How detailed does an estate inventory need to be? A complete guide

The death of a close family member or friend is always emotionally draining. Tracking down and listing every asset they owned, in the midst of your grief, is probably the last thing you want to take on in that situation. And yet, if you're the executor of the decedent's estate, you have the responsibility to prepare an inventory of their possessions to help create an equitable distribution of their property.

How detailed does an estate inventory need to be? Read on for guidelines and tips that will help simplify the administration of your loved one's estate.

An estate inventory is a detailed list of assets and liabilities in a person’s estate at death, required for probate and legal distribution. The list is prepared by the estate's executor—sometimes referred to as a "personal representative"—and includes the value and location of each asset. It may consist of everything from bank accounts and cryptocurrency to automobiles and jewelry.

While the term "estate" might conjure images of the ultra-wealthy, the fact is that everybody has one. An estate is simply everything an individual owns or has a legal right to, minus any debts they owe. The executor must compile an inventory to show the probate court, as well as any heirs and creditors, what's in the estate. The estate inventory brings transparency to the process of administering the estate and helps ensure a lawful distribution of the deceased individual's assets.

Often, you can find an estate inventory worksheet online, usually through the local probate court or state judiciary's website. The exact name of the document can vary—sometimes it's called "Inventory and Appraisement" or simply "Inventory." Estate inventory requirements vary by U.S. state. Check your local probate court or state judiciary website for official worksheets and guidelines.

Assets that are jointly-owned with rights of survivorship should be listen in an estate inventory even though they will bypass the probate process. For example, if a husband jointly owns a savings account with his wife, she will typically assume ownership of the entire account upon his death. The same applies to any assets that have a named beneficiary, such as a retirement account.

The required level of detail in an estate inventory varies by state probate laws, which may specify asset categorization, valuation standards and documentation formats. But as a general rule, an estate inventory must be detailed enough for the probate court to identify, locate and value each asset.

Here are some tips to keep in mind:

• Describe each asset. Rather than listing "bank account," write "ABC Bank, checking account ending in 8474."
• Include identifiers for any bank or investment assets. You typically don't want to provide the entire account number, but enough to identify it.
• Provide the value of each item. In the case of financial assets or appraised items, you can include an exact amount. But for less valuable assets, you can approximate. For example, write "Miscellaneous jewelry valued at $500" if it contains several inexpensive pieces.
• Group less valuable items. For furniture and other household items, you don't always have to include each item individually.

Below are some estate inventory example entries, along with the level of detail typically needed:

Include these assets and liabilities in your estate inventory, with details the probate court needs—such as descriptions, values and account identifiers. Here's a sample probate inventory list:

• Bank accounts. Include the name of the bank, account type, last four digits of the account number and balance as of the date of death.
• Investment accounts. Provide the name of the institution, account type, last few digits of account number, holdings and balance at date of death.
• Real estate. Include street address, basic description and appraised or estimated value.
• Vehicles. List details such as the year, make, model, vehicle identification number (or just the last four digits) and value.
• Digital footprint. Include digital assets in your estate inventory—such as cryptocurrency, domain names, trademarks and social media accounts—since these may have financial or sentimental value. Include the description, the account number or username and the values (if any).
• Jewelry and collectibles. Provide a description and appraised value, if expensive.
• Household goods. You can group these items into categories, such as "living room furniture." Include descriptions and estimated total values.
• Business interests. Record the name of the business, the ownership type (such as sole proprietorship or general partnership), the decedent's percentage interest and the fair market value.
• Debts and liabilities. List any outstanding loan or utility balances as well as taxes owed. Include the creditor's name, the last few digits of the account number, the type of debt and the balance owed at death.

When you compile an estate inventory, it's essential to be accurate and complete to make probate proceed optimally. Failing to provide the necessary information can lead to several problems, including:

• Probate delays. When the court has to find additional information—or rule on the accuracy of certain details—it can drag out the process of liquidating the estate. That can lead to additional attorney fees and court costs.
• Family tension. If heirs suspect you reported incorrect information or left out certain details, they may raise an objection with the court. Just as important, the lack of trust that's created can lead to serious strain among family members and other heirs.
• Legal liability for executors. If the estate fails to pay a creditor because the liability in question wasn't properly documented in the inventory, there's a possibility the creditor could sue the estate. Getting it right the first time can save a lot of money and stress.

Completing an exhaustive inventory of assets can seem like an arduous task, especially as you deal with the emotional impact of a loved one's loss. But being meticulous is the best way to avoid disputes and simplify the probate process. Here are some tips to keep in mind:

• Collect all the necessary documents. Make sure to gather all of the deceased person's banking and financial statements, deeds, titles and business records. Having all of that information in one place will help keep you organized so you can answer any questions that may come up during the probate process.
• Do an exhaustive search. Some assets are harder to find than others. Talk with people who knew the deceased—including financial professionals—to make sure you don't overlook anything. Be sure to inquire about any safety deposit boxes or other places where information about assets may have been kept.
• Use online tools or spreadsheets to track assets. Using software to keep track of information is usually more efficient than wrestling with a mountain of paperwork. Some tools also have step-by-step guides for completing the inventory, so you don't forget any categories.
• Get professional appraisals for valuable items. It can be tricky to record the value of certain pieces, such as artwork or collectibles. Having an appraisal done by an expert will give you a more accurate understanding of what it's worth and help you avoid disputes.
• Work with a financial advisor or attorney to ensure accuracy. If you'd like extra assurance that you're listing everything correctly, seek out a competent estate planning attorney who can ensure you perform your duties correctly.

Estate inventory requirements are governed by state-specific probate laws, which may differ in terms of asset disclosure thresholds, documentation formats and deadlines for submission. To better understand what information to include, first do an online search of the guidelines for the local probate court, which are administered at the county level. Alternatively, you can consult a local attorney, who can help guide you through the process.

While the exact laws may differ somewhat from one state to another, the same basic principle applies when performing an inventory: Details matter. Estate planning should be personalized, just like financial planning—and state law is one of the important variables to account for.

When performing an inventory of an estate, being as thorough and accurate as possible is imperative. Getting it right the first time, while time-consuming, can help you steer clear of costly delays and disputes further down the road.

Now may be a good time to think about the eventual disposition of your own assets as well. To make estate planning part of a broader strategy for building your future, connect with a Thrivent financial advisor.