What Is a Date-of-Death Appraisal?

A date-of-death appraisal establishes the fair market value of real estate as of the day its owner died, rather than as of today. Because that date has almost always passed by the time anyone orders the appraisal, it is usually a retrospective appraisal — an opinion of value developed for a historical effective date, using the property and market conditions that existed then.

Why an estate may need one

To document the value heirs inherit

When real estate passes to heirs, its tax basis is generally adjusted to its fair market value as of the date of death. That figure matters later: if the property is eventually sold, any gain is measured against that value rather than against what the deceased originally paid for it. A well-supported appraisal creates a contemporaneous record of that number, prepared by a licensed appraiser, rather than an estimate reconstructed years afterward.

To settle the estate fairly

Where several heirs have an interest in the same property, an independent opinion of value gives the personal representative a defensible figure to work from — whether the property is sold, divided, or bought out by one heir. Because the appraiser has no stake in the outcome, the number does not favour any party.

To support filings and accountings

Whether a particular estate must file a return, and what documentation that requires, depends on the size of the estate and its circumstances. Your attorney or CPA is the right person to advise on that — it is not something an appraiser determines. What we can say is that where a real estate valuation is called for, it is generally expected to come from a licensed appraiser rather than an informal estimate.

What "date of death" means as an effective date

Every appraisal has an effective date: the date the opinion of value applies to. In a typical mortgage appraisal, that is the date of inspection. In a date-of-death assignment it is the date the owner died, which may be months or years before the appraiser ever sees the property.

The question being answered is therefore not "what is this property worth now?" but "what was this property worth on that particular date?" Those can be very different figures, and the difference is not a matter of adjusting today's value by some general rate of change. The appraiser researches what comparable properties actually sold for around that date, and what condition the subject property was in at the time.

When the date of death was years ago

Retrospective assignments are routine, and a date several years in the past is not by itself an obstacle. Feasibility depends on three things:

• Available market data. Whether enough comparable sales from around the effective date can be researched and verified.
• Evidence of condition. What the property was actually like at that date — photographs, records, prior appraisals, insurance documents or listing history all help.
• What has changed since. If the property has been renovated, damaged, subdivided or partly sold, the appraiser must account for the difference between its current state and its state at the effective date.

Where the record is thin, that limitation is disclosed in the report rather than papered over.

Why a tax assessment or online estimate usually isn't enough

Three sources are often reached for first, and each has real limits for this purpose:

• County assessed value is produced for property taxation on its own cycle and methodology. It is not an opinion of market value on a specific date, and it is not prepared by an appraiser engaged for your assignment.
• Automated online estimates are generated from current public data. They cannot set a historical effective date, cannot see condition, and handle acreage, outbuildings and atypical properties poorly — which describes a great many West Virginia properties.
• A broker price opinion is prepared by a real estate licensee for marketing purposes. It is a useful document, but it is not an appraisal by a licensed appraiser and is generally not developed to appraisal standards.

What to have ready

You do not need all of this before making contact, and missing items are not a problem. It simply helps to gather what you have:

How soon should one be ordered?

Sooner is easier. The closer the inspection is to the effective date, the more directly the appraiser can observe what the property was like, and the more likely records and recollections are still to hand. Estates are rarely settled quickly, though, and a retrospective appraisal remains entirely possible later — it simply relies more heavily on documentation.

Who can order one

An executor, administrator, trustee, heir, attorney or CPA can all order an appraisal directly. No professional referral is required. If you are a property owner or family member handling an estate yourself, you are welcome to make contact directly.

Serving West Virginia

Kanawha • Putnam • Mason • Jackson • Lincoln • Cabell • Monroe Counties

Other areas considered upon request.

This article is general information about the appraisal process. It is not legal, tax or accounting advice, and it does not establish an appraiser-client relationship. Please consult your attorney or CPA regarding the requirements that apply to a particular estate.