Detailed Answer
Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Consult a qualified attorney in Hawaii for guidance on your specific situation.
1. What Is Fair Market Value?
Under Hawaii law, “fair market value” means the price at which property would change hands between a willing buyer and a willing seller, neither under compulsion, both having reasonable knowledge of relevant facts. See HRS §560:1-201(19).
2. Probate Inventory and Appraisement Requirements
The personal representative (PR) must file an inventory and appraisement of the decedent’s assets—both real and personal property—within 60 days after qualification. Personal property must be listed separately with its fair market value as of the date of death. See HRS Art. III, ch. 560.
3. Steps to Calculate Fair Market Value of Personal Property
- Identify Each Item: List jewelry, collectibles, electronics, furniture, vehicles and other tangible personal property.
- Obtain Appraisals: For high-value items (antiques, art, jewelry, vehicles), hire a qualified appraiser licensed or accredited in Hawaii.
- Research Comparable Sales: For common household goods, use recent sales data from auction houses, online marketplaces (e.g., eBay, Craigslist), and retail price guides.
- Adjust for Condition: Deduct for wear and tear, necessary repairs, or obsolescence. Document your basis in writing.
- Document Your Sources: Keep copies of appraisal reports, receipts, photographs, and market data to support the values if challenged.
- Use the Date of Death: All valuations must reflect prices as of the decedent’s date of death, unless the court orders a different valuation date.
4. Common Pitfalls and How to Avoid Them
- Underestimating or overestimating values can expose the PR to personal liability. Use objective evidence.
- Filing late or incomplete inventory may result in court sanctions. Adhere to the 60-day deadline.
- Ignoring specialized items—vehicles, boats, or firearms often require separate valuation methods.
Helpful Hints
- Start valuations early. Complex estates need more time for thorough appraisals.
- Keep a clear chain of custody for personal property to avoid loss or misplacement.
- Consider a backup valuation if the first appraisal is questioned by heirs or the court.
- Consult an estate attorney if values exceed statutory thresholds or if disputes arise.
- Maintain open communication with beneficiaries about how values were determined.