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Intended Use And User For Estate Appraisal

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Metropolis

Junior Member
Joined
Feb 2, 2009
Professional Status
Certified Residential Appraiser
State
Florida
So I've been requested to do an appraisal for an estate matter. I've only done a few and I want to make sure I've got the Intended User and Use correct. Of course I'm preparing it as of the date of death. The attorney is not giving me too much direction. I have the client as the daughter of the deceased who contacted me.and I have the Intended Users as "the Beneficiaries of the Estate and their Attorney" with the Intended Use of "developing an opinion of fair market value for use in estate management". Anything I'm missing? Thanks in Advance.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
So I've been requested to do an appraisal for an estate matter. I've only done a few and I want to make sure I've got the Intended User and Use correct. Of course I'm preparing it as of the date of death. The attorney is not giving me too much direction. I have the client as the daughter of the deceased who contacted me.and I have the Intended Users as "the Beneficiaries of the Estate and their Attorney" with the Intended Use of "developing an opinion of fair market value for use in estate management". Anything I'm missing? Thanks in Advance.

If it were me, I'd prefer to:
  • List the attorney as my client (although many will balk at that); or
  • List the estate's trustee (usually one of the beneficiaries in a small estate case) as my client
If you list "Beneficiaries" as your client, every beneficiary becomes your client (and an intended user), and you've expanded your client-obligation list to include more people.

The daughter who contacted you may be the trustee or executor.

Good luck!
 

Riick

Elite Member
Joined
Aug 14, 2007
Professional Status
Certified Residential Appraiser
State
Delaware
Another question is whether the estate is large enough that the IRS will want a copy of the appraisal.
Don't know the current figures, it used to be taxable if above $1 million
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
Here's more for you to ponder
This report is intended to be used by the client for decisions related to settlement of the estate of ...

The intended users are our client, ..., as well as their financial and legal representative related to finalizing settlement of the estate
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Don't know the current figures, it used to be taxable if above $1 million
Not your problem except a gift over $5000. For estates, the client is the lawyer or trustee, NOT THE HEIRS. You can have a very adversarial heir. I had one call demanding a copy of the report and I told him to call the attorney and he lit into me like a stepchild. Attorney said, absolutely no because they had contested the will and could pay for their own appraisal.

Use the IRS definition of "Fair Market Value" not your form definition. The attorney is the client. The intended use is estate planning.

IRS can be involved in several ways. Estate taxes. Gifting for a tax deduction. Valuation of property subject to an IRS lein. Etc.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Intended Use...Settle Estate. I also prefer to use the attorney as the client.
 

sandpiperapp

Senior Member
Joined
Apr 5, 2011
Professional Status
Certified Residential Appraiser
State
New York
Is there any reason why we shouldn't use the Estate as the client?
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Is there any reason why we shouldn't use the Estate as the client?
from Google - An estate is the net worth of a person at any point in time alive or dead. It is the sum of a person's assets – legal rights, interests and entitlements to property of any kind – less all liabilities at that time. The issue is of special legal significance on a question of bankruptcy and death of the person.

Therefore, I really don't want to put that to such a broad and intangible "client". The "client" is whomever ordered it and will pay for it. I usually am contacted by a legal firm, sometimes an heir-usually as a successor trustee, and occasionally a financial advisor or CPA. Currently I have 3 where the lawyer is the client, I inspected one Friday where the successor trustee is the client (he is an heir but there are others). I just finished one that the successor trustee is also a child. I was in talks with an heir to a trust that was left open since 1984. Now closing it they discovered they need an appraisal back to 1984, not 2014 when they closed the trust. I warned them that I really couldn't estimate the cost until I had details but to be aware the cost would be high, and I didn't have a clue what it was really worth in 1984 so they probably would want to compare the potential benefit with the appraisal cost. If it cannot save them $1000, certainly it isn't affordable because I know it is a minimum 2 day project.
 

Obsolescent

Senior Member
Joined
Jul 6, 2004
Professional Status
Certified Residential Appraiser
State
Minnesota
You probably already know this, but the appraisal should go on a general purpose form and not a Fannie Form. If you use the Fannie form and If it goes to court, you'll likely have to explain the preprinted definition of market value on Fannie Form vs. the IRS definition; and that the form has preprinted language that it is to be used for lending purposes only which will differ from your intended use. Using the Fannie form will result in a plethora of contradictions. Just putting that out there.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
You could use the old form or just change out the certification page. I find this easier as I am well versed in the form.
 
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