Estate Settlement or “Date of Death” Appraisals (Sacramento Region)

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.

http://www.lundquistcompany.com/blog Estate Settlement Real Estate Appraisals (Sacramento Region)

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