How do you value assets uniqueto â€œyouâ€ and even assets that, for all intents and purposes, are you?
From a human interestperspective, if nothing else, you will want to read about the estates ofMichael Jackson and J.D. Salinger as reported in a recent article in The New York Times titled â€œPutting an Estate Value on the Assets Uniqueto You.â€
It seems there is a commonalitybetween Michael Jackson, the late king of pop, and J.D. Salinger, the lateauthor of The Catcher in the Rye. Beyond their fame and [relatively] recentpassing, the value of both estates has been a moving target with the IRS solelyas a result of their passing.
In the case of Jackson, hisestate was rather valuable at the time of his death. Nevertheless, the estatevalue has continued to skyrocket with ongoing IRS scrutiny. The initialvaluation of the Jackson estate came to a mere $200 million. However, with thebenefit of several intervening years of high sales driven largely by animproving image of the late Jackson (an image not driven by scandal, you mightsay) the IRS has come to value the estate at $700 million. The estate was notworth as much when he passed and only shot up in value because of his passing(and an economic upswing). So, which value is fair?
If the estate value does notcome until well after, or well before the time of death, at which time shouldit be valued and how do you plan for that?
The Jackson estate value isnewsworthy because of who he was, but the situation is not all that uncommon.
Intangible assets often faceradical valuation spikes. Think intellectual property and patents, as commonexamples.
On the other side of the coin,there can be plummeting estate values, such as when a business owner dies. Thesole-proprietorship may be valuable when the owner is alive, since the businessis them. However, that is hardly areasonable basis for valuation and taxation once they're gone.
Indeed, the valuation of manyestates can be more of an art than a science.
At IdahoEstate Planning we are the expertsyou need to know and trust. Work with us and we'll put together a plan thatworks for you and your loved ones. Remember, goodplanning is no accident.