Similar in Estate, Trust & Probate appraisals, the definition of market value that should be used is Fair Market Value. This is the price at which a property would change hands between a willing buyer and a willing seller, with neither being under any compulsion to buy or sell, and both having reasonable knowledge of the relevant facts. The definition is often tied to the Internal Revenue Service (IRS)'s definition, which is frequently included in appraisal reports.
Here's why this definition is crucial in probate:
Fair Market Value is the basis for calculating estate taxes, ensuring accurate valuation of the deceased's assets.
It provides a fair basis for dividing assets among heirs, ensuring equitable distribution of the estate.
Using the IRS definition helps ensure compliance with legal and regulatory requirements for probate proceedings.
- Transparency and Fairness:
It establishes a transparent and objective value for the property, minimizing disputes among beneficiaries.
Essentially, the appraiser needs to determine the most probable price a property would fetch in the open market, assuming a typical sale, not a forced or distressed sale. The appraisal should reflect this, providing a credible valuation for the probate process.