The probate process can be difficult to go through at an especially tough time after losing a loved one. The court is tasked with distributing and handling the estate, so it has to go through the process of figuring out how the assets are distributed and how much the individual items of the estate are worth. First, the court has to identify, inventory, and value the assets in an estate. Next, debts and taxes are paid. Finally, the funds are distributed to beneficiaries.
When listing the value of probate assets, executors often have to hire an appraiser. While some items, such as savings accounts, bank accounts, or an IRA, are easy to value, the worth of real estate can be difficult to determine. As the appraiser, we are only involved in the valuation of the real estate part of the probate process. Our role is to develop and report your appraisal (or appraisals) on the real estate so that you or your attorney can submit it to the court.
When it comes to dividing the assets of an estate, things can get ugly quick. A will can be vague and occasionally the family doesn’t agree on the value of the family home or other real estate. Whether it’s stress, greed, ignorance, or a good old-fashioned grudge, it’s all too common for disputes to arise. Hopefully, this isn’t something you have to deal with; however, luckily, you can turn to professionals who are accustomed to these situations and can help you through difficult times.
Do I really need an appraisal? Why?
Yes. Unless you have a recent and reliable valuation or there is only one beneficiary and the estate is not likely to be disputed, any real estate properties should be properly appraised and the reports provided to the attorney. (Note: In recent years, market values have been increasingly volatile in the Upstate of SC. You may need an updated appraisal even if the value is recent.)
Why is official documentation of the value so important? It goes a long way in preventing conflict between siblings or other beneficiaries when the property is sold by providing a neutral value. This value can be used in the event one beneficiary wants to buy the other(s) out or when a purchase offer is received and the beneficiaries are determining whether to accept or reject that offer. We’ve seen some unfortunate cases where Sibling A believes a property is worth $500,000, while Sibling B believes it’s worth $750,000, and then wastes years in a legal stalemate because neither will agree to a sale or other disposition.
Is it okay to get a real estate agent to do the appraisal?
Generally speaking, no. If the situation gets contentious, it could end up in court, therefore it is better to have a certified document to back you up.
A report by a state-certified appraiser with over twenty years of experience will always be given more weight in your case if it ends up in front of a judge. This is because we are considered to be highly trained and unbiased, with the state of SC authority, to valuate real estate. Real Estate agents can play an important part in the process but not in the initial valuation for probate.
Who should choose the appraiser?
If there is any possibility of conflict with the estate – and even if there isn’t – it’s often prudent to let the lawyer or bank handling the estate help you choose an appraiser. If necessary, they can provide you with a list of certified appraisers they recommend and you can select which of them to utilize. This method is the best way to help the process stay as emotionally neutral as possible.
Can I dispute a probate appraisal?
If your sibling/stepmother etc.. provides you with an appraisal that you or your lawyer disagree with and what are your options? Sometimes we’ll see an appraisal that seems to favor one side over another. Most of the time there is nothing nefarious going on, however, it can be costly if there was any bias involved. Your appraiser should be unbiased and present a credible, easy to understand report to the court. The last thing you want is for the judge to think that you’re not acting in good faith. If he doesn’t trust your appraisal or appraiser, it could cause him to distrust other information that you’ve provided.
Now if you have concerns about your appraisal, what should you do? The first should be consulting with your attorney to discuss how you should proceed. Here are some of your options.
- You could accept the other appraisal and accept the value and move forward.
- You may wish to have our team perform an appraisal review on that appraisal to report on the quality of the other appraiser’s work to make sure no costly errors were overlooked. You may end up still needing to order an appraisal, so this option could cost you more money than necessary.
- You may have my team perform a new appraisal to assure that the estate is being distributed equitably.
Have question or concerns regarding valuation for estates?
We know it can be tough to think about someone (including yourself) passing, and it doesn’t get any easier once you’re the executor for someone who has recently passed. If you have any questions or concerns, don’t hesitate to call us for a free consultation.