When it comes time for disposal or transition of your marital property due to divorce or property inherited by you from a deceased relative, one of the first things you may need to determine is its appraised value, whether for re-sale or buy-out purposes.
There are many items to consider within a marital or probate estate, including your financial assets, furniture and household goods, vehicles, and property, and most of the time people say, “I don’t know what it’s worth.” That’s why you need a third-party professional.
Often having to determine this information through the turmoil of a divorce or loss of a loved one is too difficult, and, depending on the nature of the asset, it may be best to employ the services of a professional appraiser to help determine the value.
Although there may be free web services, it can be risky to rely solely on those alone to determine an accurate value, and, for purposes of a divorce, that type of information may be deemed inadmissible by the judge on grounds of “hearsay” or “speculation,” or “lay person lacking expertise to give the appraisal.” It is also likely you might find multiple values on the web and not have a real idea of the actual value of your specific asset. There are many intricacies such as age, condition and desirability that come into play that are not readily available through an Internet listing. Art, certain kinds of collections (such as rare coins), and even jewelry can be especially vulnerable to value fluctuations.
Finding a Professional Appraiser
In the case of a death, the executor or administrator generally determines whether to hire an appraiser, and the fees are paid either as a setoff against the proceeds from a liquidated asset (if the appraiser also sells it for the estate) or from the probate account set up by the executor to hold cash assets belonging to the estate. These expenses may be tax deductible to the estate if the probate estate owes any death taxes on the value of estate. The appraiser’s fee is typically based on either an hourly fee or a percentage of the estate if it is to be liquidated by that appraiser.
Be cautious when employing an appraiser who wants to both appraise and sell your items, or of one who may undervalue an item simply because they wish to purchase it themselves knowing it can be re-sold later at a higher price. This is a conflict of interest and an unethical practice. Watch also for ones who overvalue items when his or her commission is based on percentage of sales.
Inform the appraiser as to your particular need for an appraisal. Do you need the entire contents appraised, or only a select group of items? Your appraiser will help to establish the Fair Market Value for your items.
In the case of a divorce, seek and follow the guidance of your divorce attorney to determine what assets justify the use of an appraiser or which do not, noting that the most common assets involve real estate, a family-owned business or business interest, and pension/retirement benefits.
Your attorney may be able to refer you to a professional property appraiser, or you can check with the professional associations in your area, such as the American Society of Appraisers, the Appraisers Association of America, and the International Society of Appraisers.
Appraisers are not required to hold licenses, but, as members of their associations, they are required to conform to a code of ethics and the Uniform Standards of Professional Appraisal Practice, pass tests and take continuing education.
Check with these Associations’ records on the appraisers’ backgrounds, looking for any appraisal challenges and their outcomes. Look for an appraiser who has done work similar to yours, and ask for references of people they’ve worked for.
Contact Your Estate Planning Attorney
Whenever there is a change in your estate, due to a divorce or the death of a loved one, it’s prudent to meet with an experienced family law or estate planning/probate attorney who can help you navigate through any processes and update your records appropriately. At the Law Office of Patricia E. Tichenor, P.L.L.C., Northern Virginia attorneys Patricia Tichenor and Camellia Safi are ready to provide you guidance and legal representation in your divorce, estate planning, or probate matter. Contact us today.