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A certified valuer will listen to your situation and answer any questions you may have, at no cost.
An Illawarra executor has to be able to explain to every beneficiary how a share in the family company, an interest in a trust or a loan to a relative was priced. We fix that value at the right date, as a certified valuer with no tie to any branch of the family, before a dollar is distributed.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
A deceased estate valuation states the market value of a business, private company shares, a trust or partnership interest or a family loan at the date of death, and at distribution when needed. Wollongong executors use it to account to beneficiaries, settle pre-CGT cost bases and answer a family provision claim under the Succession Act 2006 (NSW).
Once the Supreme Court of New South Wales grants probate or letters of administration, the executor or administrator takes control of the estate and must account to the beneficiaries for what it holds. Bank balances and listed shares carry their own price. The assets that make up most of a sizeable Illawarra estate usually do not: shares in a family company running a fabrication shop in the Unanderra industrial area, units in a trust that owns a holiday rental at Kiama, a half share in a North Wollongong accounting partnership, or money lent years ago to help a son buy a house at Dapto. Each needs a market value at a fixed date from someone who can show the working.
The risk sits with the executor personally, not with the estate. If assets are distributed on a figure nobody can support, if one sibling is allowed to take the company for less than it was worth, or if there is no record of how a number was reached, a beneficiary who feels shortchanged can look to the executor to make up the difference. Complaints often arrive late, once a beneficiary sees what the business or property sold for a year or two after the estate closed.
Most families want the opposite outcome: a quick finish, final returns lodged and no unnecessary spend. Set against the disputes it heads off, a valuation is a small item in the administration. Fixing the value at the correct date, before any shares or business change hands, costs well below an amended ATO assessment, a falling-out between siblings, or a family provision claim that takes hold because nobody can point to a reliable number.
We act for executors, administrators and estate lawyers across the Wollongong CBD, North Wollongong, Fairy Meadow and Port Kembla and out to Shellharbour and Kiama, including estates where a professional trustee holds the grant and wants an arm's length figure on the file. We do not take instructions from any one beneficiary, so every beneficiary, and the court if it comes to that, can rely on the same number.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Plenty of estates need no formal valuation, and where one is needed it usually covers only a few assets. The estate lawyer decides what forms part of the estate and the date each asset is measured at; the valuer then supplies a defensible market value for the assets with no visible price. The request tends to come at one of four moments.
Everything that follows starts here: the inventory, the executor's accounts to beneficiaries and any later challenge. Shares in a private company, a partnership or trust interest, a trading business, real property, intellectual property and money owed by relatives are each valued as at the day of death.
When the estate sells to a child, grandchild or sibling of the deceased, no open market has tested the price, so the price alone proves little. A valuation obtained before contracts are signed answers any later suggestion that the asset went cheaply, and it is the support the ATO looks for when related parties settle a price between themselves.
If one beneficiary receives the business or the shares while others receive cash or the family home, comparing what each person gets shows whether the will is being honoured as intended. Where values have moved since the death, fairness is judged at the date of distribution.
A claim under the Succession Act 2006 (NSW) asks the Supreme Court of New South Wales to decide whether adequate provision was made for the applicant's proper maintenance, education or advancement in life, and the court can treat some property that passed outside the will as notional estate. Neither step can be taken without knowing what the assets are worth, so the valuation becomes expert evidence and has to meet the court's standard.
Sort the assets for CGT first. A death does not normally create a capital gains tax bill by itself, but it decides the cost base each beneficiary takes on. For an asset the deceased acquired before 20 September 1985, the beneficiary's cost base is the market value at the date of death, so our figure sets the taxable gain on any later sale. For an asset acquired on or after that date, the deceased's cost base is passed on and the date-of-death value serves the administration instead. The tax adviser sorts each asset into one group or the other, and the depth of our work follows.
The deceased may have run a family trust in every practical sense, as appointor, director of the corporate trustee and sole decision-maker, and still not own any of its property. The estate may hold only the trustee company shares or the right to appoint a successor, and not the Shellharbour rental or the trading business sitting inside the trust. Treating trust assets as estate assets is one of the costlier mistakes we see, and the estate lawyer should settle the point before the valuation is scoped.
The standard is market value: the price that a willing, informed buyer and seller, neither forced to act, would agree at arm's length on the valuation date. For a private company or trading business we usually lead with the income approach, capitalising the earnings it can sustain once the accounts are normalised. The market approach cross-checks that against sales of comparable businesses, while the asset approach gives the floor and leads where an entity mostly holds property or investments or is to be wound up instead of sold.
Estates bring two problems of their own. The first is a business that has lost its principal. When the deceased was the specialist whose patients came to rooms near Wollongong Hospital, the senior partner whose clients kept a Crown Street practice busy, or the licensed builder behind an Albion Park Rail construction firm, part of the profit left with them. We separate goodwill that stays with the staff, systems, contracts and premises from goodwill that was personal, and value what remained on what was known or reasonably foreseeable at the date of death. Trading afterwards shows what could be foreseen; it is not a reason to value with hindsight.
The second is a minority parcel in a family company. Sold to an outsider, a 25 per cent holding with no say in management and no ready buyer would normally attract a discount. Passing to the brother who already owns the other 75 per cent, it hands him full control and most of the argument for a discount disappears. The report states both values with reasons and leaves the choice to the executor and estate lawyer. A price fixed by a shareholders' agreement on death may govern what the estate receives, yet it does not become market value for the ATO, so both figures may be needed.
When an estate reaches us already in difficulty, the cause is usually on this list.
Choose the report according to who will read it and how likely they are to challenge it. An estate where every beneficiary agrees and a professional trustee is simply keeping the file in order needs less than one facing a family provision claim in the Supreme Court of New South Wales.
Each report states the valuation date, the standard of value, the documents relied on and the assumptions made. It then covers the approaches considered, adjustments to the accounts, the handling of goodwill personal to the deceased, any discount for a minority or illiquid interest, and how the approaches were reconciled. Where two numbers are needed, such as pro rata and discounted, or a contract price next to market value, both are given and explained so the executor and estate lawyer can apply the right one.
In a contested estate the report is written to meet the Expert Witness Code of Conduct in the court rules that apply in the Supreme Court of New South Wales, which puts the expert's duty to the court ahead of any duty to whoever pays the fee. A report both sides can read as even-handed carries more weight than one built to win. If each side has an expert, the certified valuer who signed the report will meet the other expert, help prepare a joint statement of what is agreed and what is not, and give evidence if called. Most estates settle well before a hearing, commonly because a credible figure existed early.
If a beneficiary brings this distribution before the Supreme Court of New South Wales in a few years, which document shows how each value was reached? If the honest answer is a rough guess, a council rates notice or an email from the family accountant, the estate is exposed.
Talk your situation through with a certified valuer before you commit to anything, at no cost.