What is an estate?
An estate is everything your loved one owned. This includes property, money in their financial accounts (eg. bank, building society, pension pot) and possessions.
First, you need to value the money and all financial assets they owned
You might have already contacted all the financial organisations your loved one held accounts with. Just as a reminder, organisations to contact often include:
- Their bank or building society – ask them to freeze any payments into or out of the account until you have applied for probate
- Their pension provider
- Any companies with which they held stocks or shares
- Their employer – they may be owed wages
Ask each of the organisations for a statement of the value of the assets and any debts held by the deceased. If they had a mortgage, ask their mortgage lender if they require payments to continue while you are completing the probate process.
Make a list of all the information you receive from the financial account providers. Include any lump sums from pensions or life insurance.
Then, you will need to consider any gifts made by the person who has died, which took place within the 7 years prior to their death.
Any gifts which totalled less than £3,000 in any year are exempt, as are any gifts made to charity or to a spouse or civil partner. There are some other exemptions which apply to smaller gifts for weddings or special occasions, and where the gifts have been made out of surplus income. If you have any doubt, you should seek professional advice.
Next, value your loved one’s possessions
- Make a list of all the possessions they owned and whether these were privately or jointly owned. The list might include property, furniture, artwork, jewellery and cars
- Estimate the value of each of these possessions on the day that your loved one died. This is a rough price that each item could realistically be sold for, not the price they paid. You can research this online, or get a professional valuation. If the estate is liable to inheritance tax (see below), you are likely to need a professional valuation
- Divide any assets jointly owned with your loved one’s spouse or civil partner by two. For any assets owned by more than two people, divide the asset by the number of owners
- To value a property for probate or letter of administration:
- a) If you know the value is not close to the Inheritance Tax threshold of £325,000, you can carry out a property valuation for probate yourself by searching for it on Zoopla, or searching for the value of similar properties in the same area
- b) You can use a local estate agent, but if you think the property may be valued near to the Inheritance Tax threshold (£325,000), it is recommended that you use a chartered surveyor as they will have more experience valuing a property for probate and Inheritance Tax purposes
Add these figures together for an estimation of the total value of the estate for probate or letter of administration.
Feeling a bit stuck?
We understand that calculating the value of an estate for probate is complicated. Although this guide will help you, others have said that using a solicitor takes away the pressure of dealing with estate laws and wills. Take a look at our trusted solicitor partners.
Next Step: Do I need to pay Inheritance Tax?