Estate Appraisal (Fair Market
Value)
An estate appraisal value is
lower than the appraisal value for insurance purposes because
it does not include costs for labor, fabrication, designer
names, or today's marketing costs.. Fair Market value is used for estate-evaluation
purposes, and is an assessment based on what a willing buyer
and seller would agree to without a forced sale. Appraisal
criteria for estate have been legislated to include specific
information and data, but do not include the factor that an
insurance replacement appraisal does, and so this usually a
lower value. The following is the U.S. Treasury definition of
FAIR MARKET
VALUE-
“The fair market value is the price at which the
property would change hands between a willing buyer and a
willing seller, neither being under any compulsion to buy or
to sell and both having reasonable knowledge of the relevant
facts. The fair market value of a particular item of property
includible in the decedent’s gross estate is not to be
determined by a forced sale price. Nor is the fair market
value of an item property to be determined by the sale price
of the item in a market other than that in which such item is
most commonly sold to the public, taking into account the
location of the item wherever appropriate. Thus, in the case
of an item of property includible in the decedent’s gross
estate, which is generally obtained by the public in the
retail market, the fair market value of such an item would be
sold at retail. (Treasury Regulation
20.2031-1(b))”
(A
Fair Market Value appraisal is appropriate in cases such as
dissolution of a marriage)
