Detailed Answer
What Is Fair Market Value?
Fair market value (FMV) is the price an informed buyer would pay an informed seller at arm’s length, without duress, on the date of the decedent’s death. In Indiana probate, FMV guides the appraisal of all personal property—furniture, jewelry, collectibles, vehicles, and household goods—to ensure equitable distribution and accurate estate accounting.
Probate Inventory and Appraisal Requirements in Indiana
Under Indiana Code §29-1-7-5, the personal representative must file an inventory and appraisement of the decedent’s personal property within three months after appointment. The inventory must list each asset and its FMV. Indiana law defines appraisement as the probable sale price at a fair and open sale. A qualified appraiser or two disinterested individuals typically determine the value.
Reference: Indiana Code §29-1-7-5 (2023).
How to Calculate FMV in Practice
- Gather Comparable Sales Data: Look at recent auction results, consignment prices, or online listings for similar items.
- Obtain Professional Appraisals: Engage a certified personal property appraiser for high-value items like antiques or art.
- Document Replacement and Retail Values: Use catalogs or dealer price lists to establish baseline value, then adjust downward to reflect resale conditions.
- Adjust for Condition and Rarity: Factor in wear, damage, and market demand when adjusting comparable sale figures.
- Tabulate and Itemize: Prepare a detailed schedule showing each item, its valuation method, and final FMV.
Example Scenario
Jane Doe, appointed as personal representative, inventories her mother’s estate. For a vintage wristwatch, she obtains two appraisals at $1,200 and $1,300. She averages them to $1,250 FMV. For household furniture, she reviews recent estate sales, finds comparable sofas sold for $400 each, and lists that amount for each sofa in the inventory. All values reflect the likely price at a fair sale.
Helpful Hints
- Hire a certified appraiser for high-value or unique items.
- Keep detailed records of comparable sales and appraisal reports.
- File your inventory and appraisement within three months to avoid court delays.
- Review I.C. §29-1-7-5 for complete appraisal rules.
- Seek guidance from the probate court clerk on local appraisal practices.
Disclaimer: This article provides general information about Indiana probate law and is not legal advice. Consult a licensed attorney for guidance on your specific situation.