At first glance, calculating the value of a decedent’s elective estate may seem somewhat straightforward. However, experienced probate practitioners know that this calculation is far from easy, particularly when the decedent held interests in jointly owned businesses at the time of death.

A sticking point is often the proper valuation of the decedent’s interests in jointly owned corporations. For instance, the personal representative may assign a lower value to these interests than the surviving spouse deems appropriate. In such an instance, the surviving spouse must file an objection to preserve his or her right to contest the valuation. Business valuation experts routinely employ large discounts when determining the fair market value of the decedent’s factional interests in businesses. More particularly, minority/lack of control and lack of marketability discounts are frequently utilized to lower the value of these interests. The percentages utilized are very subjective and open to expert debate.

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