What is Involved in Probate Valuation?
When someone dies, his estate must usually go through a legal process known as probate. During probate, the decedent's — person who died — will is administered or, if the decedent left no will, then the court will administer the estate through the laws of intestate succession. Once the estate has been entered for probate, one of the first things that must be done is a probate valuation. In simple terms, a probate valuation determines the value of the assets of the estate.
Laws regarding estate administration and succession of wealth can vary by jurisdiction, but the concept of probate and probate valuation is generally similar. Upon the death of the decedent, anyone in possession of a last will and testament must present the will to the probate court and request that a probate case be opened. In the absence of a last will and testament, a probate case may still need to be opened if the estate left substantial debts and/or assets. An executor or administrator will be appointed to oversee the affairs associated with the probate process.
Once the estate has been admitted to probate, the probate valuation must be accomplished. Probate valuation involves valuing all the assets of the estate including cash, accounts, property, stocks, business and personal assets, and anything else that has value that was owned by the decedent at the time of death. Experts may be employed to assist in the probate valuation process.
There are a number of reasons that probate valuation is necessary. First, inheritance or estate taxes may need to be paid on the estate and a proper valuation must be accomplished to determine the amount of taxes due. Second, debts of the estate must be paid before the assets may be passed down to the beneficiaries so a total accounting of both assets and debts in necessary. When the decedent's will passes a percentage of the estate to the beneficiaries instead of specific items or monetary amounts, or when the decedent died intestate or without a will, a valuation of the assets is needed to determine what each beneficiary will inherit.
If a beneficiary or interested person is not satisfied with the probate valuation filed with the court, he or she may contest the valuation. If the probate valuation is contested, the court will likely appoint an independent probate valuation service to do a separate valuation. The court will ultimately make a final decision regarding the value of the estate.
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