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How is estate value calculated?

When filing taxes, it is important to know the value of an estate to an accurate degree. The value of an estate can either be valued from the "date of death" of the grantor, or judged by another specific day if the estate value has increased or decreased significantly.

The gross estate value is the total value before things like debts or taxes are deducted. A personal representative can decide whether the date of death or another date will be used to determine the value of the estate. This will be decided based on what is beneficial - if the estate has gained in value significantly since the date of death, the taxes are going to be higher.

Date of death valuations

Determining the estate value at the date of death can prove simpler because bank statements can be used to see balances, and stock prices that were owned can be valeted in retrospect. Other assets such as businesses and property are usually appraised.

Alternative date valuations

The alternative date valuation is always conducted based on the date six months after the grantor's death. Assets are valued in the same way as with date of death valuations - mainly through appraisal. This alternative date valuation is only usually done if the estate value decreased enough to have an impact on the taxes owed.

Conducting a valuation on an estate and filing the necessary taxes can be an extremely complex procedure, especially in the case of high asset estates. It is important to seek trusted legal guidance if you have any concerns about the valuation process.

Source: The balance, "Do You Know How to Calculate the Value of Your Estate?," accessed Oct. 06, 2017

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