Valuation of liabilities

When valuing the estate, you will need to take account of all debts and other liabilities owed by the deceased person. 

Debts are legally enforceable amounts owed whilst other liabilities include amounts the person was responsible for paying, for example; the gas bill or the bill for the decorator who had completed some work before the person died but hadn’t been paid.

Most debts and other liabilities should be reasonably easy to ascertain but you will need to review thoroughly the person’s paperwork and contact appropriate people to ensure that all liabilities are included.

You should note that professional fees incurred when dealing with the estate are not deductible as a liability in valuing the estate. You will be able to claim these back from the estate at a later stage.

Household bills

You should contact the deceased person’s utility companies (electricity, gas, water and telephone) and ask for final bills. Direct debits need to be cancelled or transferred into a new name.

Council tax bill

You should inform the local authority of the death. If there’s money owing in council tax this is a liability. Conversely, if the council tax bill was paid in advance there will be a refund due which needs to be added to the assets of the estate.

Overdrafts and loans

You should speak to the deceased person’s bank regarding any overdrafts and loans.

Personal loans

You will need to speak to any loan companies and ask for a final statement.

Credit card and charge cards

You need to ensure that you locate all the statements for credit cards and shop charge cards and then contact the providers.

Personal debts owed to family members and friends

You should check with family members and friends whether there are any personal debts outstanding. Only debts that are legally enforceable can be included. Evidence must be provided, either of a written or verbal agreement detailing the repayment terms, or that the person who has died was making repayments.


If there is a mortgage on a property, you should inform the loan provider of the death. You need to deduct the mortgaged amount against the value of the property.

If the mortgage is larger than the value of the property, the excess amount of the mortgage needs to be included as a liability.

If the mortgage is in joint names, you only deduct the deceased person’s share.

Hire purchase agreements

You should include the debt on any outstanding hire purchase agreement. Incidentally, the value of the asset also needs to be included in the valuation of the estate.

Cheques not cashed

If the deceased person wrote any cheques that weren’t cashed before they died, these are deductible. However, cheques written as gifts but not cashed must be ignored.

Gambling debts

You should check if the deceased person had any gambling debts. In England, Wales and Scotland these can be included provided that they are legal gambling debts. In Northern Ireland, no gambling debts may be included.

Guarantee for someone else’s debt

You should check if the deceased guaranteed anyone else’s debts. If the other person can repay the loan then the debt can be ignored. If they can’t, or only partially, then you will need to treat the guarantee, or at least part of it, as a liability.

Funeral costs

You are allowed to include the funeral bill and ‘a reasonable amount for mourning expenses’ as liabilities. HM Revenue & Customs gives the following examples of mourning expenses; ‘flowers, refreshments for mourners, expenses paid by the executor or administrator when arranging the funeral, a headstone to mark the grave.’

Please note

The information which we provide through Lasting Post is in outline for information or educational purposes only. The information is not a substitute for the professional judgment of a solicitor, accountant or other professional adviser. We cannot guarantee that information provided by Lasting Post will meet your individual needs, as this will very much depend on your individual circumstances. You should therefore use the information only as a starting point for your enquiries.