Gathering and Appraising Assets

If you are the administrator of an estate, you need to determine the value of an estate's tangible and intangible assets. While appraising intangible assets, such as bank accounts, bonds, mutual funds, life insurance face amount, annuities, stocks, limited partnership interests and retirement plan proceeds, is a bit more straightforward, you will have to conduct research (such as speaking with expert appraisal) to determine tangible assets. Tangible assets can include jewelry, cars, coins and personal possessions. In order to determine whether an asset is a tangible or intangible, keep in mind that "If you can touch or hold it, you're holding tangible property."

Some assets and properties can pass directly to your survivors without the probate process. But other assets that remain in your name will have to be distributed to heirs through the probate process. After you die, assets that remain in your name are transferred to your heir/beneficiary or trust according to your will or the laws of intestacy.

Appraising Intangible & Tangible Assets

The first step you must take before appraising assets is to compile a list of all of the assets. Refer to our list below:

Intangible Assets

  • Bank and brokerage accounts (send a letter to the bank explaining what you want along with a copy of the death certificate and your appointment as executor. Request the balance at the date of death.)
  • Stocks/Bonds/Mutual Funds (You will have to average the high and low costs for the date of death and then multiply by the size of holding)
  • After you have compiled a list of all of the intangible assets, use a calculator to add up the assets and determine what they were worth on the date of death

Tangible Assets

  • Real estate
  • Bank accounts that only hold cash
  • Furnishings
  • Jewelry
  • Cars
  • Boats
  • Collectibles/antiques
  • Artwork
  • After you have compiled a list of all of the tangible assets, use a calculator to add up the assets and determine what they were worth on the date of death

Should You Hire a Legal Expert & Appraiser?

Because this process can be complex, it is advised that you consider hiring a legal expert to assist you. Obtain written appraisals from an appraisal you can trust, sometimes paying the fee is worth it. You can also check online auctions, booksellers and other websites for the resources you need to appraise your items.

A personal representative is allowed to choose whether to use the date of death or the alternate valuation date. An alternate valuation date refers to the fair market value of all the assets included in a decedent's gross estate six months after his/her death. Why would you choose to go by the alternate valuation date? If one of more of the estate assets has lost a significant amount of value during the six months after death, then the estate tax bill can be lowered. When an alternate valuation date is used, however, all assets must be revalued.

Keep in mind that insufficient valuations can expose you to the risk that the IRS will revalue the property and assess additional taxes. You could also face significant penalties if the IRS finds that the value of property was grossly misstated. Taxpayers must adhere to the IRS Real Property Valuation Guidelines and an appraiser must follow specific appraisal guidelines.

Having accurate, supportable and well-documented valuations of assets is imperative during the estate administration process. Having an experienced, qualified and designated appraiser on your side can help take a lot of the estate administration burden off your back. Get an estate planning attorney on your side who can arrange to have your assets valued by a qualified appraiser!