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Know your value: Calculating your estate

To know what estate taxes your estate might end up owing, it's important to be aware of the overall value of your estate. There are two dates which may be able to be used for setting estate value when it comes to the federal estate tax, either the time of your death or (if it would lower estate value) an alternate valuation date. The first is the actual date of death of the individual, while the second is six months following the date of death.

There are reasons to value an estate at different times. For instance, if many of your assets could increase in value over time, the alternate valuation date might not be a good fit. On the other hand, if many of your assets decrease in value over time, waiting for the alternate valuation date may make more sense.

Is it important to choose one date over the other?

The reason personal representatives choose one date over the other often comes down to cost. Assets losing value over time might be better valued six months after death, while those increasing in value might be better valued at the time of death. This could help save a family money in taxes.

If a decision is made to sell an item within six months of a person's death, the sale price of that asset has to be used as its value.

Keep in mind that if an alternate valuation date is used for valuation, it could have capital gain tax implications for beneficiaries.

Understanding estate taxes and the implications of valuation can be complicated, so it's important to talk to a professional about what works best for your situation.

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Sandusky Office
165 East Washington Row
Sandusky, OH 44870

Phone: 419-504-0052
Phone: 419-625-8324
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Port Clinton, OH 43452

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