Estates and how they are valued
Over the past 15 years we at The Breus Group have been privileged to have been asked to appraise some of the premier estates in the country. These estates have included the contents of the largest house in Wisconsin (over 34,000 square feet of living space) as well as the Denver estate which included among the art and armor the largest, the most diverse and the most valuable collection of whiskey in the country.
Individual estate items include documentary films donated to The Football Hall of Fame and Adolph Hitler’s copy of the highlights of the 1936 Olympics donated to The Holocaust Museum in Washington, D.C. There was also a recently illustrated and published Saint John’s Bible, a 21st Dynasty Egyptian Ushabati statue and a famous Hollywood’s giant’s Oscar, Emmys and Grammys.
From estates we have sold, an Ansel Adams mural, an archive of 6,000 images from the honored naturalist photographer, Tom Brakefield, a Houdon bust of Benjamin Franklin, 20 pianos built from the 17th century to the present, letters from Margaret Mitchel, an archive of personal letters from J.D. Salinger and a 1676 letter from a soldier killed in the first Continental conflict, The King Philip’s War.
VALUATION METHODS:
For estate tax……. Fair Market Value:
Fair market value is defined as the gross price that property would sell for on the open market between a willing buyer and willing seller, with neither being required to act, within reasonable timing and both having reasonable knowledge of the relevant facts. This value includes all fees and sales commissions. It is important to recognize that this is a gross figure, usually 25% to 30% higher than the monies that will ultimately be received by the consignor. This market suggests an “orderly event”, one that allows for proper announcement and time for preparation and organization. When large quantities of the same objects are being offered (same artist, etc.) blockage discounts will be recognized in the appraisal.
For equitable distribution,.. Marketable Cash Value:
This is fair market value but net of all expenses. This value excludes all fees, costs and sales commissions and addresses the marketability of questionable items. As the value so derived represents the actual proceeds that will be paid to the seller after the sale which is in some cases 25% to 30% less than sale or hammer price, this method is most often used in equitable distribution as well as divorce settlements.
For casualty insurance for the estate,.. Replacement Value:
This is the amount it would cost to replace an item with one of similar and like quality, age and provenance, purchased in the most similar and appropriate marketplace to the original within a specific and limited amount of time. Replacement value is generally the highest valuation assigned to personal property and is used in cases of loss or theft.
For immediate sale after distribution ….. Liquidation Value:
Liquidation value is the sales revenue achieved within an immediate and specified period