People who ask this question are normally interested in knowing how family heirlooms will be divided among multiple heirs. To better illustrate the distribution of these items of personal property, the division of the entire intestate estate is addressed below.
Types of Property
There are generally three forms of property: Real estate, intangible personal property, and tangible personal property.
Real estate is comprised of the ground, as well as all property that is permanently attached to the ground, such as a house. Intangible personal property is basically cash and items that represent cash, such as stock certificates. Finally, all property that does not fall into either of the previous two categories is generally classified as tangible personal property.
In addition to common objects, such as clothing, household appliances, and furniture, tangible personal property will also include larger or more expensive items, such as all electronic equipment, jewelry, artwork, and vehicles.
Fair Market Value
‘Fair market value’ is the price that would be exchanged between willing and fully informed parties who are interested in transferring the ownership of specifically identified property from one party to the other.
Any item’s fair market value may be determined by having it appraised or, if the item is sold by the deceased’s estate, by the actual contract sale price obtained for the item.
Although the type of property can affect an item’s individual value, the type of property does not affect its division being determined upon the basis of its fair market value. A collection of rare silver coins is subject to the same rules of distribution as a collection of common beer bottles. Intestate Estate Value Every intestate estate is represented by the dollar amount that is equal to the combined total of the fair market value of all the deceased’s intestate property.
For example, suppose an intestate estate consists of the following property:
Item Value Certificate of deposit $20,000 Checking account $1,500 House $100,000 Vacant land $20,000 Piano $2,000 Stamp collection $500 Vehicle $6,000 Total Estate Value $150,000
Some of this property is cash (checking account balance), items that represent cash (CD), personal property (piano, stamps, vehicle), and real estate (house and vacant land). However, this mixture of property types does not have any affect upon the intestate estate value, which is simply the sum of the value of every type of property.
Although each heir is entitled to receive a specific dollar amount from the intestate estate, the actual form of each beneficiary’s payment will vary from estate to estate.