How to Valuate a Decedent's Property for Inventory

The fiduciary must assign values to each item in the decedent's inventory.

The fiduciary of the decedent's estate may be termed the personal representative, executor or administrator of the estate, determined by the laws of the state in which the estate is located. Whatever the term, the fiduciary is the individual responsible for inventorying the decedent's estate and assigning values to everything in the inventory. The basic rules of valuation are usually applicable, but laws can vary by state. Always check with your attorney to determine if your state requires anything different or additional.

Instructions

1. Determine the fair market value of every asset listed on the inventory. Use the fair market value as of the date of the decedent's death, not the date the inventory is prepared.

2. Use exact dollars and cents to list the value. Avoid rounding off to a higher or lower amount.

3. List real estate at the assessed value for local real estate taxes.

4. List all other property at the fair market value, explained by one state court, the Supreme Court of Virginia, as "the price at which the property would change hands between a willing buyer and a willing seller in the retail market, with neither one being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts." Remember to valuate the property as of the date of the decedent's death; prices may have gone up or down since then.

5. Have any valuable or expensive items, such as antiques, valuable jewelry and fine art, appraised by an independent third party to determine the fair market value for the purposes of the inventory.

6. Attach an explanation if any other method is used to determine the fair market value of an inventoried item.

Tips & Warnings

• Do not reduce the values of any item by the amount of any outstanding loan, lien or mortgage. Debts are listed separately from assets.

• If you have any questions about determining the fair market value, seek the advice of your attorney, accountant or court system.

• Reasonable expenses incurred during this process are typically allowed as administrative costs of the estate.

References

• Supreme Court of Virginia: Instructions for Inventory-Decedent's Estate
• Connecticut Judicial Branch: Guidelines for Administration of Decedents' Estates