Expert Estate Planning, Personal Property, and Estate Tax Services
When personal property is transferred from a person to their heirs upon their passing, an attorney may require the executor of the estate or the heirs to have the property appraised to determine the Fair Market Value at the time of death. This property can include art, antiques, collectibles, land, homes, securities and other assets. While owing federal estate tax is uncommon, estate tax at the state level is often owed depending on the total value of those assets.
Alden Mason, Spirit Bird Returns, 1994, acrylic on canvas, 36 x 43 inches
Being Objective in Determining Fair Market Value
As an independent appraisal firm, McAllister/Fossum Appraisal Services’ IRS estate tax appraisals are completely objective. We apply our many years of experience to consider the quality, relative importance, history and condition of your artwork and collectibles when determining the current Fair Market Value. We have no financial interest in the property being appraised because we are not affiliated with any venue that is sells personal property for a profit. This allows us to value the property in line with the current market and maintain an arm’s length relationship with objects we value.
Preston Singletary, Tlingit Crest Hat, 2006, etching blue glass, 7-3/4 x 20 x 20 inches
Cost of Hiring an Expert for Estate Planning Appraisals
Our fees for estate tax and estate planning appraisals are always based on our hourly rate and never on the value of the item. Once we have completed the inventory of the objects to be appraised, we will send a fee estimate and make sure we have a client’s approval of all fees before beginning valuation research and report preparation.
What is Fair Market Value?
Fair Market Value is defined in Treasury Regulation §1.170A-1(c)(2) as, “The price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.”
What’s Involved in an Estate Planning Appraisal?
We also assist clients with estate planning appraisals so they can make informed decisions about what to do with their artwork and collectibles as part of preparing a will and other estate planning activities. An estate planning appraisal can inform you of the current Fair Market Value of collectibles so you can make decisions regarding possible future estate tax owed, wills, trusts and future donations to museums or other institutions. Having a clear plan in place, an appraisal on file, and a complete inventory of items will help you avoid administrative fees from attorneys and trustees as the estate is settled. An appraisal report is a helpful first step in proving clear title should your heirs someday wish to equitably distribute your personal property or sell their inherited artwork or collectibles.
What to Expect in Your Estate Appraisal Report
We write our estate tax and estate planning appraisal reports according to the rules and guidelines of the Uniform Standards of Professional Appraisal Practices (USPAP) set by the Appraisal Foundation, which is based in Washington D.C. Erin Fossum is an Accredited Member of the International Society of Appraisers (ISA) and follows the report writing guidelines and ethics that are imperative to writing IRS-quality appraisal reports. Our appraisal reports are accepted and respected by federal and state government agencies and courts of law. We have conducted hundreds of estate tax appraisals that have been submitted to the IRS and have never had a report questioned.
Avoiding an Audit with an Estate Tax Appraisal
Every year the IRS Art Advisory Panel reviews hundreds of appraisals related to estates and gifts. In 2017, the panel recommended adjustments upwards of $28 million in aggregate value. Estate tax appraisals can be rejected or questioned by the IRS if they are not conducted by a qualified, professional appraiser. This is one of the many reasons it is critical that you do your research and hire an appraiser who is an expert in the objects in question and who is well trained and educated in appraisal methodology.