The Problems Executors Face When Valuing Chattels And Assets
An increasing problem for executors dealing with an estate is the valuation of chattels ie: the assets of the deceased. ‘Chattels’ in probate terms are the everyday belongings which can be furniture, ordinary possessions, china as opposed to investments, a house or similar. A house is much easier to appraise and can be valued by a specialist RICS valuer. As for investments their market value is readily available at any time.
Living Standards And The Rising Value Of Chattels
Due to the increase in estate values and wealth an increased number of estates are now falling into the IHT (Inheritance Tax) net. When the value of the estate is significantly below £325,000 the IHT threshold for 2017/18 even placing a high estimated value on the belongings or chattels would most likely not present an IHT liability.
The rise in living standards unlike the past has shown that people now have chattels and belongings that are of a considerable value, which has resulted in some households having grossly undervalued insurance policies falling well short of their real value.
Open Market Valuation For The Purposes Of Probate – Correct Practice
The correct basis for asset valuation for the purposes of probate, is ‘the open market value’, as is if the sale was between a willing seller and willing buyer. For works of art, paintings, stamp collections, book collections, coin collections and the like a RICS specialist valuer should always be instructed as the items are likely to have a significant value. Car trade guides can be used for vehicle values and boats can be valued through a yacht broker.
Correct Procedure When Valuing Bequests And Valuable Items
Bequests and individual items worth over £500 should be valued and listed individually. Commonly traded items like antique furniture, musical instruments and so on can usually be valued by a comparable gained from prevailing internet and auction sale results.
House Clearance – Use A Reputable Company
A common problem these days is that executors may not know the difference between items of no value and other items that are quite valuable, and where general house clearance company has been instructed to empty the property items of value may be disposed of for small sums or even thrown away altogether.
Sometimes where three children have been given an equal third share of the distributed chattels its very important that the correct values have been ascertained, this makes distribution fair and easy at a time where emotions are running high thus avoiding potential family disputes. This is why an accurate professional valuation is useful.
Jeffrey Avery – 06/04/2018
