How To Value Items at Death – If you’re the executor of an estate, part of your job is to oversee the valuation of assets. Finding out how much the estate is worth and how that value is distributed will determine your approach to probate, the allocation of the assets among the heirs and how much the estate will pay in taxes. Particularly with larger estates, valuation can be a substantial responsibility. It may require you to bring in experts to value antiques and other collectibles.
If the estate is undergoing probate, you’ll need to submit the asset values to the court. Probate rules for estate valuation vary somewhat by state. In some states, courts look at gross estate value; in others, at net estate value. Some have separate rules for smaller estates. While all personal property is probated in the decedent’s home state, real estate is probated in the state in which it’s located. Some assets, such as 401(k)s that have beneficiary designations, normally bypass probate.
Expect to be challenged — by the IRS, by heirs, by creditors or by the court — whenever you value assets. Be sure you’re valuing everything reasonably.
Certain types of assets are easy to value. The contents of a bank account or shares of stock in a publicly traded company won’t give you any trouble. To value a stock, commodity or precious metal, average the highest and lowest selling price for similar items on the owner’s date of death. For mutual funds, use the closing valuation.
Other assets — a used car or collectible, for example — don’t have such a definitive value. You estimate their value by using public references, such as Kovel’s for collectibles. When valuing real estate, you can check out the tax assessor’s valuation and talk to a real estate agent about sales of comparable properties.
Go with the pros
For assets that are really difficult to value, like artwork or a private business, you’ll probably need to hire a professional appraiser. Appraisers typically charge from $125 to $400 an hour, often with an extra charge for visiting the site. Avoid appraisers who charge based on a percentage of the asset’s value. This goes against the ethics of the Uniform Standards of Professional Appraisal Practice.
Ask whether the appraiser has any certifications or memberships in professional organizations, and ask for a written estimate of the appraisal fee in advance. Books, tools and appliances are among the items that can be listed as household contents, and you can ask for one overall valuation estimate for them. If there are individual items that were specifically bequeathed in the will, you may want to get an individual appraisal for each. The value of household items should be done based on what a buyer would pay for the items as is.
The heirs may decide to sell everything in an estate sale. In that case, use a reputable estate sale company. Descriptions and values should be seen as general guidelines because there are variations in quality and condition as well as changes in economic conditions and local demand.
As you proceed with the valuation, be aware of the pitfalls. Heirs may be upset if a particular asset doesn’t realize the value they expected. Document your work in case there are questions later, and work closely with legal and financial professionals as you move forward.
Did you enjoy reading, How To Value Items at Death?
Interested in learning more about this subject? Attend our upcoming estate planning webinars!
Have You Properly Protected Your Loved Ones? (FREE Estate Planning Workshop), 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.
Thanks for reading, How To Value Items at Death!
- Clawing Back Assets After Probate - June 3, 2023
- How to Create a Business Succession Plan - June 2, 2023
- IRS Announces HSA Limits for 2024 - June 1, 2023
The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.