starting point. Just bear in mind that a qualified RICS valuer must ultimately perform a truly formal valuation.
The main thing to watch out for with estate agents is that they sometimes overprice properties. This is because they often focus on a high asking price rather than the actual selling price the house would fetch. When you call, explain clearly that you are seeking a realistic OMV for probate purposes, not a marketing price. It is also wise to get several valuations from different agents to compare them and get a sound, accurate idea.
Surveyors
If the property has unique quirks, is a bit unusual, or has clear development potential, a surveyor’s valuation is definitely the best option for probate. HMRC tends to prefer formal surveyor valuations, even though it isn’t always strictly mandatory. Similarly, if there are any court proceedings involved, judges strongly prefer these types of reports.
There is no doubt that using a surveyor is the most reliable method all around. However, the obvious drawback is the cost. Surveyors will charge a substantial fee for their service, so it is best to research the costs upfront so you can prepare for that initial expense.
Surveyor reports are often based on RICS property valuation standards, which are widely accepted in legal and probate cases.
During difficult times, practical matters like estate planning can feel overwhelming. If you need support, speaking with a professional such as Intestacy Rules can help ease the process.