ESTATE PLANNING: Obtaining date of death values

2012-10-21T00:00:00Z ESTATE PLANNING: Obtaining date of death valuesChristopher W. Yugo Times Business Columnist nwitimes.com
October 21, 2012 12:00 am  • 

Q: After my parents die, I am the trustee of their trust. I know I have to have their property appraised. The home and the bank accounts will be easy to appraise, but what about the other property? How do I value the personal property and the stocks and bonds?

A: After a death, it is important to determine the date of death value of the decedent’s assets. Among other things, the date of death value will be used to determine the amount of inheritance tax due.

The real estate is easy to appraise. There are countless qualified appraisers out there that can provide you with an accurate date of death value.

The date of death value of bank accounts and CDs are also easily determined. The bank should be able to provide you with the values of the accounts. You might be tempted to rely on the bank statements for the account value and in some cases that may be enough. However, since a lot of bank products include accrued interest, determining that amount is best left to the bank.

Securities are a little more difficult. The value of publicly traded stocks fluctuates throughout the day and an exact value isn’t always easy to determine. To account for this fluctuation, you use the average of the stock’s high and the stock’s low on the date of death. Theoretically, that average should be an accurate valuation.

Bond’s are a little different. Determining the value of a bond can be difficult and it is best to get a valuation from a professional. A broker can generally provide you with the date of death value of a bond along with the accrued interest. In addition, there are services that you can hire that will provide you with the values that you require.

To obtain a valuation of the personal property, you will need to engage the services of a professional. Although not as prevalent as real estate appraisers, there are personal property appraisers who can provide you the valuation.

Sometimes you have an unusual item such as a coin or stamp collections or art work. In those situations you will need to track down someone who works in those areas. Fortunately we live close to Chicago and you should be able to find someone who can value anything from an ancient Roman coin to a cockatoo.

When you engage a professional, let them know what you are going to do with the appraisals. Appraisals are pretty subjective. Assigning a certain item a value that it could obtain on a really good day at a professional auction may not be the most accurate number to use. Let them know that it is for inheritance tax purposes and that selling the item quickly may be necessary. It might help determine a more accurate number.

Opinions are solely the writer's. Christopher W. Yugo is an attorney in Crown Point. Address questions to Yugo in care of The Times, 601 W. 45th Ave., Munster, IN 46321 or to Chrisyugolaw@gmail.com. Yugo’s information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate-planning specialist.

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