OC-Appaisals – Susan Sauer  714-328-3115   ssauer@cox.net   
 Orange County Expert in Estate and Date of Death Appraisals

Estate and Date of Death Appraisals

After the passing of a Loved One, the agonizing process of mourning the loss of someone very special, and the process of settling the estate, can be very difficult, for all the family members, and friends.   

Estate settlement is often stressful, but a very important job. As an executor or trustee you have been entrusted to carry out the wishes of the departed as promptly and respectfully as possible.

 I hope the guide below can help you understand the pressing issues and time sensitive concerns, for the Executor/Trustee.

 Obtaining an accurate date of death real estate appraisal is a critical step in the administration of an estate.  It ensures compliance with tax laws, facilitates equitable distribution among heirs, and supports informed financial decision making. Accurate appraisals not only fulfil legal requirements but also provide peace of mind to executors, heirs and all parties involved in the estate administration process.

 Why an Estate Appraisal Matters:

1)   The Appraisal Report: determines the Fair Market Value (FMV) for estate settlement or inheritance distribution

2)   Complies with IRS and state tax requirements

3)   Assists attorney, executors and heirs with transparent property valuations

4)   Helps prevent disputes and ensures equitable estate division.

5)   Estate Taxes: Determines the taxable value of the estate.

6)   Cost Basis: Establishes the new cost basis for heirs, affecting future capital gains

7)   Stepped-up basis changes the taxable value of inherited property by resetting it to the asset’s fair market value at the time of the previous owner death.

8)   When the beneficiary eventually sells or passes away, any taxable gain is calculated from this/these updated values, rather than the original purchase price.

9)   Probate Proceedings: accurate appraisals are necessary for the probate process, where the court oversees the administration of the estate. The Probate Court appraisals are drive by, with no contact with the beneficiary, so the actual condition/improvements are not known (as of the actual DOD) and the appraised value may be lower of higher, due to the lack of this information.

                                          
      The Appraisal Process:  Call Susan @ 714-328-3115 or click the email button at the top of the page

1)   Initial Consultation: Clarifying your needs: IRS/State Taxes, Probate Filing or Estate Distribution.

2)   Data Verification & Research: DOD, property address, condition of the improvements, schedule on-site or drive-by appointment.

3)   Market Research: Comparable Sales, market trend analysis (current or retrospective)

4)   Appraisal Report: detailed USPAP – compliant report, IRS, courts and trust administration.

 
A Date of Death (DOD) Appraisal is a specialized, retrospective valuation of real estate (and other assets), for the Fair Market Value (FMV), on the exact day the owner passed away, crucial for settling estates, probate and determining tax liabilities, like Capital Gains by establishing a new “Stepped-up” Basis for heirs, ensuring fairness and legal compliance, potentially minimizing capital gains tax if the property is sold at a later date.

The DOD Appraisal is ordered ~ 2-6 months, after the date of the original owner’s death. It is important that this FMV on the DOD, is based on the existing condition/improvements of the property at this date in time.

Don’t stress, if with the executor or trustee forgets to get a DOD appraisal done immediately, at OC-Appraisals, we have experience in doing retrospective DOD appraisals, from 2-20+ years after the DOD.  We just need know the condition/improvements as of the DOD (flooring, kitchen, counter tops, roof, HVAC, baths and flooring). Keep those old photos during this time period, they are a great resource for verifying the improvements from the past.

 
Fair Market Value (FMV):
Fair Market Value (FMV) is the given estimate for the value of a property based on knowledge, willingness and assessment of the buyer to an unpressured and willing seller in the open market.  An estimate of fair market value is generally subjective due to circumstances such as time, location, existence of precedents, and the assessment of principles of the buyer and seller. 

The selling price of a property is an indication of a reasonable fair market value.
The following criteria must be observed in the process of estate planning, valuation and selling.
1) The date of sale in the open market
2) Relevant facts known to both buyer and seller 
3) The purchase was between two distanced parties (willing seller & buyer)
4) No change has occurred in the market during sale date, purchase date or date of valuation

Call Susan @ OC-Appraisals  714-328-3115   email: ssauer@cox.net  see link at top of page