Probate: Gathering and Safeguarding Assets
The process of inventorying the estate can be overwhelming, especially if the estate Executor was not familiar with the decedent's financial affairs.
The Executor should gather the most recent statements of all bank accounts, stock accounts, and any other accounts that were owned, either individually or jointly, by the decedent and deliver the same to the attorney. Although joint with right of survivorship accounts pass to the co-owner by operation of law, rather than through the probate process, they must still be inventoried for estate inheritance tax purposes.
Most accounts are no longer frozen, as was the case prior to recent legislation, and no longer require an Inheritance and Estate Tax Waiver. However, certain documentation is still required in order to close these accounts and move the assets into accounts in the name of the estate. The attorney assists the Executor with this process by applying for the federal identification number for the estate and gathering the documentation necessary to transfer the assets to the newly established estate account. The estate account is then used to receive any income into the estate and pay the bills of the decedent and other administration costs and expenses. Occasionally, in certain estates, a formal estate account is not necessary.
Original deeds to real property, car titles, mobile home titles, utility or boat trailer titles, boat registrations, and all other registered ownership documentation should be gathered and delivered to the attorney for safekeeping until such time as the ownership is transferred. Valuing this type of property may require formal appraisals such as for the real property or some research may be required such as compiling county tax valuations and blue book valuations.
Quite often, these items as well as original stock certificates, life insurance policies, and other important papers are stored in the decedent=s safety deposit box at the bank. The Clerk of Court is no longer required to inventory a decedent's safety deposit box, but a copy of the inventory should be given to the attorney to be filed in the estate file. If there is a co-owner on the safety deposit box, the co-owner may inventory the box, but the Executor must be present in order to gather any items owned by the decedent. Again, certain documentation may be required and the attorney will assist with gathering the same.
After locating all paperwork relative to the decedent=s finances and assets in the home place and safety deposit box, the Executor should then assure that the attorney receives copies of monthly statements for all accounts until such time as the account or the estate is closed and the funds are distributed. This double check assures an accurate inventory. It may also be prudent for the Executor to file for a change of address for the decedent with the United State Postal Service in order to assure that all correspondence directed to the decedent is reviewed by the Executor.
If the decedent owned assets that may be affected by the economy or the volatility of the stock market, the Executor should consult with a broker or financial advisor as well as an accountant due to possible tax implications.
Finally, relative to tangible personal property of the decedent, the executor should make every effort to protect any property that can be easily stolen. If there is a surviving spouse, this task is greatly reduced. If the decedent died while living alone, property such as jewelry, firearms, coin collections, artwork, and similar valuables should be gathered by the executor and protected. Opening an estate safety deposit box or arranging for warehouse storage might facilitate this task. The Executor should not hasten to distribute this property to the relatives soon after the funeral. There is plenty of time to accomplish this task and time is needed to appropriately plan the distribution of tangible personal property.
As alluded to earlier, once the assets of the estate are under the control of the Executor, the Executor has a duty to use good faith and reasonable diligence to protect such assets from damage or loss. Accordingly, the Executor should confirm that all property such as residential homes, vacation homes, rental property, automobiles, boats and jewelry, is adequately insured, if applicable, for theft, fire, wind, flood, or other relevant insurable events. Please note that a standard homeowner's policy may not provide adequate coverage for vacant homes, thus the existence of any vacant home should be brought to the attention of the insurance agent.
In general, valuation of assets of the decedent must be based on the date of death value. An experienced estate settlement attorney will be able to determine whether formal appraisals should be obtained and can assist greatly in determining these values. The initial inventory is only preliminary and the formal inventory filed with the Clerk of Court is not due until ninety (90) days after the opening of the estate.
Next in our Probate series: Probate: Life Insurance, Annuities, Retirement Benefits and Social Security