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Appraisals in Estate Planning

An appraisal is a professional’s estimate of the value of one’s property. The item to be appraised can be a small item like a piece of jewelry or something larger, like a residence or office building. Appraisals play a role in various aspects of estate plannng.

When someone dies with a will, the person designated as the executor will petition the Probate Court to administer the estate. When someone dies without a will, there is also a Probate opened and a family member or friend of the decedent is appointed the administrator of the estate. In both cases, the personal representative (executor or administrator) must file and Inventory and Appraisal describing all the assets and placing a value on them. Then a probate referee appraises all of the assets as of the date of death. Real property is appraised, personal property is appraised, and other assets are valued. Different types of assets may require appraisers with different expertise. For example, if the estate contains valuable artwork, an appraiser experienced in that type of art will be used to do the appraisal. Antiques also require a special appraiser as do coin collections, stamp collections, and other collectibles.

When a person dies with a trust, their trustee will be administering the trust and distributing the assets to the beneficiaries. Appraisals may also be necessary. The Trustor’s real property has to be appraised as of the date of death and similar to probate administration, jewelry, artwork, collections, and personal property and household furnishings have to be valued and sometimes requires appraisers of various types. Assets such as checking accounts, savings accounts, stocks, mutual funds, and other investments are valued at whatever their value was as of the date of death.

Sometimes married couples have trusts known as A/B trusts, marital deduction trusts, by pass trusts or other types whose common characteristic is that the trust must divide into two or more trusts after the death of the first spouse. All of the trust assets have to be appraised and valued and then allocated into one trust or the other.

Other situations where appraisals may be necessary are for federal estate tax returns or gift returns. The IRS may require appraisal reports to support values claimed on estate or gift tax returns. Also in conservatorships, once someone has been appointed as conservator of a person’s estate, he must file an Inventory and Appraisal similar to that required in probate.

The estate planning attorneys at Scott C. Soady, A Professional Corporation can assist you with finding the right appraiser for whatever type of property has to be appraised in probate or trust administration or for a conservatorship. Call us for more information.

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