Estate Valuation Dispute Leads to Court Case

When an estate containing assets such as property or unquoted shares is to be distributed amongst several beneficiaries, there is potential for dispute over the valuations of assets.

A case which is now starting to occupy court time illustrates this point. It concerns the estate of a wealthy woman from Sheffield who had significant property interests. She died leaving three children: two daughters and a son, who lives in France. The daughters were named as her executors, together with her accountant.

Under the woman’s will, 40 per cent of her estate passes to her son and this is to be paid in cash. The other 60 per cent passes to her two daughters by way of property.

The dispute has arisen because the son is arguing that his sisters have placed valuations on the properties they will inherit which are artificially low. He has therefore commenced action to have them removed as executors.

When considering arrangements of this type, a sensible precaution is to make sure that a mechanism is put in place for the independent valuation of any significant assets which will pass in kind to a beneficiary.