By Sam O’Neill
When grieving, the last thing anyone wants to deal with is a complicated legal and financial process. But that is exactly what happens when families go through the probate process after losing a loved one.
Probate is the legal process of administering a person’s estate after their death. If your loved one had a last will and testament, probate will involve validating the will, collecting the decedent’s assets, distributing the assets to the beneficiaries listed in the will, and paying applicable taxes. If a loved one dies without a will, the probate court will rely on the state’s intestate law to determine how to distribute the assets.
The probate process is intimidating. It can be overwhelming, and it is riddled with deadlines and filings that can be confusing.
In this article, and future articles, we will discuss questions that come up frequently at meetings with a newly appointed personal representative.
This quarter’s topic is: What is an Inventory?
Put simply, an Inventory lists the property owned by a decedent at the time of their death. The personal representative of an estate must file an Inventory with the court within three months after the date of their appointment. Three months is a tight deadline, but the court does allow for the filing of a supplemental inventory if a personal representative discovers property not previously included in the Inventory or learns that the value of an item was incorrect at the time of filing.
The purpose of an Inventory is to:
a) List the property of the decedent in reasonable detail;
b) Include an indication of the fair market value of each item listed at the time of the decedent’s death;
c) List any loans or encumbrances against the items listed in the Inventory; and
d) List how the fair market value was determined. For example, Kelly Bluebook can be used to determine the fair market value of a vehicle or a home value can be based on the tax assessed value. If an appraiser is used, list the appraiser’s name and address on the items that were appraised.
The most common items that are included in an inventory are:
• Bank Accounts – checking accounts, savings accounts, money market accounts, and CDs
• Real Estate – personal residences and investments properties
• Stock and Bonds – Brokerage Accounts, IRAs, etc.
• Retirement Accounts – Pension plans and workplace retirement accounts, 401(k)s, etc.
• Insurance policies – Life insurance if payable to the estate, annuities, etc.
• Business interests – Partnerships, corporations, LLCs, and sole proprietorships
• Personal Items – antiques, collectibles, jewelry, etc.
Most of this information can be retrieved from the banking or financial institutions that the decedent used by submitting a written request along with a copy of the Letters of the Personal Representative that are issued by the court. It is also important to check for safety deposit boxes or safes which could include paper financial documents (stock certificates or bonds).
The preparation of an Inventory may sound like a daunting task and may include a little detective work, but it should not be feared. Gaining the assistance of a probate attorney will make the process easier. Abrahams Kaslow & Cassman LLP has been assisting families with the probate process since 1946. Contact Sam O’Neill at [email protected] for more information.