San Diego Estate Planning Lawyer Blog
How much is your estate worth? Most of us don’t contemplate this question on a daily basis. But in California estate planning, determining the “market value” of your assets is critical. When a will is filed, the probate court needs to see an inventory of the assets you’ve left behind and their estimated value at the time of your death.
California has a unique system for appraising probate estates. In almost all cases, the court requires appointment of a probate referee, a person authorized by the State of California to appraise all real and personal property in an estate. All probate referees must pass a licensing exam administered by the California State Controller’s office and complete yearly continuing education requirements. The probate court in each county then appoints probate referees to serve a term of not more than four years.
When an executor opens a new estate, he or she must file a list (or inventory) of the estate’s assets with the probate court. The probate referee then must prepare an appraisal of within a 60-day period for all properties (excluding cash). The estate, not the court, pays the probate referee’s fees, which is 1/10 of 1% of the value of all appraised property. For example, if the probate referee appraises an estate where the only asset is a home valued at $500,000, the estate would owe the referee a fee of $500.
Appraisals Outside of Probate
If your estate planning includes a trust, you can also take advantage of the probate referee system, although it is not required by state law. Probate referees may conduct appraisals in trust and other non-probate matters, such as liquidation of businesses. One advantage of using a probate referee for a trust is the trustee is protected from any claims that assets were improperly valued. A probate referee’s appraisal is considered fair, impartial and accurate. Also, when engaging a probate referee outside of probate, their fees are negotiable.
There are alternatives to probate referees for non-probate appraisals. There are private appraisers who focus solely on real estate valuations. Like probate referees, real estate appraisers must be licensed by the state, in this case the California Office of Real Estate Appraisers. (Congress mandated the states license real estate appraisers in 1989; probate referees are exempt from this requirement.) There are different tiers of licensing based on an appraiser’s education and experience.
For appraisers of personal property, including furniture, jewelry or vehicles, there are no statewide licensing requirements. Instead private nonprofit groups like the International Society of Appraisers provide credentials and training. If your estate includes antiques or other collectibles, you should look for an appraiser who specializes in those types of items.
It’s always a good idea to know the current value of your assets before starting or revising an estate plan. Even though asset prices inevitably change over time, an appraisal can give you a good starting point to decide how to distribute your property after you’re gone. If you have any questions or concerns about the appraisal process, contact the Law Office of Scott C. Soady at 1-858-618-5510.