Help with completing an IHT205 form to apply for administration of estate

[ISpentTheDayInBed]

I posted a couple of weeks ago about my DSD's mum dying suddenly and leaving a bit of a messy estate.

Myself and DH are trying to help DSD sort things out, and have got most of the paperwork together. I have started the IHT205 for DSD today (she has Aspergers and finds coping with stuff like this difficult, and has asked me to help and I am explaining what I am doing).

Just trying to clarify a couple of things... DSD's mum's estate is quite simple, she had a house with a small mortgage, a small pension lump sum, a small insurance policy, some debts against the estate, and a car that is now probably just worth scrap. Is an online estimate of the value of the property ok for now (I have used an Estate Agent's online calculator and gone for the lower/medium value as the house is poor decorative order). Is the figure for the deceased 'personal posessions' the total figure for the bits and pieces in the house, furniture etc? The car is almost scrap, is a Parkers price ok?

I want to help DSD but I want to do this properly and not cause her any further trouble.

Finally, foolishly IMO, DSD and her partner have managed to close her mum's savings account and taken the money already. It was only a couple of thousand. Although this is now long gone, should it still be included ono the IHT205?

Once we have gone through this and the administration process, I will be advising her to get a solicitor then to sort the house out etc, and the costs will come out of the estate.

Valuations need to be at the date of death - so you need to declare the value of savings accounts at the date of death. Your DSD shouldn’t be taking money from the estate before debts are settled unless it’s for funeral costs.
Parker’s price is ok for the car. Household possessions are likely to be worth hardly anything, given its the price they would fetch if sold now not the price they cost new.

If you want to do it completely by the book then the House valuation should be a RICs surveyor and you can get someone around to establish price of everything else - we used executor solutions for either the latter or both bits.

I don’t know if this is all overkill though!

Thanks thereinmadnesslies I thought that was the case, my DH is not at all happy about it! There is also the matter of DWP not being informed about the death for a few months, so that will have to paid back. Another relative registered the death, and it looks like the form that needs to go back to DWP was never completed. However, the current bank account was closed a few months ago so at least any payments after that would have been returned (I hope!).

Do you know if we need to get proper estate agent valuations at this point? The property is worth less than £100K

The phone line is really helpful for free advice about what you need to do.

We got estate agent valuations. Just as well as, although we had done research online, we were well out.

I feel pretty confident of the valuation of the house. I will round it up to the next 10K but the value of the estate is going to be less than £150k so hopefully it won't cause a problem.

If the whole estate is that far away from the inheritance tax threshold then I think the type of careful estimating you’re doing will be fine. Did she have contents insurance? That would be a place to look for a valuation of her possessions.

As the value of the estate is well below the IHT threshold and you are pretty confident of the value of the property then just use the calculation you have and add the £10k just to be on the safe side. It is not worth paying someone to value the household contents unless there are valuable antiques, so an educated guess is fine, so is the Parker's guide for the car. The only time you need to be spot on with estimates is if you are close to the IHT threshold, but in this guess you sound likes you are well within that. I am puzzled as to how your DSD was able to withdraw money from the deceased's account as all bank accounts are frozen on notification of death and they should not be paying any money out until they have sight of probate unless it is to pay for funeral costs.

Thanks DonaldWeasley I don't think there was any contents insurance, just the premiium rate building added on by the mortgage company unfortunately. Sadly, most of the contents have been disposed of as the house had got into such a state. I have estimated £5k which is definitely on the high side. It's all very sad

IWantedtobeEmmaPeel we have no idea either. My DH is not happy. It is 30+ years since he was in a relationshop with DSD's mum, but has kept close contact with DSD. He paid for the funeral costs, to help his daughter out. She has definitely had the cash from the savings account, and the current account closed now. They have the "Tell us Once" scheme in our area, but don't think they have done that. It's all a bit of a mess.

DH is happy to help is daughter out, but he's not happy that they are withdrawing money from estate and spending it as fast as they can before debts settled. Need to get it sorted quickly now and they can decide if they would like to try and get a mortgage to get the house, or take what cash is left and blow it.

Your DH is right to be concerned when there are debts to be repaid from the estate. It's a shame the relative who registered the death didn't use the Tell Us Once service as it saves a lot of time. I suppose if there is insufficient cash left to pay off the debts then the money would have to be raised from sale of the house. Or do you think you DSD is assuming your DH will pay off the debts?

IWantedtobeEmmaPell No, I don't think DSD wants by DH to pay off the debts. I don't want to be unkind, but both her and her partner are completely clueless about financial matters. As I mentioned earlier, DSD has been diagnosed with Aspergers. She is a lovely young woman, but is out of touch with reality. She would like to get a mortgage to get the house, it would be a really small amount, but she isn't working at moment, and although her partner has a well paid job, he probably has a poor credit rating

Whilst we are doing all the sorting out and getting information together, I have suggested that DSD and her partner look at getting a mortgage in principle if they want to keep the house.