The Role of Appraisals in Estate Planning in Napa County, CA

November 18, 2016 10:38 pm Published by Leave your thoughts

If you own acreage, a vineyard or a winery, you will likely need an appraisal on these assets if you are currently in the process of estate planning in Napa County, CA. Your attorney wants to be fully informed as the inventory of your assets is compiled, as that will help them determine the best way to protect your property from taxation and creditors. It also assists with determining how your estate is divided. Here are four specific reasons why you need to have an appraiser involved in estate planning:

  • IRS requirements: Appraisals of privately held business interests—including wineries, acreage and vineyards—are required by IRS regulations. This is due to the possibility of estate taxes, and you do not want this reported inaccurately. It could lead to excessive tax liability or penalties against your estate for failure to determine taxable value correctly. These impacts affect your loved ones and can leave them having to dip into personal assets to pay these expenses so you want to be careful. Fortunately, the cost of the appraisal is usually a deductible expense. Talk to your CPA or estate planning attorney to see how you can use this deduction.
  • Reduce possibility of will contests: If there is a solid appraisal on record for your estate planning, there are few grounds for disputes. This is especially required if there are tensions in your family over your property—for example, one heir wants to continue running your vineyard while another wants to sell it for profit. Disputes can also arise if your property is undervalued and an heir feels they are not getting a fair share. Your appraisal discourages these challenges, but also provides a ready expert witness (your appraiser) in case there is an attempt at a will or trust contest.
  • Assists hired professionals: Your estate planning attorney cannot determine how to protect your acreage, vineyard or winery from taxation if they have a full picture analysis of its value. It is nearly impossible to represent you or your estate without this information. Besides your attorney, your CPA also appreciates this information when filing your corporate, estate or trust tax returns. An appraisal will also help you make longer term decisions with your attorney. For example, some clients will decide to put the vineyard into a trust rather than risk unfair liquidation in probate.
  • Improved trust administration: A trustee will not be able to make informed decisions on running your vineyard or making payouts to heirs unless there is a solid value on the property. It is likely that appraisals will continue at set times after your trust is established, but that is necessary to assure it is meeting profit and investment expectations. Also, if there is a decision to sell in the future, the trustee will have information to set a fair purchase price.

If you require an appraiser for your vineyard, winery or acreage, contact County Appraisals Inc. or have your attorney for estate planning in Napa County, CA call us as soon as possible. We can assure that your plans will be based on informed decisions.

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