We have talked a lot about the importance of making a will, the need to choose your executor(s) wisely, and how changes to your personal circumstances may trigger the need to update your will. Most of the time, when people sit down to prepare a will, they will focus on the large-ticket items – things such as property, stocks and shares, and pensions or insurance. An estate is made up of a lot more than that though and this is where you may begin to hear about chattels. We delve into the more technical language of probate this month and take a look at what chattels are and how you go about having them evaluated.
What are chattels?
Chattels, simply put, are the valuables that are found in a deceased’s estate. In other words, their everyday belongings and possessions. Think of them as those things that you can pick up or move such as furniture, computers, jewellery, clothes, vehicles, cameras, a wine or art collection, and even pets, etc. There are three exceptions to this rule, which are:
- Property used either solely or mainly for business purposes
- Property held at the time of death as an investment
Some things are easier than others to evaluate and you no doubt want to make things as easy for your executors as possible. You also want to minimise any inheritance tax implications that may apply to your estate, to maximise what your beneficiaries ultimately receive when you pass.
When it comes to specialist items, getting an expert in is the best course of action. For example, if you have an extensive wine collection or have amassed some beautiful and valuable jewellery over the years the best valuation is done by a wine or jewellery expert, respectively.
What about furniture or your car though? In this case, your executors will have to rely on the open market. In other words, what is someone willing to pay?
Personal chattels are considered part of the value of the overall estate. It is important, therefore, to have them accurately valued. This will help you to distribute items in accordance with your wishes – i.e. if you are splitting your estate into two or three equally, you want to be clear on what the value of chattels is so that the distribution is equitable. It will also allow you to identify what items you may wish to gift which can then be exempted from inheritance tax.
For instance, certain items as gifts between spouses or civil partners while both are alive may be fully exempt from inheritance tax while others may attract a reduced amount of inheritance tax, known as tapered relief, above the applicable thresholds.
For advice on understanding the ins and outs of probate or for help in preparing your will or managing probate, just get in touch with our expert team at IWC Probate London. You can find us on the phone on 020 8017 1029 or on email at firstname.lastname@example.org for an informal chat or to make an appointment.