Estate planning requires you to make numerous important decisions, each of which can significantly impact your plan. One decision that people frequently underestimate the importance of is whom you choose to use as an appraiser. An appraiser may be needed prior to your death to provide an appraisal for a gift you intend to give. In addition, appraisers are also frequently required to appraise estate assets after your death for the purpose of calculating your estate’s value. While you will obviously have no say with regard to who provides appraisals after your death, you can certainly make the decision about who provides appraisals during your lifetime.
While you are alive, you will likely make numerous gifts to loved ones. In theory, each of these gifts is potentially subject to gift taxes. Gifting during your lifetime, however, lowers your estate value at the time of your death which is why many taxpayers with moderate to large estates choose to make lifetime gifts. If you gift a non-cash gift, you must provide a current market value for the gift for IRS purposes. This is where choosing the right appraiser becomes important.
While you cannot simply choose an appraiser that will provide you will an unrealistic, low-ball, value for an asset, you can retain an appraiser who knows the market for your asset and will provide you with the most advantageous value. For example, if you plan to gift real property, make sure that you hire an appraiser who really understands the constantly fluctuating real estate market and who will not over-value the property based on current trends or anticipated future appreciation.