Category — Estate Settlement
Dealing with logistics and paperwork after a loved one passes is not something anyone looks forward to doing, and ordering an appraisal is definitely a part of that. If you are in a situation where a loved one passed away, and you need an appraisal for the IRS (for tax purposes), here are five things to provide to the appraiser. I hope this is helpful.
5 things to provide for the appraiser:
- When was the date of death? (The appraiser will provide a valuation based on this date even though it’s a date in the past. This is called a retrospective appraisal).
- Who is your attorney or CPA? (In addition to the IRS, your CPA or attorney will usually be listed as a user of the appraisal report – unless that’s not relevant).
- Has anything changed about the house since the date of death? (The appraiser will be considering the condition of the property on the date of death, and therefore ignore any change in condition, upgrades or changes in the market since that date).
- When do you need the appraisal?
- When is a convenient time for the appraiser to do an inspection? (expect an interior and exterior inspection).
Tips for hiring an appraiser: If you’re wondering how to hire a reliable appraiser, you may want to ask a trusted real estate agent for a referral or ask an appraiser the following questions to help gauge if the appraiser is familiar with your neighborhood or not.
- How long have you been an appraiser? Tell me about your experience.
- Are you familiar with my neighborhood market?
- How many appraisals have you done in my neighborhood over the past year?
- How familiar are you with “Date of Death” appraisals?
- How much do you charge?
- When can I expect the appraisal to be delivered?
- Will you deliver by mail or email?
Helpful Articles: You may also be interested to read What are ”Date of Death” Appraisals? or When Should you order a Date of Death Appraisal? for further information. Pay close attention to the “Alternative Valuation Date” in the latter article in case you think the market has declined in value after six months of the death of the owner (This could help your situation if value is lower since the IRS allows you to use the lower value).
Do you have any questions or scenarios to share?
If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Twitter, subscribe to posts by email or “like” my page on Facebook
August 30, 2012 No Comments
When an estate has a transfer of ownership due to death or inheritance, a home owner will need to eventually hire a real estate appraiser in order to show the IRS what the reasonable worth of the estate is. So the owner or heir will obtain a “Date of Death” appraisal, which is an appraised value as of the date of the death of the deceased owner. These appraisals are very commonly ordered within several months of the death of a loved one, but there are three things to consider before ordering the appraisal:
1) Timeline: If your loved one passed away recently and you need to file your taxes very soon, it makes good sense to obtain an appraisal in a timely manner so you can communicate well with the IRS. In other words, if your loved one passed away within six months before you file your taxes, it would likely be prudent to order the “Date of Death” (DOD) appraisal within that timeframe. This is the most common scenario I encounter for the bulk of my estate appraisal workload.
2) Alternative Valuation Date: I mentioned the Date of Death (DOD) appraisal already, but the IRS has also made allowances for a home owner to obtain an Alternative Valuation Date (AVD) six months after the date of death of the owner. Basically, if the market has declined in value after six months since the date of death, you can use the appraised value six months later to show your estate has decreased in value over time due to market circumstances. In this option you would need two appraisals, both a DOD and AVD. If the market has been hit hard, this could be a huge advantage for you for tax purposes. Granted, you would pay for two appraisals (use the same appaiser), but the savings in light of a large decline should far outweigh the cost of the appraisals.
3) CPA / Attorney Advice: Make sure to carefully weigh your options and the implications of using a DOD or AVD appraisal. You should definitely consult with your CPA and/or attorney to talk through which options would be most beneficial for you depending on your plans for the property and the implications for taxation based on using a DOD or AVD.
I am familiar with the estate planning appraisal process, IRS guidelines for appraisals, and I also run an estate appraisal website. Please contact me with any questions. I am always very glad to help answer questions and meet a need for property owners in what is often a difficult time of life.
January 25, 2012 No Comments
Settling an estate is one of those things that many of us don’t know much about until we actually experience personally. If you are in a situation where a loved one has passed or you recently inherited a property, I hope this information will help give you some insight into the process of estate planning as it pertains to real estate appraisals.
How it Works: 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. Typically a family member or heir chooses an appraiser for the job at hand, or an attorney or accountant will order the appraisal.
Estate or probate appraisals are commonly ordered between 2-6 months of the death of a loved one (or inheritance of property). Sometimes the appraisal is ordered right away within two weeks, while other times there is a much more substantial time period.
Retrospective Value: In estate planning situations it is common for the appraiser to perform a ”retrospective appraisal”, meaning that even though the property might be inspected today, it isn’t valued off of today’s date, but instead based upon a previous date (usually the date of death of the owner of the property, hence the term “date of death” appraisal). For example, if an owner of a property passed away on October 12, 2010 and the current date is March 23, 2011, the appraiser would inspect the property today, but the value conclusion would be based on what the market was doing on October 12, 2010. For example, the two estate appraisals on my desk right now were inspected very recently and their respective value dates are 4-6 months ago.
Other Types of Value: In addition to needing a retrospective value during the estate planning or probate process, sometimes the ordering party will also request a current “as is” market value or value based upon the date the title transferred from the deceased to the heir (if the transfer was after the date of death). In these cases there are really two appraisals being done since there are two separate values issued. Most of the time only one appraisal is needed though, but every situation is unique and it all depends on the particular needs of the estate.
The Good News: If you are in a situation like this or expect to be soon, take assurance that the type of value is not something you have to spend time worrying about. There is no cause for alarm or worry at all. A good attorney or accountant can help direct you toward the type of value needed for your estate, and a company like mine already knows what questions to ask you. Your circumstances may be very difficult understandably, so the hope is that at least the professionals around you can help to smooth over some of the details like this so you don’t have to think too much about them.
If you have any questions about the estate or probate process in the Greater Sacramento Region, feel free to contact me at 916.595.3735, ryan@LundquistCompany.com or visit our appraisal or estate settlement website.
March 24, 2011 9 Comments
When an estate has a transfer of ownership due to death, it is very common for a real estate appraisal to be needed for tax and/or inheritance purposes. Sometimes an attorney or accountant will order an appraisal during such a circumstance or most typically have a family member or heir choose an appraiser for the job at hand.
Estate settlement or “Date of Death” appraisals are something we specialize in, and we work well with home owners in what can be a difficult time in life. Our goal is to provide a reliable appraisal in a timely manner and make the appraisal process as smooth as possible. We serve property owners and attorneys in the Greater Sacramento Region with the following counties: Sacramento, Placer, Yolo, El Dorado, San Joaquin, Stanislaus, Merced, Solano, Yuba and Sutter.
Contact Lundquist Appraisal Company at 916-595-3735, info@LundquistCompany.com or www.LundquistCompany.com for additional information or any questions. We hope to be in touch soon and to assist you if it is relevant for your needs. Thank you.
www.SacramentoAppraisalBlog.com Sacramento Region Estate Settlement Appraisals: Who Can You Hire in Your Time of Need?
August 14, 2009 1 Comment
Whenever title transfers on a deed, a real estate appraisal is usually needed. Situations like the death of a loved one, inheritance of property, divorce, refinance, estate settlement, and buyout of other persons on title warrant a credible real estate appraisal so that decisions can be made about the property.
Tips for Hiring an Appraiser for a Title Transfer Situation:
- Make sure the appraiser knows the real estate market where the property is located. This is key toward producing a reliable appraisal. It’s okay to ask the appraiser questions about his/her experience.
- Help the appraiser understand why the appraisal is needed. Did you inherit property? Are your elderly parents moving and title is transferring to you? Was there a death in the family? Is there a divorce or break-up in progress? The appraiser is bound to confidentiality and cannot by law share your situation with others.
- Inform the appraiser what type of value is needed. An experienced appraiser will be able to easily figure this out with you in just a couple of minutes of conversation. Is this a market value as of today’s date or do you need an appraisal based upon a previous date? For example, in estate settlement appraisals, it is common for the appraisal to be based upon the date which title was transferred in the past or the date of death of the loved one. This is called a “retrospective value”.
- If you are a home owner working with an attorney and it would be easiest on you for the appraiser to work directly with the attorney, that’s definitely doable. I see it work out either way and I defer to whatever the client needs and prefers.
- Remember that the lowest-priced fees for appraisals usually produce the lowest-quality of work (my fees are very reasonable). The last thing you want is for an unreliable appraisal to get in the way of what you are trying to accomplish with a transfer of title.
If you have any questions about the information above or would like to talk more, feel free to call me at 916-595-3735, see my company website at www.lundquistcompany.com or email me at ryan [at] lundquistcompany [dot] com. I am available to help you in your time of need and I am glad to speak with you about your situation.
April 14, 2009 No Comments
This is one of those things that many of us may not know much about until we actually experience personally. My hope in this entry is to offer a bit of insight into the process of estate settlement as it pertains to real estate valuation.
How it Works: When an estate has a transfer of ownership due to death, it is very common for a real estate appraisal to be needed for tax and/or inheritance purposes. Typically an attorney or accountant will order an appraisal during such a circumstance or have a family member or heir choose an appraiser for the job at hand.
Retrospective Value: In these instances it is fairly typical for the appraiser to perform a ”retrospective appraisal”, meaning that even though the property is inspected today, the property isn’t valued off of today’s date, but is instead based upon a previous date (usually the date of death of the owner of the property). For example, if an owner of a property passed away on May 16, 2008 and the current date is March 2, 2009, the appraiser would inspect the property today but then base the value on what the market was doing on May 16, 2008.
Retrospective appraisals can be challenging in that the appraiser needs to decipher the trends and perceptions of market participants in a previous time period instead of whatever is happening right now (which could be completely different). In a market like today, if much time has elapsed since the death of the property owner, the difference between the retrospective value and today’s current value can be striking, huh.
Other Types of Value: In addition to needing a retrospective value in situations like this, sometimes the ordering party will also request a current “as is” fair market value or value based upon the date the title transferred from the deceased to the heir (if the transfer was after the date of death). Remember, every situation is unique and the type of appraised value required all depends on the particular needs of the estate.
The Good News: If you are in a situation like this or expect to be soon, take assurance that the type of value is not something you have to spend time worrying about. A good attorney or accountant can help direct you toward the type of value they need for your estate. And a good appraiser will know to contact the attorney or accountant to clarify exactly what is necessary in case the owner or heir is not exactly clear. Your circumstances may be very difficult understandably, so the hope is that at least the professionals around you can help to smooth over some of the details like this so you don’t have to think too much about them.
I am available for any questions at 916-595-3735.
March 3, 2009 2 Comments