Probate & Net value
Discussion
Hi I have a few questions about probate hopefully some of you can answer.
My sister & I are both beneficiaries and executors to our recently deceased mother’s estate.
I understand that the net value of the estate is what is left after debts are paid?
We do not currently at least expect much in the way of unexpected debts, as mum was in a care home for the last year or two of her life and had no property. She though did have savings/investments though which paid towards her care.Whilst she was alive we had Health/Welfare & Financial POA for her and ensured all debts that we were aware of were paid off.
We now have received Grant of Representation I expect as Executors to have to refund a small amount of pension overpayment back to the DWP, this though the only additional external creditor we are expecting though. We have though as her children made minor payments in advance of Grant of Representation to pay off some of her additional funeral costs, outstanding care homes fees, applying for probate etc.,
Once we have an executors account set up, are we able as beneficiaries able to claim back these costs from ourselves as Executors? Would we have to itemise each payment to ourselves? I am assuming these would not affect the Net amount?
edited to add
http://www.redcross.org.uk/en/Donate-Now/Leave-a-l...
This would seem to say we as amateur executers can't claim costs back ?
Having read a couple of threads on here is it worthwhile taking out executors insurance ?
My sister & I are both beneficiaries and executors to our recently deceased mother’s estate.
I understand that the net value of the estate is what is left after debts are paid?
We do not currently at least expect much in the way of unexpected debts, as mum was in a care home for the last year or two of her life and had no property. She though did have savings/investments though which paid towards her care.Whilst she was alive we had Health/Welfare & Financial POA for her and ensured all debts that we were aware of were paid off.
We now have received Grant of Representation I expect as Executors to have to refund a small amount of pension overpayment back to the DWP, this though the only additional external creditor we are expecting though. We have though as her children made minor payments in advance of Grant of Representation to pay off some of her additional funeral costs, outstanding care homes fees, applying for probate etc.,
Once we have an executors account set up, are we able as beneficiaries able to claim back these costs from ourselves as Executors? Would we have to itemise each payment to ourselves? I am assuming these would not affect the Net amount?
edited to add
http://www.redcross.org.uk/en/Donate-Now/Leave-a-l...
This would seem to say we as amateur executers can't claim costs back ?
Having read a couple of threads on here is it worthwhile taking out executors insurance ?
Edited by anonymous-user on Monday 5th March 21:49
I’m assuming you and your sister are the only beneficiaries?
If so, and if you and your sister both agree, then you can take whatever expenses you like from the estate so that you’re not out of pocket yourselves. But that’s a separate issue from the net value of the estate; the only things you can deduct for that are debts and funeral costs (and maybe one or two other things).
For example, when my Dad died last year, the cost of clearing his house was going to be enormous (he was a hoarder). I was able to pay for that out of the estate funds, but for HMRC purposes I couldn’t deduct it from the estate for the IHT calculation.
In other words, provided you and your sister agree you can claim back whatever expenses you want, but when it comes to declaring the value of the estate to HMRC or to the probate office you can only deduct certain things (and I believe that’s limited to debts and funeral expenses).
In my amateur opinion, any funeral costs, pension over-payments and care home fees can be deducted from the declared estate value, but your executor costs, probate fees and any other costs associated with sorting out the estate can’t.
If you are anywhere near the IHT threshold then I’d strongly recommend getting a solicitor to guide you. Only try to DIY the IHT 205 form if you’re going to be comfortably below the threshold.
If so, and if you and your sister both agree, then you can take whatever expenses you like from the estate so that you’re not out of pocket yourselves. But that’s a separate issue from the net value of the estate; the only things you can deduct for that are debts and funeral costs (and maybe one or two other things).
For example, when my Dad died last year, the cost of clearing his house was going to be enormous (he was a hoarder). I was able to pay for that out of the estate funds, but for HMRC purposes I couldn’t deduct it from the estate for the IHT calculation.
In other words, provided you and your sister agree you can claim back whatever expenses you want, but when it comes to declaring the value of the estate to HMRC or to the probate office you can only deduct certain things (and I believe that’s limited to debts and funeral expenses).
In my amateur opinion, any funeral costs, pension over-payments and care home fees can be deducted from the declared estate value, but your executor costs, probate fees and any other costs associated with sorting out the estate can’t.
If you are anywhere near the IHT threshold then I’d strongly recommend getting a solicitor to guide you. Only try to DIY the IHT 205 form if you’re going to be comfortably below the threshold.
Edited by Dr Mike Oxgreen on Tuesday 6th March 08:02
Hang on, I’ve just realised you said you’ve got the Grant. Therefore you’ve done the difficult bit, and the issue of net value is done and dusted - that figure would have been on the IHT 205/405 form that you submitted to the Probate Office (or HMRC if IHT was involved).
So from now on you can just take expenses from the estate (with your sister’s agreement) and distribute the funds between you.
So from now on you can just take expenses from the estate (with your sister’s agreement) and distribute the funds between you.
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