San Diego Estate Planning Lawyer Blog
When someone dies, either with a will or a trust, the assets owned by the decedent have to be valued to determine the fair market value. The date used for valuation of assets is usually the date of death. Sometimes the document, whether a will or a trust, will provide that another date can be used such as 6 months from the date of death. The important thing is that the date is consistent for all of the assets.
Assets that have to be valued can be real property, personal property, investments, bank accounts, IRAs, pension and retirement plans, stocks, bonds, mineral rights, and business interests. Some of these may not be trust assets but still have to be valued if there is going to be an issue with estate taxes. For example, assets held in joint tenancy may not be subject to probate or trust administration, but they still have to be valued for estate tax purposes.
Property such as real property is valued by obtaining a written appraisal by a licensed experienced professional appraiser. The appraisal should include descriptions and photos of the subject property, comparable sales, and a determination of value. Sometimes real property can also include having to appraise personal property as well such as farm equipment, livestock, crops, etc. or in the case of a professional building, the value of equipment and trade fixtures.
The value of personal property also is determined by an appraisal. For household furnishings, the IRS requires an itemized list of the furniture values. Items of jewelry or art should also be appraised by someone experienced in jewelry appraisals such as a gemologist or an appraiser that works in the art field. Other personal property that may need to be appraised may be automobiles, planes, or collections such as coins or stamps.
A business such as a family run business, a professional corporation, or a limited partnership also has to be appraised. Specialized appraisers may have to be retained to value the fair market value of the business and the decedent’s interest in the business.
For stocks and bonds that have to be valued, their value on the date of death can be determined by the average selling price of the stock or bond on the date of death. Mutual funds can also be valued using the bid value or public redemption price of the fund on the date of death.
Bank accounts can be valued as of the date of death by bank statements.
Valuing assets can be a tricky and time consuming task requiring experienced consultants and an experienced estate planning attorney. We can assist with this task at Scott C. Soady, A Professional Corporation.
Call us if we can help.