Introduction

Managing a deceased estate is often an overwhelming experience. There is so much to do, and it can take many hours of organisation to sort everything out. Property is generally the single largest asset within the whole estate. It therefore makes sense to seek the best advice and avoid the common pitfalls that many people run into when dealing with probate properties. There are a number of ways in which the beneficiaries outcome can be disadvantaged. With that in mind we have set out some easy to follow steps to help guide you through the process.

Unoccupied Property Insurance

It is essential to make sure there is adequate insurance in place so that the property and contents are safe and secure. It is likely that any pre-existing insurance policy may not provide cover if the property is unoccupied for a specified period, often as little as 30 days. For immediate peace of mind, Unoccupied Property Insurance cover can be put in place in a few easy steps. Contact us to find out more.

Property Security and Good Housekeeping

Check any door locks along with windows, garages sheds or other outbuildings. It is reasonable to consider changing the door locks so that you can be sure that nobody can access the property without your permission.

If the property is not in your local area, it may be possible to contact a local estate agent to see if they will hold a spare set of keys on your behalf. This will allow access to the property for emergencies or for any other authorised reason.

At this stage, it is also practical to consider arranging a detailed inventory and/or valuation of the property’s contents as well as locating any important documents. Items of sentimental or monetary value can be removed and secured or sold accordingly. Anything that remains can be cleared in a sensitive and appropriate manner.

Turn off any services to the property such as electricity and gas; remember to take meter readings.

Drain down water and heating systems to avoid any unwanted leaks or burst pipes. This is especially prudent in the colder, winter months. If the property is being prepared for marketing, then it may be preferable for the heating to be kept on at a low temperature. This can make the property more welcoming for potential buyers.

Contact utility providers such as water, gas and electricity companies to update them on the situation. Don’t forget to also get in touch with internet, phone, and TV providers if applicable.

Cancel any ongoing deliveries to the house, such as newspapers, milk, groceries and so on. There are also organisations that will help to reduce the amount of unwanted marketing literature being sent to the property, so the house does not suffer from a build-up of unwanted post.

Get in touch with the local council to let them know that the person has died, and that the property is empty. Some local councils offer discounted council tax rates for unoccupied homes.

Organise regular, ongoing property visits because it is important to ensure that the property remains safe and secure and is well maintained. This can include simple tasks such as basic gardening and associated tidying along with the removal of any rubbish or debris that may have made its way onto gardens or paths. Properties that appear empty can draw unwanted attention and attract thieves and/or squatters.

Once the property is insured and secured then it is time to consider the valuation process.

Property Valuation

It is a requirement that a property is valued for both Inheritance Tax reasons and in order to apply for Probate. A value should be established in relation to how much the property would fetch if sold on the open market at the date of death.

Valuations can be provided by Estate Agents and/or a RICS approved Chartered Surveyor. Ultimately it is the executor’s job to take steps to ensure that the correct information is supplied to HMRC.

It is important to consider the following points when valuing the property:

Undervaluing the property

If the Valuation Agency of HMRC feel that that the property has been undervalued then they will challenge this and request evidence to support the valuation. If HMRC finds that IHT has been underpaid, they can issue fines that are equivalent to 100% of the tax owed as well as claiming the unpaid tax liability.

Overvaluing the property

The number of people claiming IHT refunds is increasing year-on-year; in 2018/19 tax year it was 100% higher than the previous equivalent period! A contributing factor to this is properties that sell at a price lower than indicated within the overall valuation of the estate. HMRC will not automatically notify you of this, so it is important to establish appropriate open market value from the beginning.

Preparing for Marketing & Sale

If your intention is to sell the property, then it is worthwhile reviewing the options available to make sure that you can make a considered decision.

Many beneficiaries can feel hindered if the property needs considerable works to achieve its full potential sales value. This situation often means that additional refurbishment funds are required

With no access to such funds, beneficiaries can feel they have no other option than selling to cash buyers or investors. Such purchasers are better placed to carry out restoration works and benefit from the uplift in sales price. This invariably means that benefactors do not receive the full value from their legacy. Aventria Property can provide access to up-front funded finance for renovations, including project management to restore the property to prime condition thereby ensuring that the best possible price is obtained for the least amount of worry.