When it comes to residential real estate, there are different types of appraisals that will be necessary depending on the purpose of the appraisal. Estate appraisals are typically done when a property owner passes away and their assets need to be valued for tax purposes. A trust appraisal, on the other hand, usually occurs during the settling of a trust or estate. It is important for property owners and their heirs or beneficiaries to understand the difference between the two types of appraisals.
One of the primary differences between estate appraisals and trust appraisals is the purpose for which they are being done. Estate appraisals are used to determine the value of the property for estate tax purposes. This means that the appraiser will look at the value of the property as of the date of the owner's death. In contrast, a trust appraisal is usually done to determine the value of the property at the time it is transferred to the beneficiaries.
Another difference between the two types of appraisals is the level of scrutiny that is involved. Estate appraisals are often subject to greater scrutiny than trust appraisals because they are used for tax purposes. The IRS may review the appraisal to ensure that it is accurate and consistent with other appraisals of similar properties in the area. Trust appraisals, on the other hand, may be less scrutinized because they are typically done as part of the settling of a trust or estate and may not be subject to the same level of oversight.
In conclusion, estate appraisals and trust appraisals are two different types of appraisals that serve different purposes in the settling of a trust or estate. A property owner and their heirs or beneficiaries should understand the difference between the two types of appraisals to ensure that they are getting the appropriate appraisal for their situation. Both types of appraisals require a qualified appraiser with experience in residential real estate.