One of the essential steps in probate process is filing an inventory of all properties that are part of the estate. This work is the responsibility of the performer, and it is usually no small feat. It involves determining the value and ownership of real estate, securities, bank accounts, and other assets and filing an official inventory with the probate court. Each state has different rules, forms, and deadlines for this process. Therefore, you will want to check with the courts in your area before you begin. Consider work with a financial advisor as you prepare your estate plan.
What is included in a real estate inventory?
A real estate inventory is used to determine the overall monetary value of the property. When compared with any claims creditors have against the estate for taxes, mortgages or other liabilities, this will determine if the estate is solvent. The inventory will also be used to determine if the property is subject to property tax.
Any property that someone held at the time of their death should be included in their estate. This is where the builder’s job can be a bit tedious, but it is imperative that this is done correctly. Here is a breakdown of the most common items in the inventory for probate:
Real Estate: houses, apartments, condos and investment properties
Financial accounts: checking accounts, savings accounts and safe deposit boxes
Invest: brokerage accounts or certificates for stocks, bonds, CDs and other investments
Retirement account: 401(k)s, HSAs, Traditional IRAs, or Roth IRAs
Salary: unpaid wages, unpaid commissions or unexercised stock option allowances
Insurance policy: life insurance or annuity
Vehicle: cars, trucks, motorcycles or other vehicles
Business benefits: any business shares in their name
Debts/Judgment: any personal loan to person or money received through court judgment
Prepare an inventory of real estate for probate
Before an inventory can be filed, it must be prepared. This begins with checking state law to make sure inventory is prepared and, subsequently, filed according to local regulations.
Primary duties in preparing the inventory include identifying all assets owned by the estate. Again, these can include cash, bank accounts, retirement accounts, brokerage accounts, stocks, life insurance contractreal estate, collectibles and personal belongings such as vehicles.
Preparing a full inventory may require several investigations. At a minimum, it will involve checking the deed, title, account statements and tax returns on the decedent’s desk, filing cabinet and safe. It may also be necessary to search the person’s home and even interview relatives and friends to ensure that all financial and physical assets are accounted for.
While completing and filing an inventory for a small and simple estate can be done in a few months, more extensive and complex estates can take years for the executor to fully assess. enough. This process can be significantly delayed and complicated if the estate includes real estate in several states, each of which may have different rules for handling assets in wills.
Providing an empty list of items like “home” or “car” is not enough. For example, an inventory entry for real estate would include the address, legal description, and copy of the deed as well as an estimate of fair market value, which can be prepared by a professional appraiser. . The list of bank accounts will include the name of the bank, the account number, and the cash balance. Other properties will be identified with similar details.
Once all assets are located and the necessary information has been collected, the executor can fill out an inventory. Many states have specific inventory forms that must be used for probate of wills inventory. The probate court where the estate is being settled will provide online or hard copies of the appropriate forms as well as instructions for completing those forms.
How to File a Real Estate Inventory with Probate Court
Once the probate inventory is completed, the executor submits it to the probate court. As is the case with the entire probate process, the exact details of how to file an application will vary according to the laws and policies of the jurisdiction where the court is located. In most jurisdictions, probate courts charge a fee for filing a probate inventory. Assets in the estate can be used to pay this fee.
In addition to different forms, states also have different deadlines for filing inventories. This is usually about nine months after the death of the person whose property is being settled. However, the deadline could be much shorter, depending on the state. Again, it’s important to know the local rules.
The probate judge may allow an extension of the time limit if the practitioner has difficulty completing the inventory. And some states don’t have deadlines for completing the inventory. However, the executor’s fiduciary obligations to the beneficiaries of the estate can mean that the declaration of inventory should not be delayed without good cause.
Inventory handling is just one of those responsibility of the executor. In addition, the executor must file the will with the probate court, pay any debts or taxes owed by the estate, and oversee the distribution of any remaining assets to the beneficiaries. .
Preparing and filing a probate inventory is one of the most complex and potentially time-consuming parts of the probate process. It involves gathering detailed information about every property owned by the decedent, recording the information in an approved format, and submitting it to the probate court along with, often, a fee. Obligatory. Each state has a number of different rules for doing this, including different deadlines. Since inventory will be used to determine the financial value of the property and how and if it is subject to property taxit is important that the executor executes it competently.
Advice on estate planning
The help of an expert Financial Advisor may be invaluable to the executor of the estate. Finding a qualified financial advisor is not difficult. SmartAsset’s free tool connects you with up to three financial advisors in your area and you can interview the right advisors for you for free to decide which one is right for you. If you are ready to find an advisor who can help you achieve your financial goals, start right now.
If you have a large estate, property tax at the state or federal level can be huge. However, you can easily plan your taxes in advance to maximize the inheritance of your loved ones. For example, you can gift portion of your estate advance to heirs, or even set up a trust.
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