One of the things that people might have to do when they are dealing with an estate is have the value calculated. This isn’t something that is always easy but it is often necessary. There are two ways to determine the value of the estate. One is the date of death value and the other is the alternative valuation date method.
The date of death valuation is just what is sounds like. It is the value of the estate on the date the person died. This can be determined by looking at bank statements, other dated financial documents and appraisals.
The alternative valuation date is calculated six months after the person’s death. It includes the gross estate and is based on the fair market value.
When it comes to dealing with the Internal Revenue Service (IRS), the estate valuation can be a huge deal because it determines what, if any, tax needs to be paid. It is up to the personal representative of the estate to decide which of these to use, but each has pros and cons that you must think about.
There are many other factors that come into the picture to determine the value of the estate. If you are a person who is having to deal with an estate after a person’s death, make sure that you think carefully about what you are doing.
Explore the options that you have and learn how each of these can impact the estate as a whole. From there, you can make the decisions that you think will be the best one for the people who are counting on you.
Source: The Balance, “Do You Know How to Calculate the Value of Your Estate?,” Julie Garber, accessed Jan. 19, 2018