Trust Appraisal

Appraisals for California living trusts

Trusts and wills both ensure a transfer of assets to beneficiaries. But when assets remain in the deceased's name without a named beneficiary, families must navigate probate: a lengthy, costly court procedure during which asset management halts.

Owning property means your family will face California's probate laws and fees even if you leave a will. Assets held in a trust are immediately accessible to the designated successor, which is why placing a home in a living trust is a smart way to avoid probate.

Professional trust appraisals

KO Appraisal specializes in real estate appraisals for estate planning trusts, offering precise evaluations of fair market value. Attorneys, CPAs, executors, and grantors across California rely on our detailed assessments.

• Compliance with State of California law
• Adherence to IRS standards
• Conformity with United States Treasury Department standards
• Compliance with USPAP, mandatory since July 30, 2018, whose ethics provisions ensure confidentiality and discretion

Keep the valuation current

To divide real estate fairly among heirs, you need the property's current value, especially if it has been years since purchase. Consider updating the appraisal after events like these:

• Significant increases or decreases in property value
• Death of heirs or beneficiaries
• Birth or adoption of new heirs or beneficiaries
• Marriage or divorce
• Changes in trustees, guardians, or personal representatives
• Acquisition or disposal of significant assets
• Children reaching adulthood
• New state laws

Who orders this appraisal

• Trustees
• Successor trustees
• Trust & estate attorneys
• Beneficiaries

The rules that govern it

Probate Code §16003, the duty of impartiality, Where a trust has two or more beneficiaries, the trustee must deal impartially with all of them. This is the single most important reason a trustee orders an appraisal: the moment a trustee sets the number themselves and one beneficiary buys out the others at it, the trustee is personally exposed to the ones who did not benefit. An independent opinion of value protects the trustee at least as much as it prices the asset.

Probate Code §16062, the duty to account, A trustee must account to beneficiaries at least annually, and on other triggering events such as accepting the trust, resigning, removal, or termination. Real property carried at an unsupported figure is exactly what a beneficiary's attorney examines first when an accounting is challenged.

IRC §1014, when a revocable trust becomes irrevocable, On the settlor's death a revocable trust generally becomes irrevocable, and assets included in the estate take a new basis equal to fair market value at that date. That value governs the beneficiaries' eventual capital gains, which is why the valuation matters even where no estate tax is owed, and California levies none.

R&TC §62(d). Funding a trust does not trigger reassessment, Transferring real property into a revocable trust where the settlor remains the sole present beneficiary is generally excluded from change-in-ownership treatment, so it does not reset the Proposition 13 base year value. Funding a living trust is not a taxable event for property tax purposes, which is a common and expensive worry.

Proposition 19 and trust-held property, Prop 19 substantially narrowed the parent-child and grandparent-grandchild exclusions from reassessment, and property held in trust is not exempt from those changes. Where a trust distributes to children, whether the exclusion applies is a question for the trust's attorney and the county assessor, but a supported fair market value as of the transfer date is generally part of the answer.

How it works

1. Establish the effective date: the settlor's date of death for a basis step-up, or the date of the transaction for a distribution or buyout.
2. Confirm who the report is addressed to and who may rely on it. Trustee, beneficiaries, or both. That is not a formality; it governs who can use it later.
3. Inspect and value the property, documenting any access limitation where a beneficiary occupies it.
4. Report in USPAP-compliant form suitable for the trust accounting and for beneficiary review.
5. Remain available if a beneficiary contests the value.

What you receive

Independent appraisal addressed to the trustee, suitable for trust accounting and beneficiary review. Standard turnaround is 1–3 weeks. Rush appraisals available for urgent deadlines.

Common questions