Determining the Value of Assets in Michigan Estates

Under federal law, the valuation of assets must be conducted in accordance with the provisions of the Internal Revenue Code. Every estate, regardless of size, is subject to these same valuation standards—even when no federal estate tax return is required.

Generally, the fair market value of an asset is the price a willing buyer would pay a willing seller at the time of the owner’s death, assuming neither party is under any pressure to buy or sell. This standard applies to all property types, from real estate and business holdings to securities, retirement accounts, and personal items such as jewelry or vehicles.

While some assets are straightforward to value—such as bank accounts or cash equivalents—others, like closely held businesses or investment properties, may require professional appraisals or expert analysis to determine accurate market value. Our firm works with trusted appraisers and financial professionals to ensure these valuations are correct and well-documented.

The value of an estate is typically based on the date of death, but federal tax law allows an alternative valuation date under specific circumstances. This alternate date is exactly six months after the date of death, and if used, it must apply to all assets within the estate—without exception.

Both the date-of-death and alternate-date values must be documented, since the Internal Revenue Service requires a comparison to determine eligibility. The alternate valuation date can only be used if it results in both a lower overall estate value and a reduced amount of estate tax owed.

For estates passing entirely to a surviving spouse or for those below the federal estate tax exemption threshold, only the date-of-death valuation can be used. Our attorneys help clients evaluate which date is most appropriate and ensure that the required supporting documentation is properly completed and filed.

All property owned by the decedent at the time of death must be included in the estate valuation, regardless of where it is located or how it is titled. This includes:

• Real estate, automobiles, boats, and other tangible property
• Stocks, bonds, and brokerage accounts
• Retirement accounts such as IRAs and pension plans
• Life insurance proceeds payable to the estate
• Income tax refunds or pending wages
• Personal property such as jewelry, furniture, and artwork

Even tax-exempt investments like municipal bonds are included for estate tax purposes, though they may not produce taxable income.

If the deceased was married, only half of any community property and all of his or her separate property are included in the estate valuation. Assets held in joint tenancy or those with beneficiary designations—such as life insurance policies or transfer-on-death accounts—may avoid probate but are still considered part of the estate for tax purposes.

When partial ownership exists, such as a one-third interest in a parcel of land, only that portion must be valued. Our attorneys assist with determining ownership percentages, verifying titles, and ensuring each asset’s valuation reflects its true proportionate share of the estate.

Determining asset values requires both precision and documentation. Inaccurate or incomplete valuations can lead to tax penalties, disputes among beneficiaries, or delays in the probate process. The legal representatives of an estate are responsible for substantiating all reported values, especially in cases involving joint ownership or claims of shared property.

At Mihelich & Kavanaugh, PLC, we help executors and administrators meet their obligations by coordinating appraisals, collecting financial statements, and preparing detailed valuation summaries for submission to the court or tax authorities. We take every measure to ensure full compliance with federal and Michigan estate laws while protecting the estate’s interests and minimizing potential tax exposure.

If you’ve been named an executor or are handling the estate of a loved one, understanding how to properly value assets can be complex and time-sensitive. The attorneys at Mihelich & Kavanaugh, PLC provide comprehensive probate and estate administration support throughout Michigan. We’ll guide you through the valuation process, help you determine whether an estate tax return is required, and ensure all documentation is completed accurately and on time.

Call our office today or fill out our secure online form to schedule a consultation. Let us help you bring clarity and confidence to every stage of estate administration.