Family Trust Appraisal

[Genex]

I've been asked to perform an appraisal on a house for a family trust.

Before I agree to take it, I'd like to get some feedback from people with some experience in this area.

I'm assuming there's a possibility that I may be asked to testify in court to it. So, do you charge more for that potential? If so, how much?

I was also thinking I would use the old 1004.

Any additional feedback would me much appreciated.

Thanks a bunch!

Jason

 

[Flygirl 152]

Hi Jason,

I recently did an appraisal for someone whose spouse had passed away and they were filing a 706 form with the IRS. I have ACI software and used their general purpose form (GPAR). It was the first time I had used the GPAR, and found it met all of my needs, and it was easy to use. If you are an Alamode user, I believe they also have general purpose forms.

Since I had never done an appraisal for this purpose, I got together with the person that trained me and had him review it. It always helps to have another pair of eyes look something over with you just to be sure you don't omit anything that is pertinent to the assignment.

On a side note, I was born and raised in Minneapolis. I was back this summer visiting my family and just can't get over how much it has changed!

Good luck on the assignment,

Deb

 

[Charles Knutson]

What is the purpose of the report?

I've done a lot of refi reports where the subject property is owned by a family trust -- it's a great way to avoid probate, with more flexibility than joint tenancy.

I agree with Deb on the report type -- the old 1004 might be okay, but there are alternatives. Most software vendors include a report that looks like the new URAR, but doesn't have the restrictive certifications of the FNMA reports. I've also used the AI report -- it's very good for non lending appraisals.

If you are concerned about testifying, include your fees for court prep and attorney consultation and testimony in the engagement letter. Then, write a report that is so comprehensive that no one will need additional input -- and charge accordingly.

 

[Jim Buckner]

Use the general purpose form. I doubt you will be in court on an estate matter as it is more likely being used by the accountant/attorney for the estate tax return. I would put in the engagement letter that any subsequent testimony at trial or deposition would be billed separately.

 

[Paul Isolda]

Assume your appraisal will be reviewed by the IRS and be very thorough. Very unlikely you will need to testify in court on this. It sounds like a trust is being establised, not an adversarial situation that would require testimony. I use the old 1004 for these because I am used to it but a general purpose form would serve the same purpose.

 

[Mike Kennedy]

Gen - suggest posting who ordered the appraisal and what is the Intended Use.

Further suggest a signed Engagement Letter from either the Family Member, the Trust Administrator or Attorney. Recommend replying to the Engagement Letter your Acceptance of the Assignment including a SOW spelling out in concise terms exactly what this assignment entails, applicable fee for the appraisal report, AND payment terms.

Lastly, I recommend determining, prior to accepting the assignment, whether any subsequent actions will be required. If so, including appropriate hourly rate, or per occasion rate, commensurate with their requirements. Request the Client acknowledge same, in writing, and retain in your work file. I second, and third, the recommendations above to use either the GPAR (ACI) or the Wintotal Generic - and not a Fannie Form (assuming the assignment does not require a Narrative).

 

[Terrel L. Shields]

If it is meant to divide an estate where relations are adverse, then you might be in court. Otherwise, I doubt that is a factor. It's locking in a value for date of trust and/or taxation purposes. Don't use the new forms. I prefer a narrative. Learn to write them. Be sure to add the following to your certification and check the certification to make sure it matches what you are doing.

No assurance is provided that the methodology and/or results of the appraisal will not be successfully challenged by the Internal Revenue Service (IRS).

 

[PropertyEconomics]

First off the poster said this is for a TRUST not an ESTATE and there is a huge difference in my mind.
Regarding court work you may or may not be required to testify in court for a variety of reasons, however, in any event your letter of engagment with the attorney or family should spell out your fees should you be called to testify. Typical $ amount of court prep and $$ for court testimony on an hourly basis.
If you have not testified in court before I caution you that it could get a little hairy as your competency and skill level along with your experience of testifying will most likely be challenged by an opposing attorney.
Dont let this scare you as they are just people like you and frankly for the most part dont have a clue what you do. They will try to intimidate you but who cares .. look them right in the eye and answer their questions and if they offend you say so to the judge or jury.
This may be a very good place to cut your teeth as it were because there is not a great deal at stake here other than the value of the property for trust purposes which is essentially reporting market value of the property so that it can be placed in a family trust.
I wish you good luck on this assignment.