Mr. J. called his family attorney as his mother sadly had passed away after a long illness and as executor; he needed to settle her estate. He was the eldest of three siblings who all lived within a ten mile radius of their mother’s home. Mr. J’s mother’s home was a large five bedroom home outside of a major city and during her lifetime, she spent many happy years amassing an eclectic collection. She had a large collection of late 19th century American silver, furniture by George Nakashima, Post-War art, jewelry, oriental rugs and Chinese Buddhas. The consensus among Mr. J’s siblings was varied: one brother wanted to sell everything quickly and clean out the house and one sister wanted several pieces for herself and her family. Mr. J. turned to his attorney for advice on how to handle the estate and the desires of his immediate family. In this all not to unfamiliar situation, the Trust & Estate (TE) professional provides assistance and advice to their clients. Some points of guidance for the TE professional follow below.
How does one go about finding a reputable personal property appraiser and, importantly, finding one who has the skill set and knowledge base to value the property?
Personal property appraisers may have their own practice, be part of a multi-practitioner group, or be an employee of an auction house. Currently, and unlike appraisers who value real estate or real property, the industry is not held to government regulation. However, there is a movement among personal property appraisers to join professional appraisal organizations that holds its members to high standards of practice and education. It is recommended that an appraiser be engaged who is either an accredited or certified member of either Appraisers Association of America (AAA), The International Society of Appraisers (ISA) or the American Society of Appraisers (ASA). If an appraiser is a member of one of these organizations, they are considered a “qualified appraiser” which is a designation the IRS favors. To join these organizations sample reports for different appraisal needs are reviewed and approved; educational standards must be met; and each candidate must have completed and passed a course on the Uniform Standards of Appraisal Practice (USPAP). To select an appraiser from one of these organizations assures clients that the report will be of a certain quality, reliable, and trustworthy.
To select an appraiser that has the necessary knowledge base for a client’s collection, questions need to be asked of the client. Hearing that a client was a collector or has collections sends up an immediate red flag. What did the decedent collect? As mentioned above Mr. J’s mother enjoyed Post-War art and this needs to be communicated to the appraiser to ensure they have the background or knowledge to value this genre. For someone who collected stamps or coins, the appraiser selected needs the necessary skill set to prepare the report. By asking questions about the property in the home, the “perfect match” can be made between the appraiser/client/TE professional to produce a stress and problem free process.
A few last points to cover with the appraiser before selecting one:
Openly communicating will reduce stress and keep the process free of “bumps in the road.”
Once the appraiser is selected, the TE client can expect the following when the appraisal process begins. The appraiser will arrive at a mutually agreed upon time and often times, may start with a walk-thru of the entire job to understand the scope of work. The appraiser will ask for receipts, prior appraisals or inventories, provenance, and files related to the collection. To the appraiser, these are all important pieces of information that will help develop an opinion of value. Giving the client advance notice of this need saves time and expedites the process. In the case of Mr. J’s need for an estate appraisal, inspection is usually done room-by-room with the appraiser examining each piece, taking multiple pictures, measuring and recording all findings either via computer or pencil & paper. The TE client can expect some disruption as artwork, if possible, will be removed from the wall. Silver will be removed from drawers and protective coverings, examined, counted, photographed and weighed. Again to expedite the inspection process whether in a home or a storage unit, boxed items should be taken out and unwrapped-the collection should be easily accessible.
Procedural practice within an appraisal practice or appraisal department varies but some groups offer the client the opportunity to review a draft before any finals are printed. The TE client is encouraged to review the draft and provide the appraiser with feedback. Once the draft is approved, the number of copies are printed, bound and sent to the appropriate parties. If desired, the report can be notarized.
Mr. J received the appraisal report for tax purposes for the personal property in his mother’s estate that was conducted by an appraiser who was a member of a professional organization and was USPAP compliant. Using the report, he was able to settle questions and make educated decisions about his mother’s collection that were fair to the estate and his siblings. He knew what to expect ahead of time as far as required provenance, receipts, fees, report completion time, and the actual visit making a difficult time a little easier.