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Appraisals for New York Estates

Close-up Of Person Hand Filling Real Estate Appraisal Document In Front Of House

{Read in 4 Minutes}  As a Trusts and Estates attorney, I frequently represent Executors or Administrators of Estates. I often represent them from start to finish, meaning that once they get a death certificate, I will prepare their Petition for Letters in the Surrogate’s Court, and on the appointment, I will advise them concerning their duties, including but not limited to collecting bank and brokerage accounts, real property, intellectual property, dealing with creditors, accounting, and making distribution to the beneficiaries on a reasonable timeframe. Incident to their duties, my client may need to obtain an appraisal from a licensed and/or certified appraiser.

While no estate administration absolutely requires the Executor to get an appraisal, here are some examples where it might be helpful. 

1. Real Property 

It is essential that the Executor determine the date of death value of any real property that the deceased left behind. This can be done by contacting an appraiser, or if the Executor sells it within just a few months of death to a disinterested purchaser, it is presumed that the sales price is fair market value. Why might an Executor need this? The Executor may need this because if they sell it, the Estate could see a gain or loss on its sale, which might lead to income tax consequences for the Estate and the Beneficiaries. It is also helpful if a beneficiary later claims that the Executor sold the property for too little, thereby reducing their inheritance.

2. Valuable Tangibles

When a person dies, they own the tangible personal property in their home and elsewhere. This might be incredibly valuable (like jewelry, artwork, collectibles, etc.) or completely worthless (the expired milk in the fridge, the socks full of holes, the mobile phone technology of 1997, etc.)

If the Executor is going to sell these items, it is important that they educate themselves about the item’s value to ensure that they get a fair deal. For example, the Executor might be inclined to sell the jewelry by bringing it to a local jeweler who offers to buy jewelry on the spot. However, the Executor would be wise to have it appraised first, so they understand what kind of deal — good or bad — the merchant is offering.

3. Businesses

If the deceased owned a business, that business, much like anything else, can go to the beneficiaries of the Estate. However, it is important that the Executor assess the value of the business, particularly if it is a business where one of the beneficiaries plans to buy out the interests of the others. The Executor can hire an appraisal firm to ascertain the value and generate the best deal for everyone.

4. Contested Accountings

Sometimes the Executor may choose to file their accounting with the Court. This may occur voluntarily, or the Court may order the Executor to do so. In either situation, Courts routinely request that Executors submit appraisals as exhibits to their accounting. If the Executor is asking the Court to approve their transactions, it is imperative that the Court understand the exact value. It’s also helpful if there is a dispute among the beneficiaries. The appraisal is valuable but if necessary, the appraiser can come to the courthouse and testify about how they ascertained the value.

As you can see, whether an Executor decides to order an appraisal or how many is something that the Executor must determine on a case-by-case basis, usually with the advice of their attorney. If the Executor decides to get an appraisal, it’s important to select a good one. You can find appraisers online. The Court also maintains lists with links for approved appraisers, or your attorney may have a referral. 

For more information on this topic, please, contact me.