According to Texas law, an executor must be at least 18 years old and have no prior felony conviction, meaning almost any adult can administer an estate. Still, if you end up overseeing the assets of a deceased loved one, you should determine if you have the skill to organize an estate inventory.
Depending on the size of the estate, this can be a complicated process. Nonetheless, an executor must produce this document to help ensure heirs will receive their inheritance.
The definition of an estate inventory
An estate inventory is a comprehensive document detailing the financial affairs of a decedent at the time the person died. The primary goal of the inventory is to identify all assets and liabilities to determine the estate’s net value. This information helps the executor distribute assets and settle remaining debts.
Assets that go into an inventory
As executor, you must file an inventory with the assets owned by the decedent. These are the financial and physical holdings of the deceased that contribute to the estate’s overall value. Such assets can encompass a wide range of items, including:
- Real estate
- Personal property
- Bank accounts
- Retirement accounts
- Life insurance policies
Assets include both physical property and non-tangible assets. This means if the decedent owned interest in a business, you should include it in the inventory. Not all of these assets go through probate, so listing them in an inventory is a good opportunity to sort them out.
Liabilities to put in an inventory
Any financial obligations and debts owed by the decedent become part of an estate inventory. These include outstanding mortgages, credit card balances, personal loans and medical bills. An inventory must also document unpaid income, property or estate taxes.
The costs associated with the funeral and burial or cremation of the decedent additionally count as liabilities. Finally, the last costs incurred by an estate often include legal fees related to the estate settlement process to pay off the liabilities. Executors must settle these expenses from the estate assets before paying beneficiaries.
By having an accurate inventory in place, you as an executor can exercise your duties with the proper information and possibly avoid legal problems while overseeing the estate.