When a person passes away, their heirs and other family members are there to help settle the estate. This can be a complicated process, especially if the person has quite a few assets that need to be settled. An estate needs to have a valuation completed, but how is that done?
There are several steps that need to occur to determine the value of an estate. First, it is important to figure out what things will contribute to the value of the estate. These items may include property, bank accounts, life insurance, investments, cars, artwork, etc. A date of calculation needs to be determined. This date is usually the date of death.
The value of investment accounts should be added together based upon the type of account (individual, joint, etc.). The value of real property should be determined by using a licensed appraiser. The value of a jointly owned property is determined based on whether it is owned with a spouse or a joint tenant with rights of survivorship. The value of life insurance policies is included in an estate if the estate is a beneficiary. If there is a named beneficiary, then life insurance values are not included. All other property should receive a valuation based on blue book pricing and other valuations that may be necessary for special property, such as artwork.
After assets are added up, deductions may need to be made based on debts that are owed, including funeral expenses and attorney fees. Because estate valuation is a very important part of the probate process and can lead to family disagreements, an attorney who specializes in probate disputes can be a good resource for a family that is working through these issues.
Source: lawshelf.com, “The Gross Estate,” accessed on Dec. 31, 2017