How to Value the Assets of an Estate

Executors and Administrators will be asked to prepare an inventory of assets and liabilities which will later be listed in an Affidavit that is filed with the Court.  How do you know what value to give these assets?

There are two important principles to consider when valuing these assets.  First, you have a duty to be accurate and fair to the beneficiaries.  Giving artificially low values to keep probate fees lower might get you in trouble since you will need to swear or affirm the truth of those values.  Second, the inventory will be used by a number of parties, including accountants, creditors, beneficiaries, tax advisors, and the judge.

The Affidavit that is filed with the Court will include only the deceased's assets that form part of the estate.  It does not include assets that pass outside of the estate, such as assets held in joint tenancy, RRSPs and RRIFs with beneficiary designations, insurance proceeds, and survivor benefits under the Canada Pension Plan.  Only assets that form part of the estate are subject to probate fees and claims against the estate.

In general, the date of death is the date for valuing assets.  For real estate, the most recent assessment from BC Assessment authority is usually acceptable.  However, the personal representative will want to hire a real estate appraiser if the assessment is quite a bit lower than market value as there may be tax issues if there is a large difference between the reported value and the sale price (i.e., capital gains tax).

For assets that are difficult to value, like jewellery, artwork, vehicles, antiques, and other valuable collections, the personal representative should consult a professional appraiser for an evaluation.  It is important for a personal representative to be as accurate as possible in assessing the value of estate assets since it will be used to properly assess both probate fees and taxes.