Trusts and Estates Blog

How Securities Are Valued At Death

U.S. tax forms with glasses, pen, and calculatorEstate plans containing securities have specific rules that are best negotiated by a certified estate planning specialist. The federal government has specific rules for the valuation of securities and financial instruments included inside or outside of estate plans. Since there are a vast number of financial instruments available in the market, this article will focus on the more common instruments included in estate plans which include stocks, bonds, mutual funds, Treasury securities, cash and cash-equivalent accounts and retirement accounts.

The federal rules for valuation are:
Stocks, bonds and mutual funds – for stocks, it is the average of the trading range on the date of death, or in the event of a weekend or holiday, the average of the preceding and following trading days. Bonds are priced by averaging the closing price on the date of death and the preceding trading day, and must include any accrued interest. U.S. Savings Bonds are valued at their redemption value at the end of the month, according to the redemption value published by the U.S. government. U.S. Treasury notes and bonds are valued the same as commercial bonds. U.S. Treasury bills are valued at their redemption price, since interest in included in their price.
Cash, bank, and credit union accounts – All cash and cash-equivalent accounts must report the exact value on the date of death. Any uncleared checks must be listed separately so their value can be deducted from the account.
Retirement accounts – including IRA’s, pension, 401(k) and similar retirement accounts must account for the value on the date of death. Any stock, bonds or mutual funds will be valued using the rules mentioned above.

Proper recordkeeping of all of the investments in your estate plan will make the valuation process much easier for your estate planning attorney and loved ones. Keeping meticulous records with your estate planning documents will enable them to efficiently value your assets and avoid any unnecessary investigation that will be subtracted from your estate value.

Antelope Valley estate planning law firm Thompson Von Tungeln (TVT) offers sophisticated estate planning and administration for the affluent, discriminating client. As Board Certified Specialists in Estate Planning, Trusts and Probate as certified by the State Bar of California Board of Legal Specialization, partners Mark E. Thompson and Kevin L. Von Tungeln are expertly equipped to serve these clients with the creative, effective and custom solutions they demand. For more information, contact TVT at 661-945-5868 or visit their websites at www.EstatePlanningSpecialists.com and www.Medi-CalHelp.com.

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