Estate Appraisal – Date of Death – And Why It’s Necessary

We specialize in “date of death” appraisals and work well with property owners in what can be a difficult time.

A real estate appraisal for date of death serves several important purposes in both estate planning and administration. Here are some reasons why obtaining a real estate appraisal for date of death is beneficial:

1. Establishing Fair Market Value: The primary reason for obtaining a real estate appraisal for date of death is to determine the fair market value of the property as of the date of the owner’s death. This valuation is crucial for estate tax purposes and helps determine the value of the decedent’s estate. It ensures that the correct amount of estate taxes is paid based on the property’s value at the time of the owner’s passing.
2. Stepped-Up Basis for Heirs: The date of death appraisal establishes the stepped-up basis for inherited real estate. When a property is inherited, its tax basis is “stepped up” to its fair market value at the date of death. This stepped-up basis is essential for calculating capital gains taxes when the heirs sell the property in the future. A date of death appraisal helps establish this basis, which can potentially reduce capital gains taxes for the heirs.
3. Estate Planning and Distribution: A real estate appraisal can provide valuable information for estate planning purposes. It helps the owner understand the value of their real estate assets, which can guide decisions on estate distribution, gifting, or establishing trusts. It ensures that the owner’s wishes are reflected accurately and can help minimize potential conflicts among beneficiaries during estate administration.
4. Resolving Disputes: In some cases, disputes may arise among beneficiaries or heirs regarding the value of real estate assets. A date of death appraisal provides an independent and unbiased assessment of the property’s value, which can help resolve conflicts and ensure a fair distribution of assets.

It’s important to note that the specific requirements for date of death appraisals may vary depending on the jurisdiction and the purpose of the appraisal. Consulting with a qualified tax professional who is knowledgeable about estate tax laws and regulations in your area is advisable to ensure compliance and accuracy in the valuation process.

Paula Saling, founder of Bay Area Real Estate Appraisal, has over 30 years of experience and is extremely knowledgeable about Estate Appraisal concerning date of death.