One of the initial and crucial duties of the executor of an estate with a will or the administrator of an estate without one is the preparation of an inventory. An inventory is a listing of the assets of an estate. Across the court, courts have developed inventory forms based on the requirements of state law. An executor or administrator is obliged to utilize the inventory form approved by a particular probate court.
Where to Obtain an Inventory Form
As is the case with so many things in this day and age, estate inventory forms needed for California probate cases can be found online. If you retain a lawyer to assist in the affairs of an estate, a probate attorney is likely to have a form available for use by clients.
Categories of Assets
A typical inventory form, including those used by courts in California, provides for broad categories of different types of property owned by a deceased person. Examples of asset categories typically found on inventory forms in California and elsewhere include:
- Real estate (residential)
- Real estate (investment)
- Cash accounts
- Investment accounts
- Retirement accounts
- Life insurance
- Home furnishings
- Recreational items
Depending on the unique circumstances of a deceased person, there is also room available to add information about other types of property a deceased person may own.
Determine Property or Asset Value
A key element of preparing an estate inventory is obtaining and listing the value of property. One area in which some extra effort may be necessary is obtaining the fair market value of real estate. More often than not, this is the fair market value of the deceased individual’s home.
Unless a reliable, independent, professional appraisal recently was conducted in regard to real estate, a probate court is likely to require an executor to obtain an appropriate appraisal of the property. There are other types of property that may also require an appraisal as part of the estate inventory process. These include:
- Antiques or higher value home furnishings
Absent obtaining a realistic valuation of property that is part of the estate, an executor is unable to effectively sell assets or distribute to heirs of the estate. For example, prior to the time a residence is put up for auction or placed on the market for sale as part of probate proceedings, the court needs to know the fair market value of the real estate based on an appropriate professional appraisal. Armed with this information, the court establishes a reserve price on the real estate if an auction is scheduled. This is the minimum bid that must be met in order for a sale to be approved by the probate judge. Similarly, the appraisal aids in establishing the base price for which the real estate can be sold on the open market.
Determine or Confirm Ownership of Property
Once a basic list of primary assets of an estate is created, the nest step is to determine or confirm actual ownership of the assets. Some assets of an estate may be jointly owned by the deceased individual and someone else. In addition, there may be assets that technically are not part of an estate. For example, the deceased person may have owned a car, financial account, or even real estate that was owned in joint tenancy with a right of survivorship. What this means is that a certain asset was jointly owned by the deceased person and someone else before the individual died. In addition to being jointly owned, the asset was owned with a right of survivorship in favor of someone else when the deceased person died.
This means that the other individual automatically became the owner (or full owner) of an asset after the deceased individual passed away. As a consequence, that particular asset is not part of the probate estate. Nonetheless, probate courts typically want these assets listed with an explanation that they are not part of the probate estate but were owned in some manner by the decedent.
Collect Paperwork Associated With Ownership of Property
As part of the inventory process, paperwork and documents related to ownership of particular items of property needs to be collected and organized. For example, these documents include such items as titles to cars, paperwork related to bank or investment accounts, and other documents related to the ownership of certain types of property.
File Inventory With Probate Court
The last step in the preparation of an inventory is filing the completed form with the probate court. Typically, the inventory form is filed with the clerk of the probate court.
There are some instances in which a probate judge might schedule a hearing when the inventory is filed with the court. For example, a hearing might be schedule after filing an inventory to obtain permission to sell real estate.