After someone dies, their estate needs to be valued. You’ll need to know what their ‘financial’ value was at the time of their death. At the other end of the scale, you’ll also need to know what their debts were. Debts don’t just disappear when someone dies, but if their assets aren’t more than their debts, then those debts may just disappear – but that’s not a reason to own nothing when the time comes!
Knowing the assets and liabilities also lets you know if money is due to the tax office in the shape of inheritance tax.
The easy ones to look over are the bank accounts, national savings accounts and building society accounts. When you get final figures for these accounts you must remember to have interest added to the date of death.
If there’s a joint bank account then the funds in the account pass automatically to the other person, but you’ll still need to assess how much belonged to who.
Life assurance is a tiresome claim, but the figures should be easy to find out; it’s just the time taken to get the funds moved from the life assurance company to the probate account that causes the headaches.
Some insurances get forgotten. For example, if you were away on holiday it may be that the travel insurance will pay out on death.
Stocks and shares, often known as equities, need to be valued at the date of death. Nevertheless, please note that the values of those shares can still go up or down until they’re sold, or they might just be transferred according to probate and the requirements of the will.
Shares in private companies and partnerships are even more difficult to value. The accountants of the business, will probably have to be involved to draw the business’s accounts to date even if it’s not year end.
Pensions need checking to see what value they have on death. Some might still pay out a further lump sum while some end completely on the death of a pension holder. If state pension was being paid to the deceased it often continues getting paid after someone has died and therefore the overlapping funds will need to be repaid.
State benefits need to be balanced to the date of death. For example, child benefit will continue if one parent lives on, but it will end if only one parent was alive.
We haven’t even started on property and farms yet…
Filed under: Legal Advice
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