KO Appraisal
Guide

Probate Appraisal in California

A probate appraisal establishes the fair market value of real property as of the decedent's date of death. That single number drives the estate's Inventory and Appraisal filed with the court, the heirs' income tax basis under IRC § 1014, and any later court confirmation of a sale. In California, most estate real property is appraised by a probate referee designated by the court under Probate Code § 8902. An independent appraisal is what you bring when that value is disputed, when the estate needs documentation the referee's figure will not supply, or when the property is complicated enough that a summary valuation will not hold up.

What the California probate court actually requires

The personal representative must file an Inventory and Appraisal within four months after letters are first issued to a general personal representative (Prob. Code § 8800). Cash and cash-equivalent items. Money, immediately negotiable instruments, financial institution accounts, money market funds, and lump-sum death proceeds, are appraised by the personal representative under § 8901. Everything else, including real property, is appraised by a probate referee. The State Controller appoints at least one probate referee in each county (§ 400); the court designates which referee serves a given estate, and the personal representative delivers the inventory to that referee for appraisal (§ 8902).

The referee's commission is one-tenth of one percent of the total value of the property the referee appraises for the estate, computed excluding property appraised by the personal representative under § 8901 or by an independent expert under § 8904, plus actual and necessary expenses (§ 8961). The dollar bounds sit in a different section: § 8963 sets a floor of $75 and a ceiling of $10,000 per estate, and permits the court, on the referee's own application, to allow more where the reasonable value of the referee's services exceeds the ceiling.

Two exceptions are commonly misunderstood. Section 8904 lets the personal representative elect an independent expert instead of the referee, but only for a unique, artistic, unusual, or special item of tangible personal property, not for real estate. Section 8903 lets the court waive referee appraisal entirely for good cause, on a noticed petition with a copy of the proposed inventory and appraisal and a statement of good cause attached, filed no later than the time the inventory is delivered to the referee. An independent real estate appraisal is the evidence that supports such a petition; it is not a self-executing substitute for the referee.

Where an independent appraisal does the real work

A referee's assignment is a mass-appraisal function spread across every asset in every estate assigned to that referee, and it frequently does not include an interior inspection. That is adequate for a straightforward tract home. It is often not adequate where the money or the conflict actually is.

  • Heirs disagree with the referee's figure, or with each other, and one beneficiary intends to buy out the others
  • The estate will file a federal Form 706 and needs a report and workfile that can withstand IRS examination
  • A private sale needs court confirmation under Prob. Code § 10309, the property must have been appraised within one year before the confirmation hearing, the valuation date used must fall within that same year, and the offer must be at least 90 percent of that appraised value. Note who performs any reappraisal: § 10309(c) excuses use of a probate referee only where the original appraisal was made by someone other than a referee. Where the referee appraised the property, expect the referee to do the new appraisal as well, and use an independent appraisal as the evidence that the latest appraisal is too high or too low (§ 10309(b)(4))
  • The property is income-producing, agricultural, mixed-use, a partial or undivided interest, or carries unpermitted improvements, deferred maintenance, or access problems
  • The matter is heading toward litigation and someone will have to testify about the value

Date of death, retrospective effective dates, and basis

A probate appraisal is a retrospective assignment: the report is written today, but the effective date is the date of death. USPAP Standards Rule 2-2 requires the report to state the effective date of the appraisal and the date of the report, separately. Advisory Opinion 34, Retrospective and Prospective Value Opinions, illustrates how retrospective opinions are developed. Advisory opinions are guidance on applying USPAP, not binding requirements. The analysis is confined to what the market knew and what sales data existed as of the effective date; later sales can be used to confirm a trend, but the value opinion is anchored in the past.

This matters because IRC § 1014 gives property acquired from a decedent a basis equal to its fair market value on the date of death. A well-documented date-of-death value is what protects the heirs from capital gains tax on appreciation that occurred during the decedent's lifetime. A county assessed value, an automated valuation estimate, or a broker's price opinion is not a fair market value opinion developed under professional appraisal standards, and none of them are what an examiner or an opposing expert will accept.

California has no estate tax. You still need the value

California repealed its inheritance and gift taxes by voter initiative in 1982, and the state's remaining "pick-up" estate tax was tied to the federal credit for state death taxes, which Congress phased out and replaced with a deduction (IRC § 2058). The practical result is that California collects no estate or inheritance tax today. The federal estate tax filing threshold is a separate question, and it is indexed and changes every year, confirm the current figure with the estate's CPA rather than relying on a number you read somewhere.

That produces a recurring and expensive mistake: families conclude that because no state tax is owed, no valuation is needed. The step-up in basis under § 1014 is then claimed years later, when the property sells, and by then the date-of-death market is cold and the supporting evidence is thin. What a delay changes is how much can still be documented and how much of the date-of-death market has to be reconstructed from records rather than observed directly.

Property tax is a separate system. A transfer at death is a change in ownership that triggers reassessment at full cash value under Proposition 13 (Cal. Const. art. XIII A, § 2; Rev. & Tax. Code §§ 60-62, 110.1). Proposition 19 (art. XIII A, § 2.1) and its implementing statute, Rev. & Tax. Code § 63.2, govern the narrowed exclusions from that reassessment for parent-child and grandparent-grandchild transfers. The family home must become the transferee's principal residence within one year, a claim must be filed, and value above the prior taxable value plus a statutory allowance is added back. The county assessor makes its own determination of full cash value; an appraisal can be evidence in that process, but it is not the assessor's determination.

How I work these assignments

I am a California Certified General Real Estate Appraiser, BREA certificate #3005065, designated MAI and SRA, and listed on the ASC National Registry. Appraiser credentials are issued state by state, there is no national appraiser license, so I accept California property only.

I founded KO Appraisal in 2023, after serving as a Senior Real Estate Appraiser at JP Morgan Chase and as an independent fee appraiser at MVT Appraisal. Prior assignments have included estates, condemnation, financing, and due diligence support, for accountants, investment firms, law firms, lenders, and private and public agencies. Property types have included neighborhood and community shopping centers, apartment complexes, single- and multi-tenanted industrial buildings, low- to high-rise office buildings, mixed-use facilities, and vacant land.

Standard turnaround is one to three weeks from engagement. I also provide deposition and expert witness testimony where the value is contested. Office: 600 W Broadway, San Diego, CA 92101. Residential: (760) 685-8036, kevin@koappraisal.com. Commercial: (619) 704-7070, kocommercialappraisal@gmail.com.

Common questions

Do I still need an appraisal if the probate referee already valued the property?
Not always. If the referee's value is reasonable, nobody disputes it, and the estate is comfortably below the federal estate tax filing threshold, an indexed figure that changes annually, so confirm it with the estate's CPA. The Inventory and Appraisal may be all you need. You need an independent appraisal when the referee's figure is contested, when the estate is filing Form 706, when beneficiaries are buying each other out, or when a sale must be confirmed under Prob. Code § 10309 and the existing appraisal is outside the one-year window or is high or low enough to block the transaction.
What date does the appraisal use?
The decedent's date of death, in nearly all probate work. That is the date that fixes basis under IRC § 1014 and the date the Inventory and Appraisal reports. If the estate elects alternate valuation on a federal Form 706, a second effective date six months after death comes into play. That election is available only to estates filing a 706, and only if it decreases both the value of the gross estate and the combined estate and generation-skipping transfer tax after allowable credits (IRC § 2032(c)). Property distributed, sold, exchanged, or otherwise disposed of within that six-month window is valued as of the date of disposition rather than the six-month date (IRC § 2032(a)(1)).
Can you appraise a property that has already been sold?
Yes. A retrospective appraisal does not require access to the property as it exists today. The work is built on the property's condition as of the date of death, reconstructed from listing photographs, MLS records, permit history, prior appraisals, inspection reports, and interviews with people who saw it. A recent arm's-length sale of the subject is meaningful evidence, but it is not automatically the date-of-death value, market movement between the two dates and any post-death repairs or clean-out have to be accounted for.
Will you testify if the value is challenged?
Yes. I provide deposition and expert witness testimony. If litigation is a realistic possibility, say so at engagement. Under USPAP the intended use and intended users are identified at the outset and drive the scope of work, the depth of the workfile, and how the report is written. That is far easier to build in from the start than to retrofit later.
Who wrote this Kevin O'Brien, MAI, SRA. California Certified General Real Estate Appraiser #3005065, issued by the California Bureau of Real Estate Appraisers (BREA). Practicing in San Diego. This page reflects how these assignments are actually handled, not a summary of other people's summaries.
Where this applies Appraiser licensing is state-specific, there is no national appraisal licence, so appraisal engagements here are California properties, primarily San Diego County. The valuation methodology and the federal tax rules described above apply anywhere in the United States; if your property is in another state, you need an appraiser credentialed there, and this page should still tell you what to ask them for.

Sources

Every statutory and regulatory claim on this page traces to one of the following. Where a source could not be confirmed, the claim was removed rather than softened.

  1. Cal. Prob. Code § 8800: the inventory and appraisal shall be filed within four months after letters are first issued to a general personal representative
  2. Cal. Prob. Code § 8901: the personal representative appraises money and cash items, immediately negotiable instruments, financial institution accounts, money market funds, and lump-sum insurance and retirement death proceeds
  3. Cal. Prob. Code § 8902: the personal representative delivers the inventory to the probate referee designated by the court, and the referee appraises all property other than that appraised by the personal representative
  4. Cal. Prob. Code § 400: the Controller shall appoint at least one person in each county to act as a probate referee for the county
  5. Cal. Prob. Code § 8903: the court may, for good cause, waive appraisal by a probate referee on noticed petition, with a copy of the proposed inventory and appraisal and a statement of good cause attached; the application may not be made later than the time the inventory is delivered to the referee
  6. Cal. Prob. Code § 8904: a unique, artistic, unusual, or special item of tangible personal property may, at the election of the personal representative, be appraised by an independent expert instead of the probate referee
  7. Cal. Prob. Code § 8961: referee compensation is a commission of one-tenth of one percent of the total value of the property for each estate appraised, computed excluding property appraised by the personal representative under § 8901 or by an independent expert under § 8904, plus actual and necessary expenses
  8. Cal. Prob. Code § 8963: notwithstanding § 8961, the commission shall be not less than $75 nor more than $10,000 for any estate appraised; on the referee's application the court may allow more if the reasonable value of the services exceeds $10,000
  9. Cal. Prob. Code § 10309: no private sale of real property is confirmed unless the property was appraised within one year before the confirmation hearing, the valuation date used is within that year, and the sum offered is at least 90 percent of that appraised value; subdivision (b) permits a new appraisal, including where the court is satisfied the latest appraisal is too high or too low; subdivision (c) provides that a new appraisal under (b) need not be made by a probate referee if the original appraisal was made by a person other than a probate referee
  10. IRC § 1014: basis of property acquired from a decedent is generally its fair market value at the date of the decedent's death
  11. IRC § 2032(a), (c): alternate valuation: property disposed of within six months after death is valued as of the date of disposition, other property as of the date six months after death; no election unless it decreases both the value of the gross estate and the sum of the estate tax and the generation-skipping transfer tax, reduced by allowable credits
  12. IRC § 2058: deduction for state death taxes, which replaced the former IRC § 2011 credit
  13. Cal. Const. art. XIII A, § 2 and Cal. Rev. & Tax. Code §§ 60-62, 110.1, Proposition 13: a change in ownership triggers reassessment at full cash value
  14. Cal. Const. art. XIII A, § 2.1 and Cal. Rev. & Tax. Code § 63.2, Proposition 19: narrowed parent-child and grandparent-grandchild exclusions from change in ownership, conditioned on the family home becoming the transferee's principal residence within one year and on a timely claim, with value above the prior taxable value plus a statutory allowance added to the new taxable value
  15. USPAP (2024 ed., the current edition) Standards Rule 2-2, the report must state the effective date of the appraisal and the date of the report; Advisory Opinion 34, Retrospective and Prospective Value Opinions: guidance on applying USPAP, non-binding
  16. Cal. Bus. & Prof. Code § 11300 et seq. "This part may be cited as the Real Estate Appraisers' Licensing and Certification Law"; the Bureau of Real Estate Appraisers issues California appraiser credentials under it
  17. Title XI of FIRREA, 12 U.S.C. § 3331 et seq. Federal framework under which the states credential appraisers and the Appraisal Subcommittee maintains the National Registry of state-credentialed appraisers

Related reading

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Typical commercial fees range $2,000–$4,000. Residential and simpler assignments quote lower. Every engagement is quoted in advance, so the figure is known before work begins.

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