Disclaimer: This information is for educational purposes only and does not constitute legal advice.
Detailed Answer
1. Definition of Fair Market Value
Under Virginia law, fair market value is the price at which personal property would change hands between a willing buyer and a willing seller, neither under compulsion to buy or sell, and both having reasonable knowledge of relevant facts.
2. Statutory Requirement for Inventory and Appraisement
The personal representative of an estate must file an inventory and appraisement of all estate assets, including personal property, within three months of appointment. See Va. Code Ann. § 64.2-512. This inventory must list each item and its fair market value as of the decedent’s date of death.
3. Selecting a Valuation Method
- Engage a Qualified Appraiser: For unique assets such as art, antiques, jewelry, and collectibles, hire a certified appraiser.
- Use Published Guides: For vehicles, boats, and equipment, reference NADA or Kelley Blue Book values.
- Compare Recent Sales: For common household goods, research online auction sites or retail listings to find sale prices close to the date of death.
- Document Data Sources: Record the date, source, and sale conditions for each valuation to support the appraisement.
4. Filing the Inventory
After valuations are complete, file the inventory and appraisement with the clerk of the circuit court in the county where probate is pending. The court may require clarification or reappraisal if values appear unreasonable.
5. Using Appraisals for Distribution
Appraised values determine asset distribution and may affect creditor claims, allowances, and any required estate tax filings. Accurate valuations can prevent disputes among heirs and beneficiaries.
Helpful Hints
- Begin valuations early to meet the three-month deadline under § 64.2-512.
- Keep copies of all appraisal reports and valuation worksheets.
- Obtain at least two independent valuations for high-value items.
- Consult online price databases and auction archives for reliable market comparables.
- Review and update valuations if market conditions change significantly before filing.
- Consider consulting a probate attorney if you receive challenges to your appraised values.