Hiring an appraiser to value an estate
You've just inherited your grandmother's antique desk, or your father's coin collection. While the sentimental value may be obvious, the financial value may not be. You could be looking at a considerable financial windfall or just another pretty painting that's hardly worth more than the cost of the frame.
A professional appraisal can help you decide if you should toss it or treasure it.
It pays to know the value of what you own or inherit -- whether you need to purchase insurance, divide up your assets, value an estate or determine the worth of charitable tax deductions. And in many cases, an appraisal is required -- to obtain insurance or to write off taxes on donated items that exceed a certain amount, for example.
David Goodis, CEO of software company Revelex Corp., hired an appraiser after his father died, and he took a look at what was in the estate. "My father had a lot of what I call 'blind' items: paintings, statues, jewelry -- and a lot of items from my grandparents," he says. "I had no idea what they were worth."
Why an appraiser?
An appraiser was able to help Goodis answer his immediate questions about the value of items in his father's estate and then prevent him from making mistakes. "My first concern was, what is all this stuff worth, and second, what should I keep? What would appreciate in value? What is irreplaceable? Where is the market soft? My appraiser gave me unbelievably valuable advice," he says.
"I was going into it blind and I was grieving, so that's a vulnerable position. I wanted someone I could trust who is also knowledgeable. I knew there was value in the estate; I just didn't know what it was," he says.
Andrew Kravit, president of Kravit Estate Holdings and the appraiser who helped Goodis, says estate valuations aren't always done after death. "Some people want to know the value while they're alive so they can divide the estate evenly," he says. "In a lot of situations, we help avoid complications in the family."
Internet offers limited information
Although many inheritors think they can go on the Internet and find out the value of specific items, there's rarely enough detail to make an apples-to-apples comparison, Kravit says. "Almost everyone who inherits finds out that items are worth less than they thought. The original owners are the level-headed ones," he adds. "Inheritors see things online and think they're worth more, but different items look the same on the Internet. For example, if you have a Patek Philippe watch from the '60s, you need to know if the dial is original, what the metal is and details about the specific model."
Art, in particular, can be difficult to appraise because each is a unique piece, Kravit says. "A lot depends on the subject matter, the period, the condition; there are a lot of intricacies involved."
Riches lurk in unexpected places
Gayle Skluzacek, principal and executive appraiser of Abigail Hartmann Associates, says the process of valuing an estate can lead to some unexpected discoveries. "As people get older, they forget where they put things," she says. "I've often found jewelry or coins hidden throughout the house -- under a mattress or in pockets. Never give away clothes without looking in the pockets first."
One woman came to her with a painting she had purchased in the 1960s, but Skluzacek discovered a more valuable work of art on the backside. "The painting on the front was probably worth $80,000, but the one on the back was worth $7.5 million."
But more common, she says, is the flip side of the discovery. "People think their family history is valuable. Family history itself has no value. Just because Great Grandma had it, doesn't mean someone wants to buy it."
Unique value of sentimental favorites
Many of the heirs she advises keep items for the sentimental, rather than monetary, value. "They appreciate the piece just because it was Mummy's," Skluzacek says.