When someone dies and leaves behind an estate, heirs are often faced with a variety of confusing decisions. What, specifically, have you inherited? What is it worth? What should you do?
If you’ve inherited an estate, one of the first actions you should take is to contact a professional appraisal company. An accurate assessment of your estate’s value gives you a “lay of the land” about the inherited items. Once you understand what you have, you can make an informed decision about what to do next.
Here’s a closer look at the estate appraisal process, its benefits, and how to find a great estate appraisal company near you.
What is an Estate Appraisal?
An estate is essentially all of the money and property owned by a person at a specific time. When discussing an inherited estate, the term applies to everything left behind after the owner has died.
While determining the amount of money across bank accounts is usually straightforward, determining the value of physical, tangible property can get tricky. Many times, heirs don’t know what they even have, much less what it’s worth.
An appraisal is a professional, detailed evaluation of each item in an estate. It can include antiques, jewelry, silverware, art, furniture, clothing, electronics, vehicles, and much more.
Estate appraisals typically determine the fair market value (FMV) of each item. It’s a federally defined term that sets a price based on what willing, knowledgeable buyers and sellers would agree upon without any extra requirements to act.
Benefits of a Professional Appraisal
Working with professional appraisers will always result in a better outcome than attempting to evaluate the items on your own.
First, a professional appraisal is far more accurate. Many inheritors attempt to research items online, but that typically only provides a general sense of an item’s value. Instead, a professional appraiser can determine the likely sale value of your specific item in its current condition.
Not only are professional appraisals more accurate, but they’re the only type of appraisal accepted by many professional organizations, such as courts, banks, and insurance companies. Professionals follow guidelines set by the Uniform Standards of Professional Appraisal Practice, a national appraisal organization.
Another benefit of a professional appraisal is that you can wind up with more money in your pocket. If you decide to sell any of the estate, either on your own or through a professional estate sale, understanding the real-world value of the items helps you price them for maximum profit.
Aside from inheritance, a professional appraisal is useful in many other situations, including:
During a contentious divorce, parties might attempt to overinflate or undervalue the value of shared items. An incorrect assessment can potentially (and unfairly) minimize or maximize the amount of money the court orders one spouse to give to the other.
A professional appraisal helps remove emotion from the proceedings by providing an impartial, fair assessment of the mutually-owned property. Plus, because professional appraisals follow USPAP guidelines, they’re often required by federal and state courts.
Aside from divorce, professional appraisals also benefit any situation involving the split of mutually-owned property, such as the dissolution of a business with more than one owner. An appraisal can help the owners split the property equally, as well as help identify any particularly valuable items which can be sold if fast cash is needed.
An appraisal is also necessary if you plan to donate any inherited items to charity. The IRS requires an USPAP-qualified appraisal for any charitable donations worth $5,000 or more that the giver wants to claim as a tax deduction. A professional appraisal not only protects you from IRS fines but also helps you maximize your tax write-off.
How an Estate Appraisals Works
Professional appraisers, either an individual or a team, will arrive at your estate. They’ll personally inspect and photograph each item. Then, they’ll conduct additional research on each item as necessary. Many appraisal companies, even local ones, will have connections to an established national network of experts to help determine the value of anything rare or unique.
After finishing their research, the company will put together an appraisal report. It’s a digital document that details the value of each item. Most companies also include a variety of other relevant information, such as the item’s dimensions, history, and condition.
Additionally, many estate companies offer online appraisals. You can email photographs of a few items to the company, and they’ll determine a general value. Note that online appraisals only provide an educated estimate; an in-person appraisal is required for a USPAP-compliant report.
How to Find a Professional Appraiser
Before hiring an appraiser, ask them the following questions to help determine their qualifications and competency.
How Long Have You Been in Business?
Generally, you want an appraisal company with at least ten years of experience. The more experience the appraiser has, the better they’re able to understand market trends regarding the sale of antiques, collectibles, and other estate items.
Do You Create USPAP-Certified Appraisals?
If your appraisal document doesn’t follow USPAP guidelines, it likely won’t be accepted by courts, insurance companies, or federal organizations.
What Other Service Do You Offer?
Many appraisal companies also offer estate sale services, which is helpful if you want to sell the inherited items. An estate sale company takes care of every aspect of the sale in exchange for a percentage of the profits. It’s the easiest (and most profitable) way to sell a house full of unwanted belongings.
If you’ve inherited an estate, or otherwise need to assess the value of any owned property, don’t attempt to appraise it yourself. Information found online isn’t always accurate, and you might end up under or over evaluating the item’s worth.
Instead, hire professional estate appraisers. They have the experience necessary to determine the fair market value of the items in question. By understanding the value of what you own, you can then make an informed decision about what to do next.
If you have questions about how an appraisal can help you, contact Prestige Estate Services today for more information.