Estate Appraisals vs. Market Value: What Lawyers Should Know

When handling estate settlements, one of the most important questions lawyers face is: What is the true value of the property? Understanding the difference between an estate appraisal and market value can make all the difference in ensuring fairness, compliance, and a smooth administration process.

At Walson Consulting Inc., we frequently work with estate lawyers, executors, and trustees who need accurate, defensible property valuations. This article breaks down the key differences between estate appraisals and market value — and what every lawyer should know before advising clients.

What Is an Estate Appraisal?

An estate appraisal is a formal valuation conducted by a Designated Appraiser with the Appraisal Institute of Canada (AIC) to determine a property’s value for estate-related purposes such as:

• Estate settlement

• Probate

• Capital gains reporting

• Asset division among beneficiaries

  
  

The appraisal establishes the property’s fair market value as of a specific retrospective date, usually the date of death. This “as of” date is critical, as it ensures the valuation aligns with CRA and probate requirements rather than today’s market conditions.

An estate appraisal must follow CUSPAP (Canadian Uniform Standards of Professional Appraisal Practice), ensuring it is reliable, compliant, and defensible in legal or tax settings.

Understanding Market Value

Market value represents the price a property would sell for in the current open market, assuming a willing buyer and seller, reasonable exposure time, and no pressure on either party.

In simple terms, market value is today’s price — what a buyer might pay right now under normal conditions. It fluctuates with changes in demand, interest rates, and overall economic trends.

Key Differences: Estate Appraisals vs. Market Value

Aspect	Estate Appraisal	Market Value
Purpose	Used for legal, tax, or probate purposes	Used for sale, purchase, or refinancing
Date of Valuation	Often retrospective (e.g., date of death)	Current date
Standards Used	Must comply with CUSPAP and CRA requirements	May vary depending on use
Report Type	Formal written report by an AIC-designated appraiser	Informal estimate or market analysis
Legal Use	Accepted by CRA, courts, and estate administrators	Generally not accepted for legal filings

Why the Difference Matters for Lawyers

For estate lawyers, using the wrong valuation type can lead to significant legal and financial consequences.

• Tax Implications: CRA requires a value as of the date of death, not today’s market value. Using an incorrect date can result in reassessment or penalties.

• Beneficiary Fairness: An accurate estate appraisal ensures that asset distribution is fair and transparent, avoiding disputes.

• Court and Probate Acceptance: Courts and estate administrators expect a formal report from a qualified appraiser, not a realtor’s market opinion.

  
  

Best Practices for Lawyers Handling Estate Properties

1. Request a Retrospective Appraisal: Always confirm the date of death or relevant valuation date before ordering an appraisal.

   
   

2. Choose a Qualified Appraiser: Ensure the appraiser is a Designated Member of the Appraisal Institute of Canada (AIC) and experienced in estate work.

   
   

3. Document Everything: Keep a copy of the appraisal report in the estate file for CRA or court verification.

   
   

4. Advise Executors Early: Recommend obtaining the appraisal as soon as possible to prevent delays in probate or tax filing.

   
   

Partnering with a Trusted Appraisal Firm

At Walson Consulting Inc., we specialize in estate and probate appraisals across the Greater Toronto Area. Our reports are:

• Certified and CUSPAP-compliant

• Prepared by AIC-designated appraisers

• Accepted by CRA, lawyers, accountants, and estate trustees

  
  

We understand the legal and emotional complexities involved in estate matters and ensure our valuations are both accurate and defensible.

Final Thoughts

For estate lawyers, understanding the difference between an estate appraisal and market value isn’t just technical — it’s essential for protecting clients and ensuring legal compliance.

If you or your clients need a professional estate appraisal in Ontario, contact Walson Consulting Inc. for a free quote today.