Inventory of Estate Assets
When administering a deceased person’s estate, there are a number of important documents that must be filed with the court at certain times throughout the process. These documents, which become public records once filed, are meant to keep the court, the beneficiaries of the estate, and others who may have an interest in the proceedings apprised of everything the executor/administrator (the “Personal Representative”) of the estate is doing. This article will discuss one of the documents filed in the early stages of an estate administration: the Inventory.
The Inventory is due within ninety days of the qualification of the Personal Representative. For this reason, it is often referred to as the “Ninety-Day Inventory.” The Inventory asks the Personal Representative to list all of the assets of the estate that belonged to the deceased person on the date of his/her death. The Personal Representative will also need to provide the value of each asset listed. That value will not be value as of the day the Inventory is submitted; it will be the value of each asset as of the deceased person’s date of death. This Inventory establishes the estate’s starting point. Documents filed later on in the process will pick up where the Inventory left off, telling the court about funds that came into or were paid out of the estate over the course of the administration.
Determining the date of death values of assets sounds daunting, but for many common types of assets, it’s actually fairly easy. For example, determining the value of a bank account is as simple as getting a bank statement from the period that includes the date of death, then adding back any money that left the account post-death and subtracting out any amounts paid into the account post-death. Publicly traded stocks are also easy to value. Vehicles are even easy to value thanks to reliable resources like Kelley Blue Book.
The trickier assets to value are things like collectibles, jewelry, art, and closely-held businesses. It may be necessary for the Personal Representative to hire an appraiser to accurately establish the values of these assets. The Personal Representative will be able to pay the appraiser using assets in the estate. But before hiring an appraiser, the Personal Representative might try locating the deceased person’s recent income tax returns to see if they provide reliable valuations for assets.
Not everything a deceased person owns gets listed on the Inventory. Assets such as life insurance policies and retirement accounts are often omitted from the Inventory. That’s because those assets will pass to beneficiaries via beneficiary designation, and so they will avoid becoming property of the estate (unless the estate itself is the designated beneficiary or the estate becomes the beneficiary by default in the absence of a valid designation of some other beneficiary). Other assets, such as clothing and furnishings, are typically left off the Inventory. That’s because these sorts of assets tend to have little or no value. When these sorts of tangible assets do get listed on the inventory, they’re usually listed together as a single line item (ex: “Misc. Tangible Personal Property: $XXX.00”) rather than piece by piece. In some cases, there may be particular pieces of tangible property that have real value, and in those cases, the Personal Representative may want to list those assets separately before lumping the rest of the tangible assets together. It may also make sense to separately list particular pieces that have been specifically devised to a particular person. In those cases, listing the specific item on the Inventory can make it easier to follow that item’s journey from the estate to the proper beneficiary.
Some assets get listed on the inventory even though they’re considered non-probate assets. Assets such as POD/TOD accounts, survivorship accounts, and real estate typically pass to beneficiaries/heirs without becoming part of the probate estate. However, they are listed on the Inventory just in case the Personal Representative needs to use them to pay the estate’s debts. In cases where an estate’s debts exceed the value of the probate assets, the Personal Representative may ask the court for permission to pull certain non-probate assets into the estate so that the debts may be paid. Even though these assets are not part of the estate to begin with (and may never become part of the estate), their date of death values must be reported just as accurately as the values given for all other assets on the Inventory.
Every Inventory is different. Some are simple, and some require a great deal of time and effort – it all depends on the assets involved. If you’re a Personal Representative with questions about filing the estate’s Inventory, The Law Office of Ryan A. Layton, PLLC can help. Get in touch to learn more about how we might work together to keep your estate’s administration on track.
The information contained in this blog post is intended only as general legal information and should not be construed as formal legal advice on any matter, nor should its presentation be construed as intent on the part of The Law Office of Ryan A. Layton, PLLC to form an attorney-client relationship with any user of this website. For more information, please see this disclaimer.