How to Appraise an Estate’s Intangible Assets
As the executor of an estate, you must value the estate’s intangible property at the time of the decedent’s death. First compile a complete list of the estate’s intangible property, such as bank and brokerage accounts and stocks, bonds, or mutual funds. Then, use your calculator to add up the assets and determine what the intangible assets were worth on the date of death.
Determine the value of a decedent’s bank accounts
Figuring out how much was in each bank account on the date of death isn’t too difficult. Just send a letter to the bank explaining what you want, together with a copy of the death certificate and your appointment as executor. Be sure to request the balance at the date of death plus any interest that has accrued between the last payment date and the date of death.
The decedent may have written checks prior to death that hadn’t cleared the bank by the date of death. In this case, adjust for these withdrawals by subtracting them from the balance given to you by the bank. Of course, in the interest of showing all your work, list the bank’s balance and then the offsetting checks.
Determine the value of a decedent’s securities
Valuing securities, such as stocks, bonds, and mutual funds, isn’t quite as easy. When determining their value, you’re required to take an average of the high and low costs for the date of death and then multiply it by the size of the holding.
For example, if your decedent held 50 shares of XYZ Corporation, and on the date of death, it traded at a high value of $50 and a low value of $40, the average cost per share would be $45. When multiplied by the 50 shares owned, the total value of that holding on the date of death would be $2,250.
If the decedent died on a weekend or holiday, you have to average the average cost on the last trading day before death and the first trading day after death in order to arrive at the date-of-death value.
If the decedent held securities in a brokerage account, you may be able to obtain a valuation from the broker as of the date of death, especially if you ask for it as soon after the death as possible. Be certain the broker understands that this is a date-of death-valuation, though, because otherwise he or she will give you the closing price for that day, not an average of the high and low costs.
Another source for the date-of-death high and low of a stock or bond is the Wall Street Journal issue from your decedent’s date of death, which is available at your local library if you don’t have a subscription. You can also use the Internet to obtain date-of-death values or alternate valuation for stocks and bonds, including municipal bonds.