Estate Planning and Appraisals – Written by Gail Rubin
Many items within a household can affect the overall value of the estate. These items include art, jewelry, collectibles, antiques, musical instruments, and the house itself.
Appraisals provide a snapshot in time of each item’s value. This helps estate planning attorneys to accurately structure equitable distribution of assets as dictated by the client.
There are many forms of art: paintings made with watercolors, oil, acrylic, and mixed media; prints made by lithograph, screen printing, and other techniques; photography, ceramics, and sculptures constructed of many different materials. You may have never heard of the artist, but their work might be selling for big bucks. How can you tell if what you’ve collected, inherited, or are preparing to sell is worth a fortune or a pittance?
Turn to the experts at an established, reputable appraisal organization. They require members to adhere to a code of ethics, as well as the Uniform Standards of Professional Appraisal Practice. They charge an hourly rate, which can vary widely (i.e. $25 to more than $300/hour) depending on their experience and expertise.
It’s important to obtain current art appraisals for several reasons: to know the fair market value or replacement value for full insurance protection against loss or damage; for estate or divorce settlements; for charitable donation valuations; and for sellers who wish to know how to equitably price the artwork.
You may believe the jewelry you’ve inherited or plan to sell or insure is very expensive. Until you have a qualified jeweler examine and appraise each piece, you won’t know for sure. Make sure the appraiser is a professional qualified to appraise jewelry. They should be a graduate gemologist and affiliated with a national personal property appraisal organization.
Are the pearls natural or cultured? What’s the setting made of? How does the clarity, color and cut affect the price of gemstones? Is the gold 24K? Valuations can affect estate taxes if the jewelry is worth many thousands of dollars. Have the jeweler report on the cash value at today’s market rate. Then you’ll have an idea of an equitable selling price, or a starting point to insure the jewelry.
Appraising Musical Instruments
Musical instruments can be quite valuable, yet many people sell them for pennies on the dollar, often unknowingly. Consider the person who bought an $8,000 player piano for $250 at a yard sale. Guitars, brass horns, violins, banjos (yes, even the much-mocked banjo), and other instruments may be worth a lot more than you’d think. Or, you may over-value a mass-produced instrument.
The only way to know the value of a musical instrument, either for legal purposes such as insurance, divorce settlements or probate, or to establish a valid sale price, is to hire an informed appraiser. They will charge a fee to provide a written appraisal.
Collectibles can have monetary value, or perhaps just sentimental value. For those who collect images and items depicting their favorite animals, such as owls, frogs, turtles, elephants, etc., chances are, the value is sentimental.
Modern day collectibles such as vinyl record albums, Hummel ceramics, baseball cards, Pocket Dragons, and other items may have monetary value, or maybe not. With antique collections, such as clocks, irons, toys, prints, furniture, advertisements, glass, pottery, etc., you can start getting into real money.
How can you tell for sure? Take it to an expert who can verify its authenticity and establish value. But don’t rely solely on an expert who wants to buy your items, as they may offer a lowball price.
Appraising the House
Home appraisals provide an educated guess as to the actual value of your house. Banks and lenders need to know this figure to establish collateral value for a mortgage loan. If you’re selling the house, an appraisal provides a solid asking price. Appraisals also provide a starting point for obtaining a reverse mortgage, if you plan to stay in your house.
Appraisers will look at the conditions of a house’s exterior structure, interior materials and quality, amenities and upgrades, and the front and back yards. They can also do sales comparisons, also known as comps, to get prices on similar homes in your neighborhood and recent market trends in the area.
It takes time and money to get the latest appraisals on these valuable items. Don’t let your clients wait until someone dies to get this important part of an estate in order.
Watch Our Youtube Video on Estate Planning During COVID-19:
Did you enjoy reading, Estate Planning and Appraisals? Interested in learning more about this subject? Attend our upcoming estate planning webinars!
Join us for a free Trustee and Power of Attorney Training School Webinar, Medi-Cal Webinar, and/or Probate Webinar. Get registered today for our estate planning webinars!
This website is not intended to be a source of solicitation or legal advice. General information is made available for educational purposes only. The information on this blog is not an invitation for an attorney-client relationship, and website should not be used to substitute for obtaining legal advice from a licensed professional attorney in your state. Please call us at (626) 403-2292 if you wish to schedule an appointment for a legal consultation.
For more information about The Hayes Law Firm, visit our Google My Business page.
Thank you for reading, Estate Planning and Appraisals!