After the personal representative collects all of the assets in the estate, it is important to obtain accurate property valuations. There are many different types of assets that make up an estate, and each asset must be considered during the property valuation. The personal representative will consult the list of all the assets and establish a value for each item on the list. Types of property that need to be valued will often include real estate, insurance policies, bank accounts, stocks and bonds, securities, and personal property.
Determining the value of all the property in the estate is important for several reasons. The total value of the estate often determines the way probate can proceed. For example, an estate with relatively low property valuation may be divided and settled much more quickly. However, that isn’t always the case.
Property valuation is important for other reasons as well. The value of each asset may help determine how the estate is divided as a whole. Additionally, accurate property valuation is necessary for tax purposes. If the property is valued too high, then the estate will end up paying more taxes than it needs to. If the property is valued too low, then the personal representative may end up being responsible for any resulting tax penalties.
When determining the value of an asset, the fair market value at the time of death is the guiding principle. There are many different ways to calculate the fair market value depending on the type of property that is being valued. For example, in the case of securities, the fair market value is the mean of the lowest and highest selling prices from the valuation date. Valuation can become even more complex in the event that the market was closed when the decedent died.
It is often necessary to have personal property and real estate appraised in order to arrive at the fair market value. A qualified probate attorney can typically recommend a respected appraiser. Depending on the type of property involved, more than one appraiser may be necessary.
Once the entire estate has been valued, the personal representative will file the inventory of assets with the courts. Having an accurate inventory is absolutely essential during the filing process. This inventory becomes the basis for the rest of the probate process, so any mistakes will end up being crucial. Working with an experienced probate lawyer can help ensure the accuracy of the estate inventory.
Getting accurate property valuation requires careful attention to details, and the right professionals. If you are involved in the probate process in Minnesota, our lawyers are here to help you with property valuation. We will make sure you understand the value of all the property in the estate and involve the right experts and documents. Contact the Brown Law Offices, P.A. at 763-323-6555 for a free consultation.
Find out more about probate in Minnesota by reading Probate Process Step 6: Tax Payments