- 12 - replacement of the vintage structure and to pay decedent’s living expenses during the interim. The insurance company’s agreement to pay, however, was contingent upon decedent’s pursuit and completion of restoration and unique to decedent. Ultimately, that agreement resulted in the insurance company’s paying almost $2.8 million in connection with the restoration of a house that was insured for coverage of $283,000 on the dwelling and only 50 percent of $283,000, if the insured chose to rebuild. Of the $2.8 million paid, less than $200,000 was paid for living expenses and removal of the debris caused by the fire. The remainder of the $2.8 million was reimbursement for restoring the residence, landscaping, and building contents. We cannot rely on these expenditures for purposes of valuation. Considering the fact that about 3 years after decedent’s death, the residence was sold at arm’s length for slightly over $1 million, the expenditures have no rational relationship to the value. In a similar vein, at the time of decedent’s death the estimated “completed value” of the residence was an amount approaching $1 million, whereas at the time of death, a willing buyer would not have offered the completed price. Conventional approaches to valuation, inclusion of assets, and reduction of the estate for decedent’s obligations do not accurately address these peculiar circumstances. The estate’sPage: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
Last modified: May 25, 2011