Asset Inventory and Valuation Services

In the world of federal estate tax, as well as for Nebraska Inheritance Tax purposes, one essential key in the process is valuation. The most common valuation issue for federal estate tax purposes and Nebraska Inheritance Tax purposes is valuation as of the date of death (DOD).

DOD valuation, in some cases involves a specific process. In the case of bank accounts, etc., it involves a snapshot on the date of death for cash accounts, along with any applicable accrued interest to date of death. With respect to marketable securities, there is a specific process for valuation that the IRS relies on, and the Nebraska county attorneys and probate courts follow suit. We utilize our valuation software, EstateVal, for valuing marketable securities at DOD. The IRS uses the same software.

For other assets, such as real estate or business entities, the DOD valuation is not as cut and dry. In such instances, engaging real estate appraisers, valuation experts, business appraisers, and the like become acutely important. We hold key relationships with many such experts, and we can partner with such to determine DOD valuations.

In some cases, the federal estate tax world involves a term called Alternate Valuation. This involves a valuation of the applicable assets at a specific time interval, that is six (6) months after DOD. If such asset was sold between DOD and the 6-month date, the sales price is used as such Alternate Valuation Date.In certain instances, making the Alternate Valuation election can save significant federal estate tax dollars.

In other cases, the issue of a retained life interest (IRC §2036) comes up. This complex issue is a major tax matters issue between clients and the IRS. Life interests, remainder interests, life estates, pre-mortem interests, post-mortems interests, gifts, voting and non-voting interests, and related and underlying subset issues all play a key role in estate and tax planning. Accurately researching these issues is imperative. These issues typically tie back to valuation.

Because the DOD (and Alternate) Valuation traditionally leads to a step-up in basis of estate (and qualifying trust) assets, the accurate determination of such is paramount. The step-up in basis is one of the most important aspects of wealth preservation and asset planning.

We have extensive experience composing Asset Inventories for law firms to use with Court-required Inventories as well as for part of the Inheritance Tax Determinations. At the same time, these Asset Inventories can serve as the basis of the federal estate tax return (Form 706). Our Asset Inventories benefit clients, law firms, CPA firms, fiduciaries (individual and corporate), and estate/trust beneficiaries. Valuation is arguably the fundamental contention with the IRS. Experienced, credible, good-faith and accurate valuation is the core for estate and trust planning success.

The Fiduciary Consultant offers collaborative services to legal, accounting, and corporate fiduciary professionals.

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