How Do You Determine the Value of a Florida Probate Estate?
The famous musician Prince died in 2016. Yet even now in 2021, his probate estate remains in legal limbo. Prince died without leaving a will and his estate has six surviving siblings, who have spent the past four-plus years trying to sort out his estate.
One of the key issues, according to a recent report from the Associated Press, is the actual value of Prince’s estate. The estate’s corporate administrator submitted documentation valuing the estate at $82.3 million. The Internal Revenue Service, however, claims the estate is worth nearly double that amount, $163.2 million.
Why does this matter to the IRS? Because the federal government levies an estate tax on wealthy decedents. So if the IRS valuation is correct, the estate will owe the government $32.4 million in additional estate tax, meaning that money will not go to Prince’s siblings.
Expert Appraisal Is Often Necessary–But Not Always Foolproof
Even when an estate does not have tens of millions of dollars in assets, it is still important to provide an accurate valuation for the benefit of the estate’s heirs and the probate court. Indeed, if you are preparing your own estate plan, it is a good idea to take stock of what you own and its current value, so you have at least a rough idea of how much you have to leave your heirs.
A question we often get is, “How do you properly value a probate estate?” The answer really depends on the type of property involved. Cash assets like bank accounts are simple. The probate value is based on the account balance on the date of the owner’s death. More complex assets, such as houses or antiques, typically need to be appraised by a qualified expert. And some assets, like cars, can be valued using non-expert methods such as looking up the Kelley Blue Book price.
One area where even expert appraisal can prove tricky, however, is when dealing with “intangible assets,” such as copyrights, patents, and trademarks. This is the main issue fueling the dispute between the IRS and the Prince estate. Prince left behind a substantial catalog of musical publishing rights. Determining how much such rights are worth can be “more of an art than a sciences,” as one estate planning lawyer told the Associated Press.
Speak with a Florida Estate Litigation Lawyer Today
It is also important to note that not all of a person’s assets will necessarily become part of their probate estate. If you have a retirement account, life insurance policy, or any assets previously placed into a revocable trust, those assets typically pass outside of your will. So while you may have a small or negligible probate estate, you may still have substantial non-probate assets to leave to your loved ones.
If you have any questions about the valuation of probate assets, or are involved in an active dispute over a probate matter, and need to speak with a qualified Pompano Beach estate and trust litigation attorney, contact the offices of Mark R. Manceri, P.A., Attorney at Law, today to schedule a consultation.
Source:
sun-sentinel.com/features/celebrity/ct-ent-prince-estate-undervalued-says-irs-20210103-bys3y7bv3jczvcsze73ya6lvvm-story.html
