If you’re named as executor of an estate, you will be tasked with identifying all the assets of the decedent and creating an estate inventory if one doesn’t already exist. Some of the options you may have for identifying assets include:
- The deceased’s will if they have one
- Their financial statements or legal documents
- Their recent tax returns
- Abandoned asset database searching; and
- A public property records search.
Yahoo Finance’s recent article entitled “What Is Included in an Estate Inventory?” says you may also be able to find assets for an estate inventory by talking to the decedent’s financial advisor, estate planning attorney, or relatives. An executor must be as thorough as possible, so the final inventory list submitted to the probate court is accurate and complete.
If you’re planning your estate, you can make this job easier for your executor by creating an estate inventory yourself. Keep a copy of this inventory with a copy of your will, if you have one in place. (If you don’t have a will, draft one sooner rather than later.) If you pass without a will in place, your assets would be distributed according to state law.
If you’re making an inventory of your estate, include the types of assets for which an executor might search. Depending on your financial situation, your personal estate inventory might include:
- A 401(k) plan or similar employer-sponsored retirement plan
- Traditional or Roth IRAs
- Business retirement accounts, such as a solo 401(k) or SEP IRA if you’re self-employed
- Taxable brokerage accounts
- A Health Savings Account (HSA)
- College savings accounts
- Life insurance policies
- Bank accounts
- Farm equipment
- Real estate and land
- Personal possessions that are valued at $500 or more; and
- Family heirlooms, antiques, or collectibles.
The executor’s job can be simplified by making a list of any liabilities or debts that you owe. This can include a mortgage on your home, auto loans, private student loans, credit cards, installment loans, business loans, tax liens, medical bills and personal loans. Once you complete your personal estate inventory, save it with your estate planning documents provided by your attorney. Make sure it is in a safe place and review your inventory annually to make certain that it’s up to date.
Creating an estate inventory can make your job as an executor easier. If you submit an incomplete inventory, it may delay the probate process. According to Beck & Lenox, the probate process can drag on for a variety of reasons. Don’t let a poor inventory be one of them.
Reference: Yahoo Finance (Feb. 15, 2022) “What Is Included in an Estate Inventory?”