A survey on lessons in probate best practice by the Financial Times in mid-2020 revealed some interesting information, which those handling probate asset valuations (including classic motorcycles) should keep firmly in mind when the duty as executor is required.
Maintaining up-to-date records
Perhaps the most important point was to ensure that, when one agrees to be an executor, one should keep up to date with the person who has nominated you to ensure that their will and other key documents – any shareholdings, property deeds, insurance details and all of their bank statements and information on other assets – are readily available in a file for when the worst happens, and that you as their executor are aware of their intentions.
Keeping executors in the loop regarding all financial affairs and changes to documents including the will is an important part of the process but, executors should also make time for their nominees! A friend recalls how his mother pleaded with him to sit and discuss her will for two or more years before she died. He put her off until it was too late, only to find that she had cut his two sisters out of their inheritance. Sorting that out between siblings after the reasons for the decision have died is never going to be pleasant. Knowing that his mother felt that she had to make such a decision was not easy for him, either.
Source Accurate and Reliable Asset Valuations
The survey emphasised the importance of reliable asset valuations, especially in estates worth more than the £325,000 individual inheritance tax threshold. One reader advised that, in their experience, the district valuer may be called in to verify information submitted if it was felt to be unreliable.
The most important thing to remember about a probate valuation is that it should be calculated as a selling price on the day of death. Having the experience to see past asking prices and inflated dealer opinion to know the market trends, adjust the asset value for history and condition and to create a report that HMRC can rely on as accurate and complete is the purpose of my classic and vintage motorcycle probate valuation service. This is particularly true of rare and very vintage motorcycles, where observation data is hard to come by.
Be Aware of Probate Delays
HMRC insists that any inheritance tax owed should be paid by the end of the sixth month after death. However, grant of probate may take up to eight weeks to arrive, so much of the time available will be eaten up by the waiting period.
This makes it even more important to have access to as many documents as possible from the start. Up to seven years of bank statements may be required to check for money given as gifts – or any other gifts dispersed. One man who received a £450,000 cash gift through an offshore account ended up being fined £87,000 in court (via an anonymous tip-off) and came to regret the decision not to advise his father’s executors of the transaction. The executors were not prosecuted but the risk is there.
Solicitors versus Chartered Accountants
Solicitors were given a hard time by some respondents, with many recommendations to use Chartered Accountants in their place. A personal experience with a local probate solicitor was not great and, while that might have been an exceptional case, the process of engaging an accountant rather than a solicitor to assist with probate generated more positive feedback due to lower fees and quicker turnarounds.
The full FT article on probate best practice as advised by private executors is well worth a look. Contact me to discuss my efficient and affordable online probate valuation service for vintage motorcycles and classic cars.