An executor has three jobs: work out what the deceased owned, deal with the debts, and pass what remains to the people entitled to it. All three rest on knowing what the assets are worth, and in most Queensland estates the largest single asset is real property. A market valuation as at the date of death gives the executor a figure to administer from, one the beneficiaries, the accountant and, if it comes to that, the court can all work from. Without it, the estate is distributed on an assumption, and assumptions are where estate disputes begin.

Why the date of death is the date that matters

Value in an estate is assessed as at the date of death. Not the date probate issues, not the date the house is cleared out, not the date a beneficiary decides to sell. That date is fixed by the event, and a good deal refers back to it: the statement of assets and liabilities the executor prepares, the tax position that follows the property, the shares each beneficiary takes, and any later question about whether the estate was administered properly.

Administration commonly runs for many months, longer where the will is contested. The market can move in that time, which does not change the date of death figure but can mean the estate needs a second assessment closer to distribution. Easier to plan for at the start than to reconstruct later.

What the executor’s valuation has to establish

A valuation prepared for an estate does more work than a number on a page. The report should fix:

  • The interest being valued. Whether the deceased held the whole interest or a share, and on what tenure. Property held as joint tenants passes by survivorship and does not form part of the estate, worth settling before anything is valued.
  • Market value at the date of death. Assessed on sales that settled around that date, not on what the property might fetch today.
  • Condition as at that date. Estate properties are often long held and lightly maintained. The figure reflects the house as the deceased left it, not as it looks after the family has repainted and cleared the yard.
  • Encumbrances and occupancy. A life interest granted by the will, a tenant in place, an easement or a caveat all bear on value and on what the executor can do with the asset.
  • Purpose and reliance. The report should state that it is prepared for estate administration and who may rely on it. A report addressed to the wrong purpose invites challenge later.

The tax position that follows the property

Death does not usually trigger a capital gains tax event by itself. The consequences travel with the property and land on whoever eventually sells it. That is why the date of death figure still matters long after the estate is wound up.

What comes across depends on when the deceased acquired the property. Broadly, an asset acquired before the capital gains tax regime commenced in September 1985 is treated as acquired at its market value at the date of death, so that figure becomes the starting point for any later calculation. An asset acquired after that date generally carries the deceased’s own cost base through to the beneficiary. Further rules apply where the property was the deceased’s main residence, including a limited period after death within which a sale can be treated concessionally.

Which limb applies is a question for the estate’s accountant or solicitor. The valuer’s contribution is narrower and just as necessary: a market value figure at a stated date, supported by evidence, in a form the Australian Taxation Office will accept.

Dividing fairly between beneficiaries

An executor owes duties to every beneficiary, not to the loudest one. Where the will leaves the estate in shares and one beneficiary wants to keep the house while the others take cash, the value of that house decides what everybody receives. The same applies where several properties of unequal worth are allocated rather than sold.

These conversations run hot, because the asset is usually the family home and the parties are siblings. An independent registered valuer takes the argument off the family. The figure stops being somebody’s opinion advanced in their own interest and becomes an assessment by a professional with no stake in the outcome. If a family provision application is later brought, and statutory time limits apply, the court will need to know what the estate was worth. Evidence prepared properly at the time carries more weight than a figure assembled under pressure once proceedings have started.

Selling, transferring, and a death that was years ago

A sale on the open market at arm’s length is strong evidence of value at the date it happened, though not at the date of death. If instead it is transferred to a beneficiary, no market test happens at all, so a valuation is the only record of what changed hands and on what basis. Queensland transfer duty also treats a distribution made in accordance with the will differently from one that departs from it, so where beneficiaries swap entitlements or one pays the others out, value becomes a question for the revenue office as well as the family.

Where the death was years or decades ago and no valuation was obtained at the time, one can be prepared retrospectively. The valuer works from sales that settled around the historical date, together with council and title records, historical aerial imagery, old listing material and photographs, and evidence of the property’s condition at the time. Estates left partly administered, or a house held for a surviving parent and dealt with only after the second death, turn up regularly and are workable.

Why an agent appraisal is a different document

An appraisal from a selling agent is a marketing opinion, generally free, usually a range, and often given by someone who would like the listing. It rests on no defined standard of inspection, sets out no methodology, and carries no professional liability. In a straightforward estate where everyone agrees, that may never be tested. The difficulty is knowing in advance which estates those are.

When a beneficiary disputes the distribution, when the Australian Taxation Office reviews a cost base years later, or when an executor is asked to justify what was done, the question becomes what was relied on and whether that reliance was reasonable. A valuation signed by a registered valuer carries a name, a registration, professional indemnity cover, and reasoning that can be examined line by line.

If an estate is being administered and the property figure needs to hold, whether the death was last month or a long time ago, call the practice on 07 5550 4055 and talk through what the estate requires.