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Putting the right value on one’s property

On Behalf of | Jul 14, 2018 | Probate Litigation

Often overlooked, one of the steps in the probate or trust administration is the act of putting a value on the property that is part of the estate or in the trust. How much a piece of property was worth at the time of a person’s death can have huge implications with respect to taxes and other things.

In fact, the value of property is common dispute that can lead to probate litigation either between the heirs and will executor or trustee or between the beneficiaries and a taxing authority. Should litigation emerge from either quarter, it is important for those involved to understand the basics of how one arrives at the value of property in the estate.

At least for federal estate tax purposes, an administrator can elect to value the property of the estate using one of two dates, either the day the person died or the day six months after the person died. Which option is best is a case specific question best discussed with an attorney or accountant.

For all estates, however, an administrator is going to have to get a value on every item that is in the estate or trust. Depending on applicable tax laws, this could include even jointly held accounts, stocks and the like that are not subject to the probate process and are not part of a trust.

Generally speaking, getting a value on a bank account or other investment with a definite cash value on a given day is a matter of getting documentation of what the value was when the person died. Getting a value on stocks that a person held directly is also a rather simple calculation based on a formula.

Other items, like real estate, cars, valuable personal effects, and the like will be appraised unless the better course of action is to sell them. For some items of property, like a car or house, an administrator or heir may be able to ballpark how much the property is worth.

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