Disclaimer: This article provides general information about Tennessee probate and does not constitute legal advice. Consult a licensed attorney for guidance tailored to your situation.
Detailed Answer
Under Tennessee probate law, the personal representative must determine the fair market value (FMV) of each item of a decedent’s personal property as of the date of death. Tennessee Code Annotated § 30-1-117 defines FMV as “the price at which property would change hands between a willing seller and a willing buyer, neither being under any compulsion to buy or sell, and both having reasonable knowledge of relevant facts.” For the official statute, see Tenn. Code Ann. § 30-1-117.
In practice, executors and administrators follow these steps to calculate FMV:
- Hire a qualified appraiser licensed or experienced in the specific type of property (antiques, art, jewelry, vehicles, etc.).
- Use industry-standard price guides (for example, Kelley Blue Book for automobiles or NADA guides).
- Review recent sales of comparable items at reputable auction houses or online marketplaces.
- Obtain written opinions from dealers or brokers who specialize in the property’s category.
Once values are gathered, the personal representative files an inventory and appraisal with the probate court in accordance with Tenn. Code Ann. § 30-1-116. The court clerk or judge reviews the submissions. If a value appears unreasonably low or high, the court may request supplemental affidavits or order an additional appraisal. Interested parties can challenge valuations by filing a petition and presenting evidence at a hearing.
Accurate FMV assignments are critical. They affect estate tax calculations, the settlement of creditor claims, and the fair distribution of assets to beneficiaries. Under Tennessee’s uniform probate procedures, undervaluation can trigger creditor objections, while overvaluation may increase tax liability.
Helpful Hints
- Begin the valuation process promptly after appointment to avoid probate delays.
- Keep thorough records of each appraisal source, including appraiser qualifications and dates.
- Consult a professional appraiser for high-value or unique items to ensure accuracy.
- Contact the local probate clerk’s office to learn specific inventory and appraisal filing requirements.
- Maintain clear communications and written documentation of all valuation activities.
- If beneficiaries disagree on values, consider informal mediation before pursuing a formal court dispute.