Why Do I Need an Appraisal After the Death of a Loved One?

Settling an estate can be difficult, especially in the wake of a loved one’s death. TCO APPRAISALS is here to offer you a bit of insight into the process of estate settlement as it pertains to real estate appraisals. When an estate has a transfer of ownership due to death or inheritance, it is very common for a real estate appraisal to be needed for tax purposes. Estate appraisals are generally ordered between two and six months after the death of the property’s owner, depending on the circumstances.

Retrospective appraisals are also fairly common in estate settlement situations and involve appraising a home based on a prior date which is typically the deceased owner’s date of death. Because of this, estate appraisals are often referred to as ‘date of death’ appraisals. A ‘current value’ appraisal may also be ordered in addition to a retrospective or date of death appraisal during the settlement process to determine the current market value of the property for the purposes of sale or settlement between the heirs.

Regardless of your appraisal needs or time table, TCO APPRAISALS understands the complexities involved in assessing the value of a property under these difficult circumstances. We work with attorneys, Certified Public Accountants (CPAs) and other financial professionals to service your needs.

What Type of Appraisal Do I Need After a Loved One’s Death?

We recommend you consult with an attorney, Certified Public Accountant (CPA) or another financial professional specific to your circumstances.  Depending upon your situation they may advise you to get an appraisal.  The types of estate appraisals include:

1. Estate Tax

An appraisal may be required by the Internal Revenue Service (IRS) and/or the State of California. If the total estate is over a certain value threshold, then everything within the estate (including the property) must be appraised and valued at the date of death.

2. Equitable Distribution

When there is more than one heir it may be necessary to equally divide up items from the estate. This may require an appraisal of the total estate contents or a specific list of items

3. Establish a Basis

In preparation for death, some property owners will have a value assessment of the estate from a specific point in time. This can provide a benchmark so that the basis can be stepped up to the current value as of the date of death more quickly.

4. Probate

The probate court will require an inventory and appraisal of the estate assets

5. Trust Inventory

In California, the majority of estates are part of an established trust. An inventory and appraisal of the estate will establish the value of the property at the time it became subject to the trust.

6. Estate Planning

Planning for the future of an estate or collection is also important and can be done preemptively. An appraisal can provide a valuable tool so that owners can plan in advance for tax, distribution or donation of the estate. It can also provide peace of mind for collectors to know how their treasured objects will be handled after they have passed.

Why Choose TCO APPRAISALS?

TCO APPRAISALS has a team of certified residential appraisers with years of experience appraising property in the San Diego area.  We are passionate about providing our clients with a detailed and credible value of each property. We know the appraisal industry and maintain a fast turnaround, personalized service and a competitive pricing system. No matter your need for an appraisal, the professional and experienced appraisers at TCO APPRAISALS can offer our expert services.

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What Is Fair Market Value in California?

In California, the appropriate level of value is Fair Market Value. Fair Market Value is set forth in IRS Treasury Regulation 20.2031-1 which states that,

“The Fair Market Value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell, and both having reasonable knowledge of relevant facts.

The Fair Market Value of a particular item of property includible in a decedent’s gross estate is not to be determined by a forced sale price.  Nor is the Fair Market Value of an item of property to be determined by the sale price of an item in a market other than that in which such an item is most commonly sold to the public, taking into account the location of the item wherever appropriate.”

Fair Market Value ensures you receive the right valuation for your estate for selling and tax purposes.