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The Four D's in Personal Property Appraisal: Death, Disaster, Debt, and Divorce

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Benjamin Franklin famously said that "in this world nothing can be said to be certain, except death and taxes." As hard as we may try, we may not be able to adequately prepare for all of the pitfalls of life.

Many people turn to insurance as one way to safeguard the unknown future. However, personal property appraisers also play a crucial role in navigating what is often referred to as the "four D's": death, disaster, debt, and divorce.

When a loved one dies, a personal property appraiser can help determine the value for an equitable distribution of an estate as well as any potential federal, state, or local tax liabilities. An appraiser provides an overall opinion of the value of an estate or performs an appraisal on specific items at the executor's request. Additionally, because auction house expertise and experience can vary widely, an appraiser can help determine the best venue in which to sell items you may not wish to keep.

Death and taxes may be certain and disaster may be less so, yet most people seek to protect themselves by purchasing insurance coverage for their homes, automobiles, and valuable personal property. Insurance companies often recommend homeowners hire appraisers to value property to determine the overall retail replacement value of their items. This can also help dictate how much a client should pay for a policy and how much a policy should cover. Conversely, an appraiser may be hired by a client to verify if the insurance company's policy and/or coverage is accurate and adequate.

If there was no prior inventory or documentation, appraisers may be asked to perform an appraisal utilizing a "hypothetical condition" after a disaster strikes. For example, if a house experiences a flood, an appraiser may be asked to perform an appraisal of various items as if they were in "normal condition" (i.e., prior to the flood) to determine what was lost.

It is often more difficult to perform an appraisal of items that have been damaged in a fire because the items may literally no longer exist or be in extremely poor condition and hence unrecognizable. An experienced appraiser will be required to determine the value of objects that did not survive the disaster.

Additionally, a disaster may not always be "natural." For example, items may be intentionally damaged or stolen. Consequently, it is highly recommended that digital images or video be taken of high-value items, and documentation be made that includes how much was paid for a particular item, when an item was purchased, as well as the current replacement value of the object. This is usually done at the time of securing insurance coverage.

Individuals may find themselves in financial straits because of a disaster or may incur debt for various other reasons, including seeking a bank loan for a new investment or endeavor. Whatever the reason, a personal property appraiser can assist with valuing property for orderly liquidation or for use as collateral to secure a loan.

Divorce--another often unexpected event--is something an appraiser can also help with. An appraiser can provide an opinion of value (e.g., fair market value, or the value in which a buyer would likely pay) to assist with the equitable division of property.

A qualified professional's skills are key assets when seeking a fair settlement in these uncertain circumstances. An appraiser's professional opinions and valuation reports are important tools in the resolution process.

To find a list of qualified personal property appraisers, you can visit The Appraisal Foundation's website at www.appraisalfoundation.org and visit the "Find an Appraiser" page.