With the gift and estate tax exemption currently at $5.43 million, you might think that estate valuations are less important. But even if you believe that your estate’s value is under the exemption amount, here are three reasons to determine the value of your assets:
- You may be surprised just how much your estate is actually worth. For example, if you own an insurance policy on your life (rather than owning the policy in an irrevocable life insurance trust), the death benefit will be included in your estate, which may be enough to trigger estate tax liability.
- Obtaining a qualified appraisal can limit the IRS’s ability to revalue your assets. For assets that are difficult to value — such as closely held business interests or real estate — the best way to satisfy the IRS’s adequate-disclosure requirements and avoid an IRS challenge is to include a qualified professional appraisal with your gift-tax return.
- Knowing the value of your assets can help you distribute the property according to your goals. Suppose you wish to divide your assets equally among your children. Unless you know what your assets are worth, there’s no way to be sure you’re treating your children fairly.
We’d be pleased to help you get started valuing your assets. Let us know if we can be of assistance.