Estate accounts problem.

[happyaslarry]

Hello.
I am the sole residuary legatee of an estate and last month I was presented with a set of estate accounts, note I am not the executor. These accounts were issued by the estate's solicitors and apparently approved by the estate's executor.
I believe the accounts to be incorrect in so far as the values quoted for a number of assets differ from the values indicated by information I have. According to my information one of these assets it is 'over valued' in the estate accounts by approximately £15,000.

I do not suspect fraud etc, just errors.

I am being pressured to 'sign off' on these accounts but as the incorrectly valued assets pass to me under the will I am rather concerned about these errors. There is no inheritance tax on the estate nor would there be if these assets were 'correctly' valued.

I therefore have a number of questions about 'estate accounts' .

1) I believe that the official date of my acquisition of these assets is the date of death of the deceased and that my acquisition values are the values of the assets on the day of the deceased's death, are these beliefs correct?
2) By 'signing off' on these accounts what precisely am I 'agreeing too'?
3) For taxation purposes, what values do I acquire these assets at,

a) the values listed in the estate accounts,
b) the values I know/believe to be correct,
c) some other values and if so how do I obtain these values?


4) If, for arguments sake, I later sell the asset, mentioned above, that is over valued in the estate's accounts and I use its estate-accounts-listed-value as my acquisition value when making a capital gains tax etc declaration would I be doing something illegal? I suspect I would! If so, who would bare the consequences if HMRC found out? I have asked for a copy of the document that gave the executor/estate's-solicitors the value of this over valued asset.
5) Also, I am not certain that certain bequests have been met, these involve the passing of various nick knacks to various beneficiaries. Should this have any baring on my 'signing off' on these accounts?


I am inclined to refuse to 'sign off' on these accounts and to demand that the questionable valuations be checked and verified.
Thanks.
Larry.

[The Debt Star]

Re: Estate accounts problem.

1) I believe that the official date of my acquisition of these assets is the date of death of the deceased and that my acquisition values are the values of the assets on the day of the deceased's death, are these beliefs correct?

No. its the date they are actually paid (appointed out) to you. Unless the assets have ben appropriated to you by the PRs with a deed of appropriation. This can be done to avoid the estate having to pay potential CGT and income tax and the liability passes onto the beneficiaries, who can utilise their own individual allowances etc.

Until paid out to you they are part of the esatte and vest in the Executors (from the date of death). Hope that's clear.

2) By 'signing off' on these accounts what precisely am I 'agreeing too'?

Well, first off, the executors do not need to get a beneficiary to approve the estate accounts at all. It is best practice because if the beneficiary later says "oi!I don't agree with this or that" the Exors can then say "tough, you signed and approved them at the time." But, per se, they can just distribute and send you a copy of the executor signed accounts. Its just normal practice to get beneficiaries to approve what they are receving.

3) For taxation purposes, what values do I acquire these assets at,

a) the values listed in the estate accounts,
b) the values I know/believe to be correct,
c) some other values and if so how do I obtain these values?

It depends what tax you are talking about. If its CGT, there is an uplift at the date of death and the esatte is responsbible for any CGT arising between the date of death and the distribution to the beneficiary. Therafter, its your asset and your acquite it the date it was paid over to you. Are we talking about shares here? An investment? A property?

The Revenue will not neceassrilly follow the valuations supplied by the estate, certainly not for CGT purposes. AS for IHT, if those assets are still in your esatte when you die they are valued at date of death.

4) If, for arguments sake, I later sell the asset, mentioned above, that is over valued in the estate's accounts and I use its estate-accounts-listed-value as my acquisition value when making a capital gains tax etc declaration would I be doing something illegal? I suspect I would! If so, who would bare the consequences if HMRC found out? I have asked for a copy of the document that gave the executor/estate's-solicitors the value of this over valued asset.

You are responsible. HMRC will not be bound by estate valuations. You can get the asset/s valued yourself for CGT purposes or ask the executor to have them professionally valued now. As you are the sole beneficiary its horses for courses - you pay. Only if the Exor is a professional it will cost you even more as he will be charging his own fee plus whatever the professional valuer says.

5) Also, I am not certain that certain bequests have been met, these involve the passing of various nick knacks to various beneficiaries. Should this have any baring on my 'signing off' on these accounts?

No. It is the executors responsibility and he alone should ensure that the estate is administered correctly and bequests distributed.

I am inclined to refuse to 'sign off' on these accounts and to demand that the questionable valuations be checked and verified.

If you feel strongly about it then you can "request" the executor values the asset/s in question but you cannot compel them to. You are paying ultimately though, so its up to you. I don't see why they should refuse - its a few extra bucks for them in arranging this.

Hope this helps.
TDS

[happyaslarry]

Re: Estate accounts problem.

TDS.
Good, clear answers thank you.
The assets that is worth approx £15k less than valued is a shareholding and my concern is about capital gains tax. I have googled etc the share price history for these shares and downloaded that but I think I will also see what copies of newspaper financial pages I can get hold of for the relevant dates, date of death, date of acquisition.
In light of your information I am inclined to simply tell the executor etc that I am not prepared to sign off on the accounts and leave it at that.