Determining Fair Market Value of Personal Property in a Maine Probate Case
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for advice on your specific situation.
Detailed Answer
When settling a decedent’s estate in Maine, the personal property must be inventoried and valued at its fair market value (FMV) as of the date of death. FMV is defined under Maine’s probate statutes as the price a willing buyer would pay a willing seller, neither under compulsion, with both having reasonable knowledge of the relevant facts.
1. Statutory Framework
Maine’s Uniform Probate Code governs valuation:
- 18-A M.R.S. § 2-705 defines methods for determining value, including FMV.
- 18-A M.R.S. § 1-201(17) adopts the commercial code’s definition of fair market value.
2. Primary Valuation Methods
- Appraisals: Most personal items—antiques, artwork, jewelry—require a professional appraisal. Choose a credentialed appraiser familiar with local Maine markets.
- Comparable Sales: For vehicles, electronics, and common household goods, use sale prices from local dealers, online marketplaces (e.g., eBay), or auction results around the date of death.
- Dealer Quotes: Obtain written estimates from Maine retailers or dealers for items like boats, ATVs, and tools.
- Estate Sales: If property is sold at an estate sale, the gross proceeds (minus sale expenses) often establish FMV if conducted in an open market.
3. Special Situations
If an item has no active market or is unique (e.g., family heirlooms), the personal representative may:
- Gather two or more independent appraisals.
- Document condition, age, provenance, and any defects.
- Use appraisal averages to establish FMV.
4. Filing the Inventory
The personal representative must file a sworn inventory with the probate court listing each item’s FMV and the valuation method used. Under 18-A M.R.S. § 3-603, the court may require additional documentation or reject values it deems unreasonable.
Helpful Hints
- Begin valuation promptly to capture accurate market conditions as of the decedent’s date of death.
- Keep all appraisal reports, dealer quotes, and sale receipts in the estate’s file.
- Engage appraisers who hold professional designations (e.g., ASA, ISA) for high-value items.
- Document your valuation process thoroughly to withstand court or creditor scrutiny.
- When in doubt, consult a probate attorney to avoid potential undervaluation penalties.