Determining the value of all assets is important to determine whether estate tax is due (see “Planning to Avoid Estate Tax” in Chapter Nine), and to establish your new basis. Estate tax and basis are determined using the date-of-death value of your spouse’s property.

To ascertain date-of-death value:

1. Review investment account statements (including IRAs and other retirement accounts) for the date of death value of account assets.
2. For stocks and bonds, the date of death value is the average between the high and low for the date of death. If your spouse died on the weekend, take the high and low for Friday and the high and low for Monday and divide by four.
3. Obtain certified appraisals on all real estate. The state equalized value (or other tax value used in your community) and a “market analysis” prepared by a real estate agent are not sufficient.
4. Obtain certified appraisals on all closely held business interests.
5. Depending on the size of the estate, you may also need to obtain an appraisal of your spouse’s personal property, especially if your spouse owned any collectibles of value (art, wine, vintage cars, etc.).
6. The value of life insurance proceeds is reflected on the Form 712.
7. Save the stock page from your local daily newspaper for the day of your spouse’s death. If he died on a weekend, save Friday and Monday’s paper.
8. You may use the sale price as the date-of-death value of any asset sold within nine months of death as long as the purchaser is an unrelated third party and the sale was “arm’s length” (i.e., not a below market sale to beat the tax man).