How to Create an Estate Inventory

One of the earliest and most important jobs for an executor or administrator of an estate is to create an inventory of all the major assets of the estate, and assign a value to those assets.

If it is required by the probate court, the estate inventory must be filed with the court within six months of the appointment of the executor or administrator, and it must also be served on heirs or beneficiaries of the estate.

Things can get complicated and overwhelming quickly — especially for large estates that may include multiple homes, vehicles, art work, jewelry, investment accounts and other assets.

It’s important to get organized, develop sound methods for documenting your work, and create good processes and systems for tracking expenses and keeping copies of receipts and other documentation. 

Start by creating a spreadsheet of the assets, with additional columns so you can track the change in value of certain assets — such as bank accounts, or the value of a house — over time. 

An estate inventory typically includes:

• House(s)

• Cars

• Boats, motorcycles, recreational vehicles, etc.

• Life insurance policies

• Bank accounts

• Investment accounts, stocks, bonds, CDs, etc.

• Art work

• Jewelry

Some assets, like a car, are pretty easy to value by using a service such as Kelly Blue Book or Carfax to determine the market value of what you could expect to get for selling that item.

Other assets such as a house may be harder to value. At a minimum you should determine the value assigned by the tax assessor. It may be necessary to obtain an appraisal or a report of comparable sales in the area to determine the value of a home or other real property.

Certain assets such as jewelry and art work may be harder to value, and could require the engagement of professionals in the industry. 

There may be a requirement to have a bond for the estimated value of  the assets of the estate. Bonds and inventories can be waived in certain instances by agreement of heirs or by provision in a Will. Waiver of inventory and bond can save the executor or administrator time and hassle.

Keep in mind that the executor or administrator is also responsible for taking care of and maintaining the assets of the estate. That may include keeping the electricity and gas on at the house, and hiring a landscaping service or pest control company regularly. For automobiles, that may include getting the car serviced or driving it occasionally to keep the battery running.

If it is required, you may also file annual returns with the probate court to account for any changes in the value of the assets, such as a decline in the estate checking account as you paid for services related to running the business of the estate.

Some courts are more particular than others about the exact format of estate inventory reports, and they may reject filings that don’t meet their requirements. Be prepared to work with an experienced estate attorney who can help you navigate the process of re-preparing and re-filing with the court.

Here are a few tips and pitfalls to avoid when creating and maintaining an estate inventory:

• Keep scrupulous records to document what you did

• Save copies of receipts and related documents

• Create digital versions of all spreadsheets, receipts and records so it’s easier to share them with an attorney, an accountant or the courts 

• Be mindful of the dates when you’re expected to file reports to the court (pro tip: it’s based on when an executor or administrator is appointed; not by calendar year)

Once a good baseline estate inventory is established, it will be relatively easy to update it as assets are sold or transferred to heirs and beneficiaries. Keep all records as a digital archive of the work you performed in case you or others need to refer back to those documents in the future. 

​​Disclaimer: This content is for informational purposes only, and does not constitute legal advice nor create an attorney-client relationship with Bequest Law.

Why Your Estate Plan Should Include Digital Assets

Losing a loved one is an emotional and overwhelming time for most people, and there’s an often-overlooked aspect of handling an estate that can make things more difficult: digital assets.

Spouses, siblings, family members and others who are appointed executor or administrator of a loved one’s estate are often surprised to discover that they can’t easily access bank accounts, documents, photos, social media accounts and even the phone or computer of the deceased.

Large tech companies that control these accounts are getting better at offering practical guidance and options to allow people to designate a beneficiary for their digital assets, but policies vary widely from company to company and state to state.

Attempting to log into the accounts of the deceased without proper beneficiary ownership or legal status could violate company policies and privacy and fraud laws. On a more practical level, you also risk getting you locked out of those accounts — which can make handling the estate significantly harder.

We sat down to talk with Rachel Donnelly, the Founder of Black Dress Consultants, a boutique company based in Atlanta that helps people navigate life’s transitions and handle the estates of loved ones who die. 

Q: What do people misunderstand about what happens to your digital assets after you die?

A: Back before the digital revolution, the executor or administrator of the estate would just sit by the mailbox or open the safe deposit box and get the paperwork for the handful of accounts the deceased had. Nowadays, the average American has something like 200 online accounts — everything from your bank and retirement account to your doctor and dentist, social media like Instagram or Facebook, your online retail accounts like Amazon — and that’s a lot for your loved ones to keep track of.

The challenge is that a lot of people don’t think about it until after the fact. Your email and mobile number aren’t listed on your death certificate, so how can you even prove who those accounts belong to and who has the right to access them and take them over when you die? What often happens is that someone means well, and maybe the son or daughter or spouse of the deceased tries to log into their email account, and now you’ve just circumvented the process and impersonated a dead person.

If you can’t document and prove that you are legally entitled to do that, you may have just inadvertently violated privacy laws, health care privacy laws, fraud laws and the terms of service agreement or  policies of the company that owns that account.

Q: How should people prepare so their digital assets are secure and easy to access when they die?

A: Make your digital assets part of your estate plan. Have a list of your most important accounts — and the logins and passwords (or how to access a password encryption or management service) — and specify which executors or family members you want to access which accounts after you die. You can write this into your will and make it part of your estate plan.

Be sure to tell your loved ones, and have it specified in your estate plan, what you want to have happen with things like your social media accounts. Some people might want their Facebook account memorialized, for example, but other people might want it deleted and shut down.

For spouses and domestic partners, avoid sharing logins on jointly owned accounts. Each person should have their own independent way to access the account. If you have a joint checking account, make sure you have joint tenants of ownership.

Most states, including Georgia, have adopted a version of the Revised Uniform Fiduciary Access to Digital Assets (RUFADA) act, which gives executors a pathway to access your digital assets after you die. Some companies also have policies in place or forms you can submit to formally identify a “transfer on death” beneficiary or delegate, but many companies don’t do that yet. 

Q: Which digital assets should be included in an estate plan?

A: Literally any account you have a login and password for, such as:

• Phone, computers and tablet — including Apple iCloud or other digital services

• The mobile phone or WiFi company like Verizon or AT&T

• Bank, retirement, cryptocurrency, Venmo and Paypal, and other financial accounts

• Health records and doctor and dentist patient portals

• Cloud storage accounts like Google Drive, Microsoft Sharepoint, etc.

• Social media accounts

• Entertainment accounts such as Netflix and Hulu

• Digital assets such as photos, videos and voice memos

• Online retail accounts such as Amazon, Walmart and Target

• Travel accounts such as airlines, hotels and rental car companies

• Rewards accounts such as Ace and Kroger

• Food accounts such as Uber Eats, Chick-fil-A and Chipotle

• Websites, blogs or other written material that you might own

Q: What if a loved one dies and they didn’t make any provisions for their digital assets? Then what happens?

A: The executor or administrator is going to have to be patient, and do some research to figure out which accounts the deceased had, and then reach out to all those companies to prove that they have the legal right to access those accounts. It can take a lot of time and frustration, especially on critical accounts such as banking or other services you need to keep the house maintained while you administer the estate.

When a person dies, the death certificate is tied to their Social Security Number, so any major financial accounts or other accounts tied to that Social Security Number will get notified that the death occurred.

That’s not usually the case with other accounts like online retailers and social media and so forth. Sometimes my clients find accounts many months or even years later that they didn’t know existed. Billions of dollars go unclaimed each year because accounts go dark when someone dies, and nobody is there to claim it or take possession. 

Q: What advice do you have for people who are thinking about creating or updating their estate plan?

People don’t realize how much this can affect their family and the grieving process. You’re going through trauma and heartbreak over the death of someone you love, and now you’re tasked with taking care of all these logistics and making decisions that you have no idea how to make, and you don’t know what the person would have wanted. 

Planning ahead, thinking these things through, making your wishes known, and having your accounts and logins and passwords in order is one of the greatest gifts you can give to your loved ones. It will make administering your estate so much easier on them, so they can focus more on their emotional needs at a difficult time. Give people more space to grieve, and not have to deal with all these other administrative things.

About Black Dress Consultants

Rachel Donnelly founded Black Dress Consultants to helps people handle the estates of loved ones who die. She is also a co-founder of Professionals of After Loss Services (PALS), which offers training and support to industry professionals that work with individuals and families after the loss of a loved one.

Disclaimer: This content is for informational purposes only, and does not constitute legal advice nor create an attorney-client relationship with Bequest Law.

Estate Executor vs. Administrator: What’s the Difference?

When someone dies, the courts will name an executor or an administrator to handle the business of running and winding down the person’s estate.

What’s the difference?

In essence, both an executor and administrator are tasked with the same core duties: obtaining an estate tax identification number, opening an estate bank account, creating an inventory of the estate, filing reports with the court, filing tax returns for the deceased, etc.

However, there are a few distinct differences that everyone should be aware of.

If the decedent had a will, the person in charge of their estate will be named executor. They will take an oath to administer the estate according to the wishes of the deceased.

If there was no will, the person in charge of the estate will be named administrator. They will make a promise to the court that they will administer the estate as dictated by the law.

For either role, it’s important that you understand and follow the exact processes and procedures for properly executing the duties as specified by law. 

An experienced estate attorney or probate attorney can help guide you through this process, and help you avoid common mistakes that can cause family drama, arguments, or even litigation over how an estate is being handled.

Who Gets What?

For example, a grandmother may have intended to leave money for a neighbor friend who helped care for her and bring her groceries in the last years of her life. But if there isn’t a will specifying that wish, the neighbor won’t be recognized as an heir under the law, and the administrator cannot give money to the neighbor.

Likewise, if a grandmother had a will and specified that she wanted all of her assets to go to one single person in the family, the other members of the family aren’t entitled to any portion of the estate. Should other people in the family choose to challenge the validity of the will or question whether it was made under duress or not of sound mind, there is a legal process for doing so.

If an ex-husband was still named as the beneficiary of a life insurance policy, the executor or administrator cannot veto or ignore that — there is a legal process for challenging and resolving such issues. Many people also misunderstand that life insurance is handled outside of the estate.

If the decedent designated a minor child as the beneficiary of their 401(k) retirement account or other financial accounts, the executor or administrator will probably need to get a conservator appointed to manage the assets for the child until they reach age 18.

Who’s an Heir?

Executors and administrators must avoid any temptation to make verbal commitments or promises to potential beneficiaries or heirs.

If there wasn’t a will specifying who gets what, there are specific methods to determine a decedent’s legal heirs.

When there is a spouse and a biological child or a legally adopted child, in the state of Georgia an estate would typically be split 50/50 between them. If there is a spouse and two biological or legally adopted children, the estate would likely be split into thirds. Stepchildren can also be considered heirs if they have been legally adopted.

Grandchildren, great-grandchildren, siblings, nieces and nephews, and other relatives may also be considered heirs.

The probate courts oversee the process of determining heirs, and the administrator cannot make decisions that deviate from that legal process. Working closely with an estate or probate attorney who specializes in this work can make the process more smooth and less contentious among family members who may misunderstand how the law works.

Whether you serve as an executor or administrator, it is important to be patient and organized as you handle the business of winding down the estate and reach the final goal: closing the estate file through a Petition of Discharge, which marks the completion of your duties.

​​Disclaimer: This content is for informational purposes only, and does not constitute legal advice nor create an attorney-client relationship with Bequest Law.

Death & Taxes: What You Need to Know About Filing Taxes for the Decedent

Nothing is certain except for death and taxes.

Benjamin Franklin wrote those famous words to a French politician friend in 1789 shortly after the U.S. Constitution was signed, but the sentiment had been around for many years prior.

Most people don’t realize that you may still have to file taxes after you die — a task that falls on the executor or administrator of your estate, or the trustee of your trust.

Because federal and state tax laws are constantly changing and can be complex, it’s essential to work with an experienced estate planning attorney and CPA to ensure that you file the correct forms and properly prepare the filings.

Errors in estate and trust tax filings can be costly, and can reduce the amount of money that your heirs and loved ones receive.

If you are serving as the executor or administrator of an estate, you will probably need to obtain an estate tax identification number, called an Employer Identification Number or EIN,  for the estate. You may also need to open an estate bank account. 

If there was income of more than $600 after the death — from a final paycheck, or interest earned on investment accounts — you will also need to file an income tax return for the estate. 

You may also need to make sure that the decedent’s final tax return is filed. 

If the decedent made large gifts before their death, you may need to file a gift tax return or other related filings.

If the decedent owned a business or held stock in a business, you may need to file additional tax returns for those business holdings.

There may be outstanding tax matters from previous years that you will need to clear up, such as back taxes owed or penalty payments, and a CPA and attorney can help you navigate and resolve those issues.

Often, there are other tax matters such as sales tax on the disposition or liquidation of assets such as a car or boat, capital gains taxes, and other tax implications related to the administration of the estate that a CPA and attorney can help you address.

Having an estate plan in place ahead of time is vital. An attorney who specializes in estate planning can help you determine the most tax advantageous ways to preserve your wealth for your heirs and loved ones. 

Disclaimer: This content is for informational purposes only, and does not constitute legal advice nor create an attorney-client relationship with Bequest Law.

Administering an Estate: Which Expenses are Covered, and Which Aren’t?

When you accept the duty of serving as executor or administrator of an estate, you must also understand which expenses can be reimbursed from the estate.

Often, family members or heirs have to pay out-of-pocket for expenses that would otherwise be the responsibility of the decedent, such as:

• Funeral expenses

• Burial or cremation

• Legal fees and CPA fees

• Court filing fees

• Mortgage payments made when estate funds weren’t available

• Maintenance or repairs to assets, such as replacement of a broken air conditioning unit

All of these costs can typically be reimbursed by the estate.

It’s important to keep receipts and careful records of expenses, so that you can show them to the court or to heirs.

Other items can’t be reimbursed from the estate, such as costs for a vacation or leisure activities during a trip that was primarily made to administer the estate.

The administrator or executor is also entitled to compensation for their time and work in fulfilling those duties, and those payments are made from the estate.

Sometimes the decedent specifies a payment amount or hourly rate in their will. 

If no rate is specified in a will, Georgia estate law allows for a certain commission based on the amount of money brought into the estate and the money paid or distributed out of the estate. An executor or administrator may need to get court approval before paying him/herself.

Often, the executor or administrator is also a beneficiary of the estate, and it’s important to keep those two roles separate.

Understanding which expenses are reimbursable helps minimize confusion and disputes. An attorney who specializes in estate planning and probate law can help you and other beneficiaries handle the paperwork for proper expense reimbursements. 

Disclaimer: This content is for informational purposes only, and does not constitute legal advice nor create an attorney-client relationship with Bequest Law.

So You’ve Been Appointed Executor or Administrator of an Estate. Now What?

Being appointed administrator or executor of an estate is a serious job that requires patience, organizational skills and persistence. 

Many people quickly become overwhelmed, or simply don’t know where to begin. 

It’s important to work with a knowledgeable attorney who specializes in probate and estate administration so you don’t make mistakes that are more costly and difficult to straighten out later. Serving as executor or administrator can expose you to personal liability for any losses suffered if you fail to properly administer the estate.

There are six distinct phases of estate administration. Here is a high-level overview of each phase, along with some tips about how to navigate each stage and pitfalls to avoid:

1. Petition the court to be appointed executor or administrator and issue letters.

When someone dies, whether there is a will or no will, the courts must legally assign the role of executor or administrator. You must determine the heirs of the decedent, and hopefully all parties can agree on who should be identified as the executor or administrator. A petition is filed with the probate court, and the executor or administrator will swear under oath to perform their duties as the law specifies. 

When the court grants your petition, it will issue either letters testamentary for an executor or letters of administration for an administrator, which you will provide to various banks, creditors and other parties that conduct business with the estate. If there isn’t a will, you may need to post a bond that functions as an insurance policy to cover expenses while the estate is being handled. 

As the executor or administrator, you will be entitled to compensation from the estate for the time you spend on this work. You can also get reimbursement for certain expenses such as funeral, burial or cremation costs; attorney fees; CPA fees; and court fees.

2. Identify and gather assets.

Now it’s time to marshall all of the assets of the estate, including bank accounts, real property such as a house or vacation homes, cars, boats, jewelry, artwork, etc. You must also take control and responsibility for all of the decedent’s accounts, such as property tax bills, utilities, cell phone, etc.

You may need to create an inventory that values each item, and it’s important that you create the inventory the way that the courts require. You may also need to get a special tax identification number for the estate, and open a special estate banking account. 

Be aware that the beneficiary designations on certain accounts such as a 401(k) or life insurance policy will pass most likely outside of probate. However, any accounts of this nature without named beneficiaries can become part of the decedent’s estate.

3. Identify and pay debts.

There is a prescribed method and order for which debts get paid by the estate. You’ll publish a notice to debtors and creditors in the newspaper, and it must run for a specific amount of time and contain specific language that an experienced probate attorney can write for you.

At this stage, there is often confusion about how and when to pay debts and in what order. Avoid making payments personally; that’s the job of the estate. Consult an attorney about the order of payment.  Also be aware that many debts are negotiable, and an experienced attorney can help you negotiate a lower payoff amount with creditors. You are also entitled to reimburse yourself for estate expenses paid out of pocket. 

4. File taxes.

You will need to file estate tax returns, and an experienced CPA can help you with these forms. You will probably also need to file income tax returns for the decedent if any income such as a last paycheck was issued after their death or if a certain amount of interest was earned. 

5. Distribute remaining estate assets.

Once all debts have been paid, you are entitled to pay yourself for your work as personal representative.  You will need to follow the statutory guidelines for appropriate compensation.

If there is still money in the estate, you will distribute it as stipulated by the will or the law. You may also need to sell or liquidate assets. Avoid making any handshake agreements or verbal promises to anyone about how the estate assets will be divided up. Oftentimes, extended family members or other close friends think they have leverage or a claim on the estate assets when, in fact, they do not. The law is very clear about inheritance, and how much goes to surviving spouses, children, parents and other potential heirs. 

6. Petition for discharge.

When all matters of the estate have been concluded, you will close the estate file through a Petition of Discharge. This will be your final duty as executor or administrator.

There are many other considerations when serving as executor or administrator of an estate, such as having a plan for the digital assets of the decedent. What happens to their email, digital photos, social media accounts, files stored in the cloud, and other electronic records? Estate planning attorneys often work with end of life concierge services such as Black Dress Consultants to help people plan for and handle the logistics and administration of their legacy.

Another pitfall to avoid is letting your will and estate plan become outdated, especially when major life events occur such as marriage, divorce and the birth of children. Update your will and estate plan periodically so your loved ones know your exact wishes and how you would like your assets distributed when you die.

Clear estate plans make it easier for your heirs and loved ones to handle your affairs, and it can reduce the stress of administering your estate.

Disclaimer: This content is for informational purposes only, and does not constitute legal advice nor create an attorney-client relationship with Bequest Law.

Five Things You Can do NOW to Make Probate Easier Later:

Probate is the process of having your Will proved to the court after you die and involves gathering together all of your assets and distributing them to your beneficiaries. Probate can be time consuming and inevitably involves the court system but can be made easier by following these simple steps:

1. Add “transfer on death” forms for your bank and brokerage accounts.

If you know who you would like to inherit your bank or brokerage accounts, contact your financial institution about setting up a “pay on death” or a “transfer on death” form for that account.  That way, your beneficiary can access the money right after you die without having to wait on probate.

If you live in Georgia and hold an account jointly with someone - like your spouse - that person will automatically inherit what is in your bank account.

2. Do NOT keep your original Will in your safe deposit box!

Unless your Executor is jointly listed with you on your safe deposit box, do not keep your original Will inside. Most, if not all, banks will not let someone into your safe deposit box after you die unless he or she has been appointed by the court as your Executor. That person cannot (or will have a harder time) getting appointed unless he or she has your Will, which creates a catch-22 scenario of needing the Will to get into the box when the Will itself is inside the box.

Consider a fireproof safe instead - and let your Executor know how to get into it!

3. Make sure your deed with your spouse says “joint tenants with right of survivorship.”

In Georgia, if you want your spouse to inherit your half of your house after you die, make it easier by confirming that your deed includes the words “joint tenants with right of survivorship.” Without these words, even your spouse will have to probate your half of the house (and he or she may not ultimately inherit it).

4. Tell your Executor what your assets are (and consolidate your accounts).

Executors and family members spend the most time after a loved one’s death trying to sort out bank, brokerage, retirement, and life insurance information. Why not make things easier on them by letting your family know where your money is now (or how to find out once you die)?

While you are at it, consider closing a few bank accounts and rolling over old retirement accounts. Every financial institution has its own rules on how to close accounts after death, and banking with many different banks now will make your Executor’s job much harder later. 

5. Make sure your Will was signed properly.

Most importantly: make sure you have a properly executed Will because if it is not signed correctly, it is not a valid Will. In Georgia, your Will was properly executed, i.e. signed, if:

1. You had the proper “capacity” to sign it.

   1. You were over the age of 14 when you signed it, 

   2. You understood (generally) what property you own, 

   3. You understood who you were leaving that property to, and

   4. You understood who your family members were at the time.

2. You were not pressured or coerced into signing it.

3. It is in writing.

4. It was signed by you.

5. It was “properly witnessed” by two non-beneficiaries over the age of 14, who watched you sign it and then signed themselves as witnesses.

6. It includes a “Self-Proving Affidavit.”

   1. This is not technically required, but without it, probate will be far more time consuming and expensive.

   2. The Self-Proving Affidavit needs to be signed by two witnesses and stamped by a notary. 

The “Secure Act” - What You Need to Know

Finance industry analysts and estate planners alike were surprised by the late December passage of the Setting Every Community Up for Retirement Enhancement, i.e. the SECURE Act. The Act goes into effect January 1, 2020, and is the most impactful retirement legislation of the past decade. The Act includes a number of changes, but here are the standouts:

• Increased age for required minimum distributions, “RMDs,” from retirement accounts from 70 ½ to 72 years of age.

• Non-spouse beneficiaries (other than an account holder’s minor child) of traditional IRAs and 401ks will now be required to withdraw the balance of the account within 10 years. This eliminates the “stretch” option for non-spouse designated beneficiaries who inherit a retirement account.

• Beneficiaries of traditional IRAs and 401ks who are both minors and children of the account holder must withdraw the balance of the account within 10 years of the date they reach the “age of majority.”

These changes may have significant implications for your estate planning, including the following:

• If your Trust or your Estate is a beneficiary of your traditional IRA or 401k, it may make sense to change this to an individual beneficiary instead. 

• It may make sense to add additional beneficiaries to your traditional IRAs and 401ks rather than make gifts to those individuals through your Will or Trust.

This is by no means an attempt to cover every provision of the Act, which can be read in its entirety here. If you have questions about how the Secure Act impacts your estate plan, email Amanda at hello@bequest.law and set up a time to talk to Kristen!

1. If a beneficiary is not considered a designated beneficiary, distributions must be taken by the fifth year following the account owner’s death. Common examples of beneficiaries that are not designated beneficiaries are charities and estates. See Treas. Reg. § 1.401(a)(9)-3, Q&A (4)(a)(2) and 1.401(a)(9)-5, Q&A (5)(b).

2.  This is not true for Roth IRAs, and in many cases, it may make sense to convert your traditional IRA to a Roth IRA in light of the new rules. Please plan to speak to a financial advisor about pros and cons of conversion.