What value should I use on the inventory for real estate when the tax assessment changed after the person died? – North Carolina

Short Answer

In North Carolina, the estate inventory should generally report the real estate’s fair market value as of the date of death, not a later tax-assessed value that changed after death. A county tax assessment can be used as supporting evidence of value, but it is not automatically the correct number if it reflects a different effective date. When the assessment changes after death, the safest approach is to document how the date-of-death value was determined and be consistent across the inventory and later accountings.

Understanding the Problem

In a North Carolina estate administration, a personal representative must list estate assets on an inventory, including any real estate owned by the decedent. The decision point is which number to put on the inventory for a parcel of real estate when the county tax assessment changes after the date of death. The question focuses on whether the inventory should use the newer assessed value or a value tied to the date the decedent died.

Apply the Law

For probate administration in North Carolina, the inventory is meant to report a good-faith value for estate assets. For real estate, the practical standard is to use a date-of-death fair market value and keep records showing how that value was reached. A county tax assessment may be a helpful data point, but if the assessment changed after death (for example, due to a countywide revaluation or a correction), that later number may not reflect what the property was worth on the date of death.

Key Requirements

Date-of-death focus: The inventory value should track what the property was worth when the decedent died, not what it was assessed at later.
Fair market value (FMV): FMV generally means the price a willing buyer would pay a willing seller in an arm’s-length sale, with neither side forced to act and both having reasonable knowledge of the property.
Supportable, good-faith valuation: The personal representative should be able to explain and support the number used (for example, with tax records, comparable sales, or an appraisal) and use a consistent approach in later filings.

What the Statutes Say

N.C. Gen. Stat. § 30-3 (Valuation of property) – For elective share valuation rules, North Carolina uses fair market value as of the date of death as the basic principle, which reflects the broader date-of-death valuation concept used in estate administration.

Analysis

Apply the Rule to the Facts: Here, the co-administrators/personal representatives are preparing an estate inventory in North Carolina and have real estate where the county tax assessment changed after the decedent died. Because the inventory is intended to reflect a good-faith date-of-death value, the later assessment should not automatically replace the date-of-death valuation. The better practice is to select a supportable date-of-death fair market value (which may or may not match the older or newer assessed value) and keep documentation showing how that number was determined.

Process & Timing

Who files: The personal representative(s) (including co-administrators). Where: The Estates division of the Clerk of Superior Court in the county where the estate is being administered. What: The estate inventory (and any required supporting documentation requested by the Clerk). When: The inventory is typically due early in the administration after qualification; the Clerk’s office often sets or enforces the deadline, and local practice can vary by county.
How to pick the number when the assessment changed: Identify the date of death, then gather value indicators tied as closely as possible to that date (recent comparable sales, a broker price opinion, or an appraisal). If using tax records, confirm what date the assessment is intended to represent and whether a revaluation occurred after death.
How to keep the file clean: Keep a short valuation memo in the estate file noting the date of death, the sources reviewed, and why the chosen number is a reasonable date-of-death FMV. This helps if questions come up later during accountings or distributions. If a value is later discovered to be materially off, an amended inventory may be appropriate under local Clerk practice.

Exceptions & Pitfalls

Assessed value is not the same as date-of-death FMV: A new assessment after death may reflect a later effective date or a countywide revaluation, not what the property would have sold for on the date of death.
Mixing dates across assets: Using “current” values for some assets and date-of-death values for others can create confusion in later accountings and can trigger questions from beneficiaries or the Clerk.
Not keeping support: Even when a tax record is used, the estate file should still include enough backup to show the number was chosen in good faith (especially if the assessment changed shortly after death).
Tax issues outside probate: Real estate valuation can affect income tax basis and reporting. A probate inventory is not a tax return; for tax consequences, a tax attorney or CPA should be consulted.

Conclusion

In North Carolina, the inventory value for estate real estate should generally reflect the property’s fair market value as of the date of death, even if the county tax assessment changes afterward. A later assessment can be a useful reference, but it may not match the correct valuation date. The next step is to select a supportable date-of-death value and file the inventory with the Clerk of Superior Court by the deadline set or enforced in the estate file.

Talk to a Probate Attorney

If an estate inventory is being prepared and a real estate tax assessment changed after the death, our firm has experienced attorneys who can help explain how to document a date-of-death value and file the inventory correctly with the Clerk. Call us today at 919-341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.