Disclaimer: This article is for educational purposes only and does not constitute legal advice. Always consult a licensed attorney for advice on your specific situation.
Detailed Answer
Definition of Fair Market Value
Under California Probate Code section 72, “fair market value” means the price at which property would change hands between a willing buyer and a willing seller, both having reasonable knowledge of relevant facts and neither under compulsion to buy or sell. This date of valuation is typically the date of the decedent’s death. (Probate Code § 72.)
Inventory and Appraisal Requirements
A personal representative (executor or administrator) must file an inventory and appraisal of the decedent’s assets within three months of appointment (Probate Code § 8800). The court may appoint two appraisers if the estate holds personal or real property valued over $20,000 (Probate Code § 890). Appraisers must take an oath, inspect the assets, and submit a written appraisal signed under penalty of perjury.
Methods for Determining Value
Appraisers use several methods to establish fair market value:
- Comparable Sales: Research recent sales of similar items in similar condition.
- Professional Appraisal: Hire qualified appraisers for antiques, jewelry, art or collectibles.
- Auction Results: Use realized bids at reputable auctions as benchmarks.
- Published Price Guides: Consult industry-standard guides for vehicles, equipment or furniture.
- Online Marketplaces: Check current listings on platforms like eBay, Craigslist or specialized sites.
After gathering data, appraisers reconcile differences to reach a single value per item or category. The personal representative compiles these values into the official inventory.
Helpful Hints
- Begin early: Start identifying and researching assets immediately after appointment.
- Document sources: Keep records of comparable sales, bids or guidebook references.
- Use specialists: Engage certified appraisers for high-value or unusual items.
- Attend viewings: Permit appraisers to inspect items in person for accurate condition assessment.
- Budget costs: Include appraisal fees in the estate budget to avoid delays.
- Review drafts: Check the preliminary appraisal for missing items or valuation errors.
- File on time: Submit the inventory and appraisal within three months to avoid penalties.
If you have questions about your duties or need tailored guidance, contact a probate attorney licensed in California.