If someone dies without a Will, their estate will be distributed in line with inheritance rules called the rules of intestacy. These rules will look at how much the estate is worth and what surviving relatives there are. If the estate is worth more than £270,000, this can have a bearing on how it's distributed. This is why it's necessary to value the estate properly.
For free initial advice and guidance call our Probate Advisors on 03306069584 or contact us online and we will help you.
When someone dies, the law decides what happens to anything they own, including their home, money and personal possessions. This is collectively called their estate.
If they left a valid will, then the will should determine which people benefit and what share they receive from the estate. If a person dies without a will though, the rules of intestacy determine who is entitled to receive the estate and in what amount.
Under the current intestacy rules, if the person was married or in a registered civil partnership when they died and the value of their estate is less than £270,000, then everything will go to their spouse or civil partner. If the value of the estate is more than £270,000 and the person who died left behind children or grandchildren, they could be entitled to some of the estate.
The executor/administrator will need to value the estate to ensure that is appropriately divided in the eyes of the law.
How to value an estate
So, to determine what happens to an estate without a Will, it first needs to be valued to establish whether it's worth over £270,000.
The first step is to make a list of all the deceased's assets and liabilities (debts) including those that they jointly own or are jointly responsible for. Assets include money, shares, property, life insurance policies, pensions, jewellery and vehicles, to name a few. Liabilities include any outstanding loans, credit cards, mortgages, bills etc.
The next step is to establish which assets and liabilities actually form part of their estate. This can become quite complicated as some assets and liabilities in the deceased's sole name or joint names could pass to someone else outside of the rules of intestacy. For example, a jointly held bank account is likely to pass automatically to the surviving account holder, so the value of the account would not be included in the value of the deceased's estate. If you are unsure then it is vital that you take legal advice to understand the position.
Once you know what assets and liabilities make up the estate then the next step is to value each of them (this needs to be their value at the date of death). Obtaining bank balances at the time of death is quite straightforward, but valuing assets such as property can be subjective, so it is sensible to get an independent valuation from an expert, to evidence how you have valued it. The value should be based on what it would sell for on the open market to an unconnected third party and does not take into account any sentimental value.
Once all the value of the assets have been calculated and the value of the liabilities have been deducted, this will leave the net value of the estate for intestacy purposes.
To speak with a Co-op Probate Advisor call 03306069584 or contact us online and we will call you.