This blog has on previous occasions discussed how Minnesota residents can go about placing a dollar value on items that can prove difficult to price. Estate valuation can be a touchy subject during the probate process precisely because some of the most valuable items in an estate do not have an obvious price upon which all parties would agree. This scenario leaves plenty of room for argument and litigation.
For example, works of art can be difficult to price since, relative to things like cars, they do not transfer hands as often and are also unique. However, it is important for people to remember that no work of art is unique in all respects. Art bears certain similarities to other art that, in most cases, has sold some time in the recent past. Moreover, like other items, different works of art have different target markets that are willing to accept different price ranges.
What all of this means is that a fair way to put a value on a work of art, and thus set a reasonable sale price, is by using the comparison method. The comparison method is similar to what real estate experts use to put a value on a home. Basically, a person needs to examine the most recent sales of art that has similar characteristics and is offered to a similar market, and set a price accordingly. For example, a Saint Paul resident would want to compare the abstract painting hanging on his or her wall to other abstract paintings that have sold recently in Saint Paul.
As a word of caution, one thing personal representatives and heirs must try to avoid is taking a subjective view of the art by valuing based off of emotions or pleasant memories. Doing this may cause someone to underestimate or overestimate the art’s appreciation over time, which could lead to a conflict.