Asset Valuation - a pain in the probate!

There are occasions when executors dealing with a deceased estate need a valuation of assets in the form of the chattels ie the everyday items of furniture and possessions. Unlike a property or investment a valuation can not only be difficult to obtain but also wildly inaccurate.

One problem is that a high valuation of chattels on an estate that is well below the inheritance tax threshold (£312,000 for 2008/9) will not make a significant difference however, where inheritance tax must be paid a realistic open market value must be used. Following a rise in living standards it is now quite normal for people to have a chattels of a substantial value (on this subject the value for contents insurance is very often well below the actual replacement value!).

Generally speaking the appropriate valuation is the ‘open market value’ ie the value for which they could be sold. It is essential that all specialist items such as works of art, stamps, china, book and coin collections etc should be valued by a professional, cars (unless vintage) can be valued by reference to a trade guides although any boats or yachts should be valued by a broker.

Items specifically mentioned in the will should be valued individually if it is believed they are worth more than £500 although Items which are normally traded on the open market (such as musical instruments) can, in some cases, be valued by reference to prices on Internet auctions. Another problem that is becoming more common occurs when there are a number of chattels, some of which may be valuable and some of which are not, and the relative value of each is not easy for the executors to know.

Where the executor is likely to have the contents of the house cleared, it is possible for quite valuable chattels to be disposed of for little value or even thrown out. When chattels are being distributed (say where there are three children, each entitled to a third of the chattels), it is also important for values to be known, because the distributions made will need to be equal unless agreed otherwise by the beneficiaries. Since many assets are in the form of sets (china and furniture for example), some horse-trading may need to be done and having an idea of the values of the different chattels will prove helpful.

Age is relative, but we are all getting older......

Currently there are more than 20 million people aged 50 and over in the UK and it is expected to be 27 million by 2030. The Employment Equality (Age) Regulations came into effect in October 2006 and make it unlawful to discriminate on the grounds of age (unless this can be objectively justified).

The Regulations have introduced a national default retirement age of 65, removed the upper age limit for unfair dismissal and redundancy and given the employer a duty to consider requests to continue working beyond 65; this legislation also provided a requirement for employers to give written notification to employees (at least six months in advance) of their intended date of retirement and notify them of their right to request to continue working.

Employers have also been made responsible for the actions of their employees and therefore firms should ensure policies and procedures expressly prohibit all forms of discrimination on the grounds of age (as well as everything else).

Be warned - there is no upper limit to the compensation payable if an employer is found guilty of age discrimination and we would advise every employer who has not yet done so to draw up an age equality policy. It is sensible to consult with your staff or their union representative if appropriate and then made certain all staff are aware of the policy.

If you need any help with this, you know where to come.