Estate tax valuation is a crucial process used to assess the fair market value of a deceased individual’s assets at the time of death. In the United States, this valuation plays a key role in determining whether the estate exceeds the federal estate tax exemption threshold and, if so, how much tax is owed.

The valuation typically includes all forms of property—real estate, personal belongings, financial accounts, business interests, and investments. Accurate reporting is essential, as undervaluation or overvaluation can result in penalties, audits, or disputes with tax authorities. Appraisals must reflect the property's value as of the date of death or an alternative valuation date, usually six months later.

Valuation professionals apply various methods depending on asset types, including market comparables for real estate, income-based approaches for businesses, and standard asset appraisals for personal property. Documentation supporting each value is essential for legal and tax compliance.

Estate tax valuation ensures that beneficiaries, executors, and tax authorities have a clear understanding of the estate's worth. Proper valuation not only satisfies legal requirements but also supports efficient estate administration, equitable asset distribution, and accurate tax filing, making it a vital component of posthumous financial planning.