Understanding the term probate and its procedures can take some time to wrap your head around. It’s important to have a clear grasp of how probate will work for you when it comes to your property-related purpose and how an independent valuation will be the first step in helping determine and establish a fair true value of the property.
Firstly, what is Probate?
When dealing with a deceased estate, probate is a legal process to obtain a “grant of probate”. This grant allows the executor of the will to manage the assets of the deceased person. Probate is only applied by the executor if there is a will.
When obtaining a “grant of probate” in other terms you will be certifying the will of the deceased and that all wishes be carried out. In saying this, the executor will oversee the arrangement of all debts to be paid and all assets are distributed adequately.
It’s important to ensure that each step during this process is done correctly and to realize that the probate procedure can take up to 12 months or more to be completed. If you are unsure of the application process for probate as the executor of the will, seeking out legal assistance will help establish that you have everything accounted for.
When it comes to the executor of a will, this person can either be a family member/friend or a legal firm, either way, the process is an important procedure and it can be stressful, especially if you have never dealt with probate before.
Process of probate, how to get started.
Depending on your circumstances, you might not require a probate. A “grant of probate” is commonly used to trigger the release of funds from the appointed financial institution, but this however may not be for all the deceased assets. Depending on the financial institution, a death certificate and the will may only be required if a small amount of money is to be released to the executor.
When assets are jointly owned, probate is not necessary, as the assets can be transferred to the other parties without a grant of probate. However, if the deceased estate contains multiple forms of assets, like real estate or shares then a grant is required to release the assets into the executor’s name. Another reason why probate is required is if the will is contested.
Depending on the state or territory you live in, the process of probate will differ. For example, if assets of the deceased are held within one or more states, then a separate application for the grant will need to be completed by the executor for each state. There are multiple probate procedures and conditions for financial institutions or other types of asset/account holders that the executor should be aware of in terms of what may or may not be required.
A Probate Property Valuation
Specifically, when it comes to property when an executor is applying for probate the executor is required to report what the value of the property is when applying for probate purposes. The reason being, as there is a higher risk of disputes when it comes to the value of a property. As a property is a significant asset there is the potential for unfair division, when a will has contested the value of the property is required, and when multiple beneficiaries are involved, it is vital that the value of the property is distributed across all beneficiaries effectively.
There are several possible outcomes that may arise when a property is being transferred into the executor/beneficiary’s name:
- The property will be sold
- The property will be retained and will be distributed between beneficiaries. In this case, if there is still a mortgage on the property then the mortgage repayments will be the responsibility of the beneficiaries
Obtaining a property valuation during the process of probate, is a safety net to ensure a fair settlement is achieved according to the terms or wishes within the will.
When there is no will or grant of probate, a deceased estate is otherwise divided. When this is the case, it is common to require a property valuation that will help determine the true market value of the property so, a deceased estate property valuation can be useful for:
- Ensuring fair division of assets
- Reaching a settlement in deceased estate cases which have escalated to Family Law Court
- To calculate capital gains tax needed at a future date
- In cases when a share of the property is sold, to calculate the amount of stamp duty owed on that portion of the property
As one of the most important steps firstly, would be seeking out an independent property valuation, this is necessary to make sure that the assets and everything tied to these assets are calculated accurately and distributed accordingly. In a case where the property may eventually be sold, a probate is necessary to have the title changed to the executor/beneficiary.
The process of probate is a delicate and stressful matter and must be completed thoroughly and correctly to the highest of standards. No matter the circumstance, seeking out professional advice from a senior valuer that is specialized in the field of the property will have you on the right track to obtain a comprehensive valuation report which will ensure that the property reflects the current market value in an unbiased manner.
Stephanie Patterson – LinkedIn Profile
Stephanie Patterson is an industry expert with over 20 years of experience and is now a certified senior valuer at Vals TAS. She has shown passion and dedication throughout her career to become an expert property valuer. Stephanie has extensive knowledge of the property market which she gained through years of valuing commercial, industrial, and residential properties. Stephanie now uses her expertise in valuations to teach junior valuers and features as a guest lecturer across Tasmania.