What Is an Estate Inventory and How Can an Asset Search Can Help You Make One?
When a person dies, the executor or personal representative of the estate is tasked with recording the estate of the decedent with the probate court so the court can approve estate distributions to the heirs. It is necessary for the executor to file an estate inventory with the court, which is just what it sounds like – a list of the deceased assets and debts.
As an attorney advising someone who is the personal representative of an estate that is going through probate, you are responsible for assisting your client in presenting a complete and accurate list of the decedent’s assets to the court. Even if mistakes are completely innocent, it could lead to conflict between heirs or animosity towards the executor of the estate. Beneficiaries of the estate could file a complaint with the probate court and accuse the executor of mishandling the assets, or of willfully excluding and/or undervaluing the assets. Even if no one complains, if assets get left out of the estate, reopening probate is an awkward step to have to take.
Most estates in Massachusetts have to go through probate. Probate includes assets that do not pass directly to heirs. It excludes assets such as bank accounts that are made out to beneficiaries or life insurance that is named to beneficiaries. A trust will usually not have to pass through an estate for example, as its proceeds go directly to beneficiaries.
Determining what is and is not going through probate is part of the executor’s job, but it can be complicated. There could be old life insurance policies that have not been canceled, or old bank accounts that have not been closed. The decedent might have recently refinanced their mortgage to pay for a renovation, but no one knows they did this. It is common for someone with no children to leave money to their relatives, but the beneficiaries and the executor do not know enough about the person’s financial life to know what assets will be included in the estate, let alone which should go through probate.
So, what assets need to be included in an estate inventory? An estate inventory should include all the assets that have to go through probate, but also the debts and liabilities owed by the deceased person. Some of the types of assets that may need to go through probate include assets titled in the person’s name such as business interests, stocks, cars, boats, and planes.
The best way to ensure your client’s job as an executor goes smoothly is to do a quick asset search that will discover all the assets and liabilities that the executor will need to present to the court. An Asset Search with Asset Searches Plus can turn around in a couple of days and can cost as little as $185. It is time consuming for you or your client to have to delve through insurance registries and public records and it is more likely that you will miss something. An asset search is a comprehensive picture of a decedent’s assets, which can then be narrowed down to a list of what should go through probate.
An asset search not only covers assets such as real estate, patents and licenses, business interests, stocks and bonds, investments, insurance policies, cars boats and planes, it can also uncover liabilities and debts. A lien, judgment, mortgage, other lawsuits, bankruptcies can all be identified in an asset search.
As an estate planning attorney or as a personal representative, it is your responsibility to satisfy your due diligence to your client or to all heirs. An estate inventory needs to cover both assets and debts, and a quick asset search will be able to do this, thus giving your client and the estate’s heirs peace of mind.