Can a Death Affect the Valuation for Estate Appraisals in Napa County, CA?

March 20, 2019 9:18 pm Published by Leave your thoughts

Estate values can vary greatly depending on a host of factors. The current market is a main influencer, but other things can also affect the valuation for estate appraisals in Napa County, CA. Death can be one of these factors.

How does this work? Use the following guide to gain a better understanding of how to handle an estate appraisal after a death occurs.

Appraisal Options

If the owner of an estate passes away, a couple of options exist for appraising the estate after their death. There are pros and cons to both options, so those in charge of the estate should carefully consider which will be best for their situation. The choice will affect taxes, future property values and the timetable of events.

The two options to consider are “date of the death” estate valuation and “alternate valuation date” value. Here’s the difference.

Date of the Death

If this option is chosen, the estate appraisal in Napa County, CA applies the fair market value of the estate as it was on the day of the decedent’s death. For bank accounts, the value would be what it was on the date of death. For publicly traded stocks, the average of highs and lows for stocks held on the date of death are calculated, and these are multiplied by the number of shares owned by the decedent. For deaths that occur on a date when the market is closed, the average prices for the days immediately before and after the death are used for calculating total estate value. To determine the value of properties and other personal effects, an appraiser is consulted.

Alternate Valuation

With this option, the estate’s value is determined six months after the date of death. This option is available if the estate is subject to federal estate taxes and if choosing this option would lower the value of the estate appraisal in Napa County, CA.

Why would someone want the value to be lower? This will become clearer in the next section.

Pros and Cons of Valuation Methods

The alternate valuation date allows estate managers to pay less in estate taxes. If the value of the estate drops during the six months following the decedent’s death, the estate tax bill will be reduced. However, if any assets have been sold during that six-month period, the sale price must be used for the estate appraisal in Napa County, CA.

The disadvantage of this method involves capital gains taxes. If the alternate valuation method is used and the estate appraises at a lower value, but it is then sold for a greater value in the future, the original lower alternate value must be used to determine the profit. This means the estate manager will pay more in capital gains tax.

Get Guidance

Are you unsure how to handle estate appraisals in Napa County, CA after a death? If you’re not sure which method would be better in your situation, consult with the professional team at County Appraisals Inc. Our expertise includes agricultural-related properties typically developed as vineyards, wineries, rural estates or single-family residential uses on acreage. Contact us today for an appraisal process that is easy and understandable.

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