Every estate that goes through probate must be valued. Valuing the estate occurs after the notice of administration has been filed with the probate and creditors/beneficiaries have been notified that the estate has entered probate. During estate valuation for probate, the decedent’s belongings and possessions are appraised, consolidated, and assigned a monetary value. Estates are valued to ensure debts and creditors can be repaid. The estate value also determines whether the estate qualifies for summary or formal administration. Here are some important factors to consider when valuing an estate during probate.
Any property that’s considered a probate asset needs to be valued. Here are some examples of the types of property that would be valued during probate proceedings:
Real property the decedent owned will be appraised and valued during probate. Real property includes homes, land, vacation houses, and timeshares.
Notable personal property will also need to be valued for probate. This includes cars, boats, household items, electronics, and furniture. It also includes the value of family heirlooms, collections, and jewelry.
Financial property is money in bank accounts the decedent owned. This includes the value of life insurance plans, retirement accounts, and savings. Business assets and intellectual property (copyrights, trademarks, and patents) are also valued.
Estate valuation for probate determines the fair market value of the decedent’s possessions. Different evaluation methods may be employed depending on the asset. For instance, a market approach is often utilized when valuing real property. With this approach, value is decided by analyzing the sale prices of comparable properties in the area and determining what a piece of property in similar condition and age would be worth. The value of property like timeshares, cars, and boats can be found using similar methods. Any asset estimated at $50,000 or more may require a formal appraisal.
Only some possessions the decedent owned need to be valued for probate purposes. Non-probate assets don’t need to be valued. Examples of non-probate assets include possessions the decedent jointly owned with someone else, financial accounts with “payable on death” or “transfer upon death” benefits; life insurance plans with a beneficiary designation. Shared property that benefits a surviving spouse and their children, such as a family home, furniture, and up to two cars, are exempt, too.
Here are the steps to value an estate in Florida:
- Gather all assets.
Gather all the probate assets together in one place to begin. Create a spreadsheet to ensure you stay organized. In the spreadsheet, list each possession and leave space to put each item’s estimated value. The list should include all probate assets, from real estate to stocks.
- Determine fair market value for personal property.
The second step is determining each possession’s value when the decedent passed away. Formal appraisals may be ordered for some of the most valuable assets. For others, value is determined through internet research and expert insight. If the decedent jointly owned property, only the decedent’s share would be subject to estate valuation for probate.
- Create an estate bank account.
As property is valued, an estate bank account should be established. This is the bank account that all profits from sold possessions and property should go in. Funds from the decedent’s accounts are also put in this account. Creditors will be paid out of existing funds from this account.
- List all debts and known creditor claims.
List out any known creditor claims against the estate, as well as any debts the decedent had. Note the value of each claim and the party that’s owed money. You’ll also want a probate attorney to look over each claim to ensure it’s a valid creditor claim.
Estate Administration with Boutty Law Firm
Personal representatives have many responsibilities, including estate valuation for probate. Our attorneys at the Boutty Law Firm will help you through each step of the probate process, including collecting and valuing the estate and paying creditors. Call our office at 407-622-1395 or contact us online to discuss your case.