Probate is an important judicial process through which a deceased person’s Will is proven and their estate is distributed amongst their heirs. Although this may sound relatively straightforward, the probate process is rather complicated and is composed of several, compartmentalized steps. One such step is probate inventory and appraisal. This guide will help explain why the inventory process must happen before or during probate, and what’s typically included. Then, we’ll go over how to prepare inventory for probate. If you’re ever shoulder-tapped to serve as the Executor of an estate, you’ll know exactly what to do!
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Why Do I Need to Prepare Inventory for Probate?
If you have been nominated by a Testator to serve as the Executor of an estate, and then later appointed by the probate court, then you’ll quickly find out that one of your duties includes creating an inventory of the decedents’ assets. This is called “Inventory and Appraisal.”
The purpose of Inventory and Appraisal during the probate process is to take inventory of a deceased person’s assets and property, as well as determine the value of these assets. Thus, it is an important process that both defines what makes up the decedent’s estate, and the value of the estate as a whole. The appraisal values included in the Inventory and Appraisal determine the statutory fees that are paid at the closing of probate.
Inventory and Appraisal is also a practical exercise that can help inform how the estate should be distributed. Beneficiaries may agree to throw away or donate items that essentially hold no sentimental or fiscal value. Remaining items that have value, whether monetary or sentimental, can be distributed amongst beneficiaries. Knowing the appraised value is helpful as it can ensure that physical items are divided up in such a way that align with the terms of the Will.
What’s Included in an Estate Inventory?
If you find yourself thinking through your own assets and belongings, you may also be thinking that estate inventory is a tedious process. Here, you’re not wrong. Pretty much any asset owned by a person at the time of their death should be included in the estate inventory.
Here are common types of items that are included in an estate inventory:
Personal items: clothing, jewelry, antiques, collectibles, and other household items of sentimental or monetary value
Vehicles: cars, trucks, motorcycles, etc.
Real estate: real property that was owned by the decedent, including houses, condos, and investment properties
Financial accounts: checking accounts, savings accounts, contents of a safety deposit box, retirement savings accounts
Investment accounts: stocks, bonds, CDs, cryptocurrencies, and any other types of investments
Salaries and wages: any unpaid wages, salaries, commissions, or stock options
Insurance policies: life insurance or annuities
Business interests: business holdings and assets
Debts by others: personal loans made to others or money received through court judgments
Be sure to check out this guide that takes a complete look at probate assets that should be included in the inventory.
How to Prepare Inventory for Probate
Now that you understand what probate inventory is, and why it’s important, it’s time to talk about how to prepare an inventory for probate. Based on the list above, you probably now have a good idea that taking an inventory for probate is quite the project. No matter how tedious it may feel, it is still important to do a careful and accurate job. As the estate Executor, it is your fiduciary duty to create a thorough and accurate inventory so that you can obtain an equally accurate appraisal of the estate.
Here are the steps for preparing an estate inventory for probate:
Identify all assets owned in the estate
Take extra steps to prepare a full inventory
Gather details of all assets
Executor fills out inventory
We will go over each of these steps in detail in the corresponding sections below.
1. Identify all assets owned in the estate
If you’re not sure where to begin, first start by reading through the decedent’s estate planning documents. If they were thorough, they may have already listed out several assets for you to include in the inventory, such as a list of financial accounts, what’s in them, and how to access them.
Otherwise, feel free to use the list from the previous section in this article as an example checklist. (Note: the list is not exhaustive and serves as an example of items that are included in an estate.) You may find it helpful to group assets, property, and items by category. For instance, you want to sit at a computer and go through all online banking, investments, savings, and insurance policy accounts in one session. Then, you may want to tackle one part of the decedent’s house in another.
As you create your list of assets, be sure to also include descriptions such that they can be identified later.
2. Take extra steps to prepare a full inventory
As you create your inventory, make sure you’re turning over every stone. There may be intangible assets stored online that you may not have thought of, or tangible assets stored away in places other than the decedent’s home.
You may have to search high and low in the name of finding anything and everything of value that was owned by the decedent.
Note that important documents can serve as clues in your inventory process. Search through file cabinets, desk drawers, and even safety deposit boxes to locate receipts, warranties, ownership titles, deeds, and tax return documents. These will prove helpful in the probate process and should be consolidated and organized.
3. Gather details of all assets
Also, be sure to gather and write down the key details of each asset. The guidance on how to write descriptions for assets depends on the asset type. For instance, a real estate property can be described using its address and location, along with its legal description.
When you submit the inventory, you would attach a copy of the deed and write something along the lines of “see attached deed for full legal description.”
For an item such as a vehicle, you might list its make, model, year, condition, color, current mileage, and Vehicle Identification Number (VIN.) For financial assets, you might list the monetary value, the account number, and type of asset.
The Probate Court overseeing your case will provide you with Inventory and Appraisal forms and attachments with further instructions. Be sure to provide the inventory in such a manner that would be accepted by the court.
4. Executive fills out inventory
The Probate Court overseeing your case will provide you with Inventory and Appraisal forms and attachments with detailed instructions.
Using your personal inventory list that you created, fill out the required forms and attachments. You can find many Inventory and Appraisal examples online, such as this one provided by Riverside County in California. In this example, the instructions point to weblinks to obtain necessary forms and helpful handbooks. It also includes examples on how to fill out the Inventory and Appraisal, examples of the inventory attachment sheets, and examples of different types of assets and acceptable descriptions.
Be sure to provide the inventory and descriptions in a manner that will be accepted by your respective Probate Court.
Educate Yourself on the Probate Process
If you’ve been shoulder-tapped to serve as an Executor to an estate, hats off to you. It is an important role, and it certainly is not an easy one. However, most individuals are more than willing to roll up the sleeves to help administer the estate of a loved one.
Probate inventory is one of several stages of the probate process overseen by the court. Although it is one step, it is a significant step. As we explained in this guide, it is the Executor’s job to comb through all of the decedent’s assets, inventory them, and include descriptions for each item. Then, this inventory is appraised by professional appraisers to determine the value of the estate.
Once this step is completed, the estate is much closer to distribution, and ultimately, closure. Although the inventory process will undoubtedly begin to feel tedious, keep its importance in mind to stay motivated to be as thorough and accurate as possible.
There’s no lesson better than serving as an Executor to learn how important it is to have a solid, organized Estate Plan. You may have several realizations through such an experience. First, when you write your Will, you’ll realize that you’re doing a kindness by listing out your assets and their location as thoroughly and specifically as possible. This will make your Executor’s life much easier. Second, you’ll find that moving assets into a Trust will help keep them out of an estate and thus out of the probate process. Ultimately, this will give the family more control over how and when assets are distributed to loved ones.
The probate process can be lengthy and complicated, especially during a time of grief. If this is something you don't want to go through alone, consider getting help from our probate experts. We offer unparalleled support and guidance to simplify the probate process. Ready to get started? Schedule your free consultation.
Should you feel motivated to create or update a solid Estate Plan of your own, we’re here to help! Trust & Will’s online platform makes it that much easier to organize your assets and create a cohesive, exhaustive Estate Plan. Doing so will make for a much smoother probate process for everyone involved. You can create a fully customizable, state-specific Estate Plan from the comfort of your own home in just 20 minutes. Take our free quiz to see where you should get started, or compare our different estate planning options. Get started today!
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