Appraisals are typically conducted by certified Appraisers who are experts in valuing different types of assets of a deceased person's Estate. They use recognized valuation methods and principles to arrive at fair and accurate estimates of asset values.
Their expertise is crucial in ensuring that a deceased person's assets are appropriately valued, which, in turn, facilitates a smooth Estate Administration and the fulfillment of the deceased person's wishes or legal requirements.
An appraisal of a deceased person's estate is necessary for several reasons:
Asset Valuation: An appraisal provides an accurate and unbiased assessment of the value of the assets within the estate. This includes real estate, personal property, investments, jewelry, collectibles, artwork, and other items of value.
Estate Inventory: Executors or administrators of the estate must compile a comprehensive Inventory of the deceased person's assets. An appraisal helps create a detailed list of assets, including their estimated values, which is essential for Probate and Distribution purposes.
Estate Taxation: In many jurisdictions, estates above a certain value are subject to Estate Taxes. Accurate asset valuation is crucial for calculating the estate's potential tax liability. Appraisals help ensure that the estate pays the appropriate amount of taxes based on the fair market values of the assets.
Distribution to Beneficiaries: Appraisals assist in the equitable distribution of assets to Surviving Family members, Heirs, or other Beneficiaries. When there are multiple beneficiaries, knowing the value of each asset helps ensure a fair division.
Sale of Assets: Some assets in the estate may need to be sold to cover Debts, expenses, or to distribute funds to beneficiaries. Appraisals provide guidance on setting appropriate sale prices for these assets.
Court Proceedings: In cases where there are disputes among beneficiaries, Creditors, or other parties regarding the value of assets, appraisals provide an objective and professional assessment that can help resolve such disputes.
Asset Protection: Appraisals can help protect the estate from undervaluation, which could lead to tax penalties or legal challenges. They provide documentation of the estate's true value.
Insurance Purposes: In some cases, appraisals are needed for insurance purposes to determine the value of assets that were insured by the deceased person.