When someone passes away, items in their estate might need to be valued for the purposes of estate taxes or so that an executor can determine fair market value for liquidating them.
If you have a unique collection or other assets inside your estate that may be difficult to value at the time you pass away, it’s important to do some advanced planning and potentially work with an experienced lawyer to come up with a process that will assist with this.
Recent news stories have highlighted some of the challenges of assets inside the estates of Prince and Michael Jackson. There are three different kinds of approaches that can be used to value unique assets. These are known as market, income and cost approaches. The market approach looks at an asset by comparing it to the prices at which other related or similar assets have changed hands close in time to the date of death of the deceased.
The income approach values the asset by calculating how much potential revenue it could produce in the future and then discounting that revenue back to current value. Finally, the cost approach values an asset by computing the cost of what it would be to recreate it. These different valuation approaches can all have significant impacts on end values for assets.
This value calculation means that it is very important to engage the services of an experienced appraiser and to include as many documentation details as possible when leaving these assets behind to your loved ones. For more information about advanced estate planning techniques, schedule a consultation with an attorney in NH today.