Valuation Correspondence is an integral part of the systematized creation of the inventory of assets. Correspondence to third parties to obtain date of death asset values, descriptions, titling, and other information as pertinent to specific types of assets are accompanied by fill-in-the-blank forms. Utilizing standard forms simplifies staff training in your office, since information from standard forms can be carried from the forms and entered into the asset information section of TrusTerminator by an assistant. It is important that information received is promptly entered into software so status of the file as shown by Asset Review is current.

In addition, letters to the decedent's employer may be used to obtain information on benefits payable due to the decedent's employment and to appraisers to request appraisal of assets. This section of TrusTerminator also generates letters to third parties notifying them of the trust's taxpayer ID number.

Note that basic information on decedent's assets, including contact information, must be entered in the Asset Information section prior to accessing the documents listed in this section.

Institutions Requesting D.O.D. Information
When letters to institutions requesting date of death information are selected, a choice is given as to whether correspondence should be generated for all institutions or only selected institutions. If "all financial institutions/insurance agents" is selected, correspondence will be created for all institutions designated as holding assets in the Asset Information section of TrusTerminator. Accompanying this letter are fill-in-the-blank forms requesting pertinent information for each type of asset.

The software allows for all forms to be enclosed, or only forms for specific types of assets as selected. In many cases it is difficult to determine exactly what types of assets are held by an institution (e.g., insurance companies offer stocks and bonds, banks offer securities and insurance) so all forms can be enclosed to cover any possible asset. Letters instruct the institutions to mark the form N/A if it does not apply to decedent's assets held in their institution. If specific types of assets held by a particular third party are certain, then only the applicable forms need to be enclosed. If the "all institutions" option noted in the above paragraph is selected the option of generating all forms or only the specific forms selected will be the same for all institutions.

Forms regarding securities or bonds may be generated with a request to include date of death values or not include a request for date of death values. Use of a valuation service expedites valuation of securities and is generally more accurate. Frequently, those completing forms do not comply with IRS requirements for valuation, particularly when death occurred on a non-trading day. Not including date of death value on information request forms often expedites return of the forms, since it is easier for the institution to complete when valuation calculations are not required. Even if a valuation service is used, however, correspondence is still necessary to determine or confirm other information.

To expedite the return of forms enclosed with letters to institutions, a self-addressed, stamped envelope should be included with correspondence. An authorization for release of confidential information (prepared in the Pre-Appointment section of TrusTerminator) should also be enclosed.

It is not unusual for follow-up to be required, either because institutions don't respond, or because information provided is incomplete. If the need exists to mail another letter and additional forms at a later date, either to follow up or because an additional asset has been discovered, utilize Valuation Correspondence again, deselect previously selected letters, and select and generate only the letter(s) and form(s) desired currently.

Decedent's Employer Requesting D.O.D. Information
The letter to decedent's employer notifies the employer of decedent's date of death, and specifies whether the decedent was a current or a retired employee (depending on information entered under Enter Merge Information). The letter then requests that the employer complete the enclosed form with information on employee benefits, or, if none exist, that the employer write NONE across the form, and return the form to your office. The form to be enclosed is generated with the letter. The form, an authorization to release confidential information (prepared in the Pre-Appointment section), and a self-addressed, stamped envelope should be enclosed with this letter.

Appraiser Requesting Appraisal
The letter to appraiser requests that appraisals be completed on all assets listed on the attached Exhibit A to reflect date of death value, notifies the appraiser of decedent's death, and directs that appraisals must be written in a manner to satisfy the IRS in the event of a future audit. When the letter to appraiser is selected, a choice will be presented as to whether the letter should be directed to all appraisers or selected appraisers. If "selected appraisers" is chosen, a list of appraisers noted in any asset record in the Asset Information section will be offered, so you may pick the one to whom you'd like to generate the letter.

The next prompt asks the purpose of the appraisal and offers "new income tax basis" or "values for federal estate tax purposes". Although in many cases both purposes apply, if the value of the estate is such that estate tax issues do not exist and you want to achieve maximum date-of-death value to ensure the greatest step-up in basis possible, select the "new income tax basis" option. The following language is incorporated into the letter: "The appraised value(s) will be used to establish new income tax basis in the asset(s), so we want to be certain that full value is shown on all assets. In most cases, if the asset is depreciable, future depreciation will be based on the date of death value of the decedent's share established by the appraisal, or if the asset is sold, capital gains tax will only be due on the portion of the sale price exceeding the appraised value."

If estate tax issues exist and you want to ensure that the appraisal does not include any post-death increase in value, select "values for federal estate tax purposes". The letter will include the following language: "The appraised value(s) will be used to establish values for federal estate tax purposes. Since federal estate tax could be due at some point, we want to be certain that appraised value(s) do not include any increase in value which may have occurred since the date of [decedent's] death. Valuation should be based on what the value was as of [date of death]." If values will be used for state estate tax purposes (but the value of the estate is such that federal estate tax is not an issue) and you want to ensure that the appraisal does not include any post-death increase in value, this phrase may be selected and edited in your word processor as appropriate.

Exhibit A attachments will be completed with descriptions of all assets which indicated the appraiser to whom the letter is being sent as the appraiser of choice in the Asset Information section.

An Authorization to Retain Appraiser form (created in the Pre-Appointment section) should be enclosed with the correspondence.

The correspondence ends with instructions for the appraiser to contact trustee(s) directly to make arrangements to conduct the appraisal and to invoice the trustee(s) directly, and provides the address and phone number of the trustee named to receive correspondence from third parties.

Institutions Notifying of Trust Tax ID No.
The letter to institutions notifying them of the trust taxpayer ID number directs the institution that income earned from trust assets after the date of death should be reported under the new taxpayer number, and thus prevent this income from being included in 1099's issued under the decedent's social security number. This letter does not provide instructions regarding taxpayer ID numbers for testamentary trusts. Letters needed for that purpose are created under the Testamentary Trust section of TrusTerminator.

A choice is given as to whether correspondence should be generated for all institutions or only selected institutions. If "all financial institutions/insurance agents" is selected, correspondence will be created for all institutions designated as holding trust assets in the Asset Information section.

Trustee Enclosing Copies of Documents
The letter to trustee enclosing copies of documents is a cover letter for use in mailing copies of all documents and correspondence generated since the last mailing to keep the trustee(s) informed of progress. An option is provided to include a paragraph describing which information is still outstanding, so if the inventory is being delayed because of difficulty in obtaining specific items of information, the trustee(s) can be notified. Consistent contact to keep trustee(s) informed greatly improves client relationships, keeps the trustee(s) abreast of developments, and helps trustee(s) to appreciate the work performed for them.