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A certified valuer will listen to your situation and answer any questions you may have, at no cost.
A South Australian executor must be able to show every beneficiary how a family company, a trust interest or a loan to a relative was valued. We provide that figure at the correct date, from a valuer with no connection to any branch of the family, before anything is distributed.
Indicative valuations from A$799. Certified Summary and Detailed reports from seven business days.
A deceased estate valuation gives 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 where required. Adelaide executors rely on it to administer the estate, fix pre-CGT cost bases and respond to claims under the Inheritance (Family Provision) Act 1972 (SA).
Once the Supreme Court of South Australia grants probate or letters of administration, the executor or administrator holds the estate's assets and must account to the beneficiaries for each of them. Cash at the bank and listed shares price themselves. The assets that hold most of the value in a sizeable Adelaide estate rarely do: shares in a family company running a machining shop at Lonsdale, units in a trust that owns a vineyard in McLaren Vale, a half share in a Kent Town accounting partnership, or money lent years ago so a daughter could buy a house in Prospect. Each one needs a market value at a set date from someone who can show how it was reached.
A mistake falls on the executor personally rather than on the estate. Distribute on a figure that cannot be supported, let one sibling take the company below its worth, or keep no record of how a number was arrived at, and an aggrieved beneficiary can pursue the executor for the shortfall. The complaint tends to come late, often when a beneficiary learns what the business or the property fetched a year or two after the estate was wound up.
Families generally want the reverse: a prompt finish, the final returns lodged and nothing that looks like an avoidable cost. Measured against the disputes it prevents, a valuation is a modest line in the administration. A value fixed at the right date, before shares or a business change hands, costs far less than an amended ATO assessment, a rift between siblings or a family provision claim that feeds on the lack of any reliable number.
We act for executors, administrators and estate lawyers from the CBD and North Adelaide out to the Adelaide Hills, the Barossa and McLaren Vale, including estates where the Public Trustee (South Australia) or a trustee company holds the grant and wants an arm's length value on the file. We do not take instructions from an individual beneficiary, which is why every beneficiary, and the Court if it comes to that, can work from the same figure.
A certified valuer will listen to your situation and answer any questions you may have, at no cost.
Many estates need no formal valuation, and in those that do, usually only a handful of assets require one. The estate lawyer settles what forms part of the estate and the date each asset is measured at; the valuer then gives a defensible market value for the assets that have no visible price. The request typically arrives at one of four points.
The inventory, the accounts the executor gives the beneficiaries and any later claim all begin with what the deceased owned on the day of death and what it was worth. Shares in a private company, a partnership or trust interest, an operating business, real property, intellectual property, debts owed by relatives and collections each need a value fixed at that date.
A sale by the estate to a child, grandchild or sibling of the deceased has not been tested in the open market, so the price proves nothing on its own. A valuation obtained before the contract is signed answers any later claim that the asset went at an undervalue, and it is the evidence the ATO expects to see behind a price agreed between related parties.
Where one beneficiary takes the business or the company shares and the others take cash or the family home, comparing those portions shows whether the will is being carried out as intended. If values have shifted since the death, whether the division is even is judged at the date of distribution.
An application under the Inheritance (Family Provision) Act 1972 (SA) asks the Supreme Court of South Australia whether the deceased made adequate provision for the applicant's proper maintenance, education or advancement in life. The Court cannot answer that without knowing what the estate holds and what it is worth, so the valuation becomes expert evidence and has to meet the standard the Court expects.
Sort the assets for CGT first. Death does not usually trigger a capital gains tax liability on its own, but it fixes the cost base each beneficiary inherits. Where the deceased acquired an asset before 20 September 1985, the beneficiary's cost base is its market value at the date of death, so our figure decides the taxable gain on any future sale. Where the asset was acquired on or after that date, the deceased's cost base passes across and the date-of-death value serves the administration, not the tax calculation. The tax adviser places each asset in one group or the other, and the depth of our work follows.
The deceased may have run the family trust in every practical sense, as appointor, as a director of the corporate trustee and as the person who made each decision, yet a discretionary beneficiary owns none of the trust's property. The estate may hold only the shares in the trustee company or the power to appoint a successor, not the Glenelg rental or the trading business inside the trust. Treating trust assets as estate assets is among the most expensive errors we encounter, and the estate lawyer should settle the point before the valuation is scoped.
The standard is market value: the price a willing, informed buyer and a willing, informed seller, neither under compulsion, would agree at arm's length on the valuation date. A private company or trading business is normally valued mainly through the income approach, capitalising the earnings it can maintain once its accounts are normalised. The market approach tests that result against sales of comparable businesses, and the asset approach sets the floor and leads for entities that mostly hold property or investments, or that are to be wound up rather than sold.
Estates raise two problems of their own. The first is a business that has lost its principal. If the deceased was the specialist whose patients came to a day surgery near the Royal Adelaide Hospital, the senior partner whose clients kept a Kent Town practice busy, or the licensed builder behind a Salisbury construction company, part of the earnings ended with them. We separate the goodwill that remains with staff, systems, contracts and premises from the goodwill that left with the person, and value what remained at the date of death on what was known or reasonably foreseeable then. Later trading shows what was foreseeable; it is no licence to value with hindsight.
The second concerns a minority parcel of shares in a family company. Sold to an outsider, a 25 per cent parcel with no say in management and no ready market would normally carry a discount. Passed to the sister who already owns the other 75 per cent, it gives her complete control and most of the case for a discount falls away. The report gives both figures with reasons and leaves the choice to the executor and the estate lawyer. Where a shareholders' agreement fixes a price on death, that clause may govern what the estate receives, but it does not turn the price into market value for the ATO, so both figures may be required.
When an estate reaches us already in trouble, the cause is usually one of these.
Match the report to its readers and to how likely they are to challenge it. An estate administered by the Public Trustee (South Australia) with every beneficiary in agreement needs a lighter document than one defending a family provision claim in the Supreme Court of South Australia.
Every report records the valuation date, the standard of value, the documents relied on and the assumptions made. It then covers the approaches considered, the adjustments to the accounts, the treatment of goodwill that was personal to the deceased, any discount for a minority or illiquid interest, and how the approaches were reconciled into one value. Where two figures are needed, such as pro rata and discounted values, or a contract price beside market value, the report gives both and explains each so the executor and the estate lawyer apply the right one.
In a contested estate the report is prepared to comply with the expert evidence rules of the Supreme Court of South Australia, under which an expert's duty to assist the Court comes ahead of any duty to the party paying the fee. A report that both sides can read as balanced carries more weight than one written to win. Where each side has its own expert, the certified valuer who signed the report will confer with the other expert, contribute to a joint statement of what is agreed and what is not, and give evidence if required. Most estates settle well before a hearing, usually because a credible figure was produced early.
If a beneficiary takes this distribution to the Supreme Court of South Australia in a few years, which document will show how each value was reached? If the honest answer is a 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.