Estate Appraisals: Family Values
Estate appraisals determine the value of real estate.
When someone dies, an estate appraisal will need to be done on the real estate owned by the person who has died to figure out what their property is worth. This is important so that the person’s heirs receive what they are supposed to receive from the person’s estate.
The estate appraisal will also help to figure out what taxes are owed, which can be really complicated.
To value an estate, you need (at a minimum):
- A trusted member of the legal profession (aka, an Attorney)
- A good Certified Public Accountant (CPA)
- A Certified Real Estate Appraiser (a Certified Residential Appraiser)
A Date of Death Valuation for An Estate Appraisal
Estate Appraisals figure out the value of property as of a certain date, which is not usually the date that the appraisal is ordered. Instead, a date of death valuation will give the actual market value of the property as of the date of death of the owner(s).
The Executor: An Important and Exhausting Job
The Executor of an estate carries out the wishes of the deceased. This can be a hard job when the person’s heirs are not in agreement over how the estate should be divided.
Real Estate is a Major Asset
Real Estate is frequently one of the major assets that must to be handled as part of an estate.
A professional estate appraisal should be performed by a Certified Residential Real Estate Appraiser to determine the market value of the property. Because the date of death is usually different than the date that the appraisal is ordered, an historical appraisal (also called a retrospective appraisal) is the type of appraisal that can provide the value as of the date of the event in question – in this case, the date of death of the property owner.
Don’t Pay More Taxes Than Necessary
Because taxes can be a substantial part of the cost of settling an estate, it is critical to establish a Market Value that will stand up in court, i.e. that is defensible if it were to be challenged.
This Fair Market Value as of the date of death, should be substantiated with a detailed report (i.e. the estate appraisal) that provides the real market data and analysis that was used by the professional real estate appraiser to support the opinion of value.
Be Prepared for the Appraisal
In order to facilitate the appraisal of property as of a date in the past, you may need to provide records such as deeds, inspection records or photographs that can substantiate the condition of the property at the time the records were created. The appraiser will use this information as well as historical market data (such as sales in the Multiple Listing Service (MLS)) and construction data (cost to build) to determine the market value of the real estate as of the date required.