Disclaimer: This article is for educational purposes only and does not constitute legal advice. Always consult a qualified attorney in Alabama for guidance on your specific situation.
Detailed Answer
In Alabama probate proceedings, the personal representative (executor or administrator) must file an inventory and appraisal of the decedent’s personal property. The valuation must reflect the fair market value (FMV) as of the decedent’s date of death. Alabama law governing this requirement is found at Ala. Code § 43-2-160, which directs the probate court to appoint disinterested appraisers to determine the value of all personal property in the estate. Ala. Code § 43-2-160
What Is Fair Market Value?
Fair market value is the price at which property would change hands between a willing buyer and a willing seller, neither being under compulsion and both having reasonable knowledge of the relevant facts. In probate, FMV must be supported by objective evidence.
Who Appraises the Property?
The probate judge or register appoints at least two disinterested appraisers. These appraisers inspect each item and file a sworn appraisal listing the FMV of each asset. If the value of any item is disputed, the court can order additional appraisals or testimony.
How to Calculate FMV of Different Categories
- Household Goods and Furniture: Use recent auction results or yard-sale data for comparable items.
- Vehicles: Refer to industry guides (e.g., National Automobile Dealers Association) or recent private-sale listings in Alabama.
- Jewelry and Collectibles: Obtain a certified gemologist’s or appraiser’s report based on recent auction or dealer prices.
- Stocks and Bonds: Use the average of the high and low trading prices on the date of death from a recognized exchange.
- Business Interests: Engage a business valuation expert to apply accepted methods (e.g., income, market, or asset approaches).
Key Steps in the Appraisal Process
- Gather documentation: purchase receipts, appraisals, market listings.
- Select qualified, state-approved appraisers.
- Provide appraisers with date-of-death information and relevant condition reports.
- Review the written appraisal for consistency and accuracy.
- File the inventory and appraisal with the probate court within the time frame set by Ala. Code § 43-2-160.
Helpful Hints
- Start the appraisal process early to meet filing deadlines.
- Obtain at least two independent appraisals for high-value items.
- Keep detailed records of all communications with appraisers and evidence used.
- Consider digital tools and online marketplaces for comparables.
- Discuss complex assets (e.g., businesses, intellectual property) with specialized valuation experts.
- Notify potential heirs about the appraisal process to reduce disputes.
- Consult probate rules in your county for any local requirements.