After someone dies, their estate will likely need to go through the probate process. This is a legality that involves ensuring there is a valid will and that the assets are correctly distributed. Jointly owned assets can often cause confusion and complexity, so we have put together a blog to explain how joint assets are valued during probate.
Joint Tenancy vs. Tenancy in Common
To understand how to value a joint asset for probate, you first need to determine the legal manner in which the asset was owned. This is typically one of two forms:
Joint Tenancy / Joint Ownership with Right of Survivorship
For assets such as shared bank accounts and the family home, this is the most typical format. Without going through a will or probate procedure, the remaining owner or owners automatically inherit the deceased joint owner’s portion of the asset. This is referred to as the survivorship right. For probate purposes, the asset’s worth is not included in the estate’s overall value because it is excluded from the estate.
Tenancy in Common / Co-Ownership without Right of Survivorship
This is more usual for friends or business partners who hold property together and want to leave their portion to a specific person in their will, but it is less common for marital assets.
Each owner owns a specific, defined portion of the asset, such as 25% or 50%. If one owner dies, their share does not automatically go to the other person. It forms part of the deceased’s estate and is then distributed as per their will or the laws of intestacy.
Valuing Other Joint Assets
Joint bank account – Passes directly to the survivor.
Investment property – Proportional Share—(e.g., 50% of the market value).
Stocks and shares – Passes directly to the survivor.
If the asset is held as a Tenancy in Common and needs to be included in the estate, follow these steps to determine the value of the deceased’s share:
- Find the date of death market value – this is incredibly important and will require the help of a professional, independent valuation by either an estate agent or a chartered surveyor.
- Verify the proportional share – Check the property deeds to establish the deceased’s exact ownership proportion legally.
- Multiply the market value by the deceased’s ownership portion to value the estate. Probate Value = decedent’s share percentage x market value at death.
In Conclusion
Dealing with and valuing joint assets after a death does not have to be overwhelming or stressful. However, if you are unsure who legally owns what, you should consult a legal professional to ensure that probate is carried out correctly and to avoid potential delays.
Contact WillFinda on 01376 350976.
