There are many cases dealing with probate, which remains a highly sensitive matter for several reasons, including estimating the value of the deceased’s estate. One of the many questions that may come up during this process is whether an appraiser is required when undertaking probate in Canada. This paper aims to examine the conditions under which an appraiser may be necessary, the kind of appraisals that may be useful, and the advantages of hiring an appraiser. Researching these elements will be useful in making appropriate decisions, especially by the laws of Canada.
Understanding Probate in Canada
Probate is the Legal procedure for identifying a deceased’s will and managing his property. It means ascertaining the identity of the deceased’s property, settling the dues and taxes and distributing the rest to those who empowered the executor. It is under the supervision of a court, and it, in a way, helps to see to it that the deceased’s assets are administered in a manner he/she would have preferred.
When Is an Appraisal Necessary?
Probate might require an appraisal to be conducted in order to arrive at the value of certain properties in the deceased’s estate. It is required if the item is highly valuable, like real estate, art, jewellery or business interests, among other things.
Here are the circumstances that would warrant an appraisal:
Real Estate
In most cases, if the deceased had some interest in real estate, the fair market value of such property may need to be established through an appraisal.
This value is of great importance for the following reasons:
Taxation: In the process of determining value addition or depreciation of the property, the appraisal of the property comes in handy in the computation of capital gains tax as well as other taxes.
Estate Valuation: It is crucial that estates be correctly evaluated for the division to the deceased’s will in a rightful manner.
Legal Requirement: Depending on the estate’s location, in some areas in Canada, it may be mandatory to have an appraisal, especially of the properties included in the estates.
High-Value Personal Property
Other goods which may need evaluation include ornaments, paintings, rings, bracelets, necklaces, other valuables and trinkets, and antiques. These assets can, therefore, be quite hard to evaluate because of the nature and cyclicity of their market. The competitive advantage of getting an appraiser with specific knowledge about the type of property, whether commercial or residential, is that the appraiser can make a precise valuation.
Business Interests
If the deceased person was involved in any business or owned any business stake, then an appraisal might be required to ascertain the value of the business assets. Business appraisals can be difficult sometimes and may need help from people with more knowledge in a certain industry and experience in the field of finance.
Types of Appraisals
As with all valuation practices, there are various kinds of appraisals with the right type appropriate to certain ways of business assets.
Real Estate Appraisal
A real estate appraiser assesses the worth of a property according to its location, size, state, and market trends. This re-evaluation is normally done by an experienced endorsee qualified for practicing real estate valuation.
Personal Property Appraisal
In the case of goods such as art pieces, jewellery, and other collectibles, a personal property appraiser appraises the property. Such valuators usually subordinate themselves to certain types of products and possess the appropriate experience to use accurate figures in their appraisals.
Business Appraisal
Among the business appraisals, there may be more complicated ones, which imply using asset-based, income-based, or market-based approaches. These evaluations require the involvement of highly qualified personnel – accountants, field consultants, etc.
Benefits of Hiring a Professional Appraiser
Even though it may be costly to approach a professional for an appraisal, there are some advantages to doing so.
Accurate Valuation
Only professional and recognized appraisers have the tools and experience to make the valuations. This is very important for taxation and to create equal distribution of Properties and assets.
Legal Compliance
It may also be useful to determine that an appraisal has been made to avoid getting into difficulties such as disagreements or legal challenges at the time of probate.
Peace of Mind
Thus, hiring the service of a professional appraiser to work with can be of great help to the beneficiaries as well as the executors, solving all possible problems related to the incorrect estimation of the value of the property and the improper issuing of the relevant documents during the entire process of probate.
Choosing the Right Appraiser
If an appraisal is necessary, it is important to find the right one to do it.
Consider the following factors:
Qualifications and Experience
In performing business valuations, hiring an appraiser who is licensed and experienced in valuing a particular asset is important. Thus, a real estate appraiser should have extensive knowledge about property appraisal, while an art appraiser should have considerable information on art-related markets.
Professional Affiliations
Firstly, one should determine whether the appraiser is a member of organized body such as the Appraisal Institute of Canada or the Canadian Society of Appraisers. Such affiliations suggest practitioner’s allegiance to the code of ethics.
Reputation and References
It is recommended that the appraiser’s credentials be checked and asked for references. It is always useful to find out from previous users if the appraiser report was competent and trustworthy.