THE ROLE OF PROFESSIONAL VALUATIONS IN ESTATE PLANNING AND ADMINISTRATION

Many estates and estates-to-be contain capital properties such as marketable securities, real estate property and with greater frequency recently, shares of privately held businesses.

With any estate, particularly those containing capital property, the valuation of these properties and the estimate of the potential tax liability are very important to the administration of the estate and its beneficiaries.

The valuation of marketable securities may be as easy as referring to recently quoted market prices available on many finance search engines. For those securities for which market quotes are difficult to obtain, you can access information from an investment counselor or anyone accredited in the investment field.

The valuation of real estate property can be made complicated by virtue of the type of property, current use, future use and how it will be inherited. The tendency is to rely on drive-bys and simple comparison to recent sale of equivalent properties. In many instances, that is often not enough and getting a certified appraisal is warranted. A certified appraiser will value the property in question giving all of these issues due consideration.

The valuation of a privately held business really requires a trained professional, preferably with a valuation designation and some experience with the industry sector which the business operates in. Don’t try to do this yourself or rely on friends who purport to know the business but have no valuation training or experience, the consequences can be very costly to the estate and the beneficiaries.

www.allaboutestatees.ca

by Steven Frye