There is an election that the executor of your estate can make regarding the time at which property included in your gross estate will be valued: the date of death (the usual valuation date), or a date that is six months after the date of death (the alternate valuation date). For example, if a catastrophe hits your business and it's worth much less six months after your death than it was on the date of death, it may be worthwhile to use the later date.

Once made, the selection of the valuation date generally applies to all property in your estate for purposes of computing the estate tax liability. If your executor elects the alternate valuation date, an exception exists for property that is sold or otherwise disposed of within the six-month period between the date of death and the alternate valuation date: such property is valued as of the date it was sold or disposed of.

The alternate valuation date rule is designed to be a relief provision in cases where the value of a decedent's estate declines in the six-month period following his or her death. This could mean a savings for your estate if this situation applies.

One thing to consider, however, if your executor uses the alternate valuation date for assets — this lower valuation amount also sets the basis that your heirs will receive in assets have from your estate. If they have a lower basis, they can expect to face a higher capital gains tax liability when they later sell these properties.