Alaska Estate & Trust Appraisals: Probate Basics, Date of Death Value, and Choosing the Right Appraiser

Most people who reach out about an estate or trust appraisal already know they need one. What they usually don’t know is that “an appraisal” isn’t one single product — the date the value applies to, the standard the value has to meet, and who’s actually qualified to produce it all change depending on what the appraisal is for. Getting any one of those wrong can hold up a probate, trigger an IRS challenge years later, or leave one heir shortchanged for the rest of their life. Here’s what actually drives the process in Alaska, and what to watch for.

The basics: how Alaska probate works

Alaska adopted the Uniform Probate Code, codified under Title 13 of the Alaska Statutes, which makes the process more standardized than in many states. Probate cases are handled through the Superior Court in the judicial district where the decedent lived.

A few terms worth defining up front:

Personal Representative: the individual — often called an executor in other states — appointed by the court to administer the estate: gathering assets, paying debts, and distributing what remains to heirs or beneficiaries.

Small Estate Affidavit: available when an estate’s personal property (excluding vehicles) is valued at $50,000 or less, vehicles at $100,000 or less, and there’s no unresolved real property. This is the simplest path and often doesn’t require a full probate proceeding.

Informal Probate: the most common track for uncontested estates, handled with minimal court involvement through the court registrar.

Formal Probate: court-supervised proceedings used for contested or complex estates, including disputes over a will’s validity or disagreements among heirs.

Once appointed, a personal representative has a specific legal duty that puts the appraisal question front and center: under AS 13.16.440, they must prepare an inventory of estate assets — including a valuation — within three months of appointment. Creditors then have a four-month window to file claims after notice is published, under AS 13.16.450. Alaska has no state estate tax or inheritance tax, which simplifies things somewhat compared to states that layer a state-level filing on top of the federal one.

What actually drives the appraisal: the date of value

This is the piece that trips people up most often, and it’s rarely explained clearly. An appraisal isn’t just a number — it’s a number tied to a specific date, and which date applies depends entirely on what the appraisal is being used for.

Date of Value (or Effective Date): the specific date to which an appraiser’s opinion of value applies. This is not necessarily the date the appraiser inspects the property or the date the report is written — it’s the date the value itself is meant to represent.

In estate and trust work, two different dates come up constantly, and they’re not interchangeable:

Current Market Value Appraisal: an opinion of value as of today, or as close to today as the assignment allows. This is what’s needed when a trust is being liquidated, when real property needs to be sold to settle the estate, or when one beneficiary wants to buy out the others’ interest in an inherited property. The number has to reflect what the property is actually worth right now, in the current market — not what it was worth when the original owner passed away, which could have been years earlier.

Date of Death Appraisal (a Retrospective Appraisal): an opinion of value as of a specific date in the past — the date the decedent passed away — rather than the date of the appraisal itself. This is what the IRS requires to establish the estate’s value for federal tax purposes and to set the heirs’ stepped-up basis (more on that below). A retrospective appraisal is a distinct skill from a current-value appraisal: the appraiser has to reconstruct market conditions as they existed on that earlier date, using sales and data available around that time, not today’s market.

It’s genuinely common for the same estate to need both. A personal representative might need a date-of-death retrospective appraisal to file with the IRS and establish basis, and separately need a current market value appraisal months or years later when the property is actually ready to be sold or divided among heirs. Ordering a generic “appraisal” without specifying which date applies is one of the most common — and most consequential — mistakes families make, because an appraiser who doesn’t ask the right questions up front may deliver a report that’s the wrong product entirely for what it’s needed for.

Why this number follows a family for a generation: stepped-up basis

Stepped-Up Basis: when someone inherits property, their cost basis for future tax purposes generally resets to the property’s fair market value as of the date of death (or the alternate valuation date, if elected) — rather than what the original owner originally paid for it. When the heir eventually sells the property, capital gains tax is calculated against that stepped-up number, not the original purchase price decades earlier.

This is where a bad date-of-death appraisal does damage that doesn’t show up right away. An appraisal that understates the property’s value creates a lower basis than the heir is legally entitled to — meaning a larger capital gains bill when they eventually sell, potentially years or decades later. An appraisal that overstates value creates exposure the other direction: if the IRS audits the estate tax return, an unsupportable number can trigger penalties and force a costly correction. Either way, the number set at the date of death isn’t a one-time figure — it’s the number an heir carries for as long as they own the asset. Getting it right, or wrong, is effectively a once-in-a-generation decision.

The federal side: deadlines that actually matter

Form 706 is the United States Estate (and Generation-Skipping Transfer) Tax Return, required for estates whose gross value exceeds the federal exemption — $15 million per individual for 2026. It’s due nine months after the date of death, with a six-month extension available.

Alternate Valuation Date: under IRC Section 2032, an executor can elect to value the entire estate six months after the date of death instead of on the date of death itself — but only if doing so lowers both the gross estate value and the total estate tax owed. It’s an irrevocable, all-or-nothing election that applies to every asset in the estate, not selectively.

Portability Election (DSUE): allows a surviving spouse to use a deceased spouse’s unused federal estate tax exemption. The standard deadline to elect portability is nine months after death (or the extended filing deadline). For estates that weren’t required to file a return in the first place and missed that window, the IRS provides a simplified method to file late — and this is worth knowing precisely, because the rule has changed: it was originally a two-year window under Rev. Proc. 2017-34, but the IRS extended it to a full five years from the date of death under Rev. Proc. 2022-32, which remains current. A lot of people — including some professionals — are still working off the old two-year figure.

Trusts need appraisals too — not just probate estates

Many Alaska families hold real property in a revocable living trust specifically to avoid probate. That’s often effective for its intended purpose, but it doesn’t eliminate the need for a valuation. When a grantor or co-trustee passes away, removing them from the trust and properly administering it — dividing assets between a survivor’s trust and a bypass or credit shelter trust, establishing basis for the deceased’s share, or preparing for a future sale or buyout — commonly requires its own real property appraisal, on its own appropriate date of value, exactly as described above. Families are often surprised to learn that avoiding probate didn’t also mean avoiding the appraisal question.

The trap: assuming “it’s just a house” means “it’s simple”

When the primary estate or trust asset is a personal residence, families instinctively reach for a residential appraiser, or worse, a real estate agent. That instinct is understandable and usually wrong — not because residential value is complicated, but because the assignment itself is different from an ordinary home sale, and the standard of scrutiny is higher.

A few distinctions worth knowing:

Broker Price Opinion (BPO): an estimate of value prepared by a real estate agent or broker, typically for a lender or as an informal pricing tool. A BPO is not an appraisal.

Comparative Market Analysis (CMA): a similar estimate prepared by a real estate agent to help price a home for listing. A CMA is also not an appraisal.

Neither product is prepared under the Uniform Standards of Professional Appraisal Practice (USPAP), neither is prepared by someone credentialed and licensed as an appraiser, and neither is built to withstand the scrutiny of a probate court, an IRS examination, or a dispute among heirs. They’re built for speed, not defensibility — which is fine for their intended purpose, and entirely wrong for this one.

Even among licensed, credentialed appraisers, there’s a meaningful gap. Many residential appraisers build their practice almost entirely around mortgage lending work — fast turnarounds, standardized forms, a single intended use. That’s a legitimate specialty, but it’s a different skill set from retrospective valuation, complex ownership structures, or a report built to hold up under IRS or probate court review. Licensing alone doesn’t guarantee that experience. A professional designation — additional coursework, testing, and peer review beyond the state minimum required to hold a license — is one of the clearest signals that an appraiser has gone beyond the baseline required for a lending assignment.

A cautionary example (not an estate case, but the same problem)

This didn’t happen in an estate settlement, but it illustrates exactly why the difference matters. It happened recently in our own Alaskan market.

A homeowner seeking financing received three separate valuation opinions on the same property within a matter of months: a BPO from a real estate agent and two full appraisals from two different residential appraisers. The BPO got the foundation type wrong, and a loan underwriter working remotely — reviewing satellite imagery rather than an actual site visit — became convinced that the structure encroached across the property line. What actually happened is a known quirk of satellite imagery in Alaska: the extreme viewing angle at this latitude creates a visible offset between where a structure appears to sit and where it actually sits. The underwriter didn’t know that. The BPO didn’t catch it or correct it. The loan was declined over an error that didn’t exist. No amount of common sense explanations from the homeowner could convince the bank that no encroachment existed. Even a survey was declined.

The two full appraisals fared little better. They came in nearly $225,000 apart — one around $325,000, the other as high as $550,000, on a property more realistically worth somewhere in the $250,000 to $325,000 range. When the lower appraisal was questioned, the appraiser voluntarily raised the value by $100,000 over the phone, with no new supporting data — a move that should raise serious concern about how the original number was supported in the first place. The replacement, higher appraisal leaned on comparable sales that were one-bedroom, one-bath homes with garages, grossly adjusted to fit a four-bedroom, two-bath home with no garage at all — comparables that shouldn’t have been used to begin with.

That’s the spread produced on a live financing transaction, with a lender actively reviewing the work. An estate or trust doesn’t have that same real-time check. There’s no underwriter double-checking the number before it’s used to divide an inheritance or file with the IRS — which means an error like this one can move straight through to a family’s actual outcome, unquestioned, until it’s too late to fix cheaply.

Why the stakes are higher in estate and trust work, not lower

A residential sale has a built-in check: a buyer, an appraiser, sometimes a lender, all independently looking at the same number before money changes hands. An estate valuation often has none of that. Heirs frequently lack the expertise to catch an appraisal error themselves — but they’ll feel the consequences of one, and a number that looks wrong to even one heir is exactly the kind of thing that turns an uncontested probate into a contested one. On the tax side, an error doesn’t even surface until years later, when an heir sells the inherited property and finds their basis was set incorrectly — at which point unwinding it is far more expensive than getting it right the first time would have been.

What actually separates a designated appraiser from the rest

A real estate appraisal license is a state minimum, not a ceiling. Beyond it, national appraisal organizations offer professional designations that require additional coursework, testing, and peer-reviewed work product — credentials an appraiser pursues voluntarily, well beyond what’s needed to sign off on a routine lending assignment.

At RVS, Lydia holds five designations from four different national appraisal organizations: MAI and AI-GRS from the Appraisal Institute, ASA from the American Society of Appraisers, GAA from the National Association of REALTORS®, and MNAA from the National Association of Appraisers. She’s the only appraiser in Alaska holding both the MAI and ASA designations simultaneously — two of the most rigorous credentials in the industry, from two separate national organizations, each with its own independent testing and peer review process.

That matters most exactly where this article started: when the assignment isn’t a routine lending appraisal, but a retrospective date-of-death valuation, a complex trust administration, or a report that needs to hold up to IRS scrutiny or a contested probate. A lot of working appraisers, especially those built around high-volume lending work, never pursue a designation at all — it isn’t required to hold a license and do that work. That gap usually doesn’t show up on a straightforward loan file. It shows up here, when it matters most.

At minimum, when an appraisal genuinely matters — an estate, a trust, a dispute among heirs — choose a designated appraiser. This isn’t the assignment to hand to whoever’s available fastest or cheapest. The number set today is the number a family lives with for a generation.

Sources: Alaska Statutes Title 13 (AS 13.16.440, AS 13.16.450); IRS Instructions for Form 706 (2025); IRC Section 2032; Rev. Proc. 2022-32; Rev. Proc. 2017-34 (superseded).