Making an inventory list before sitting down to draft your Last Will and Testament will help ensure you include all of your property in your estate plan. This inventory is nothing more than a list of your important possessions that you want to give away when you die.
For simplicity’s sake, you should limit your inventory list to only large, valuable, or sentimental items; small, personal belongings like clothes, pillows, or linens may be omitted unless you prefer to make a specific gift of the item. These personal belongings may be disposed of with what is called a residual clause, which specifies a recipient (or beneficiary) for anything you own that is not named in the will.
Any real estate you own, including buildings and land, should be listed individually in your inventory. Include an approximate value of each piece of property so that you better understand the value of each of the dispositions in your will. This helps you keep your gifts equal among your beneficiaries — if this is a goal of yours.
If any liabilities are attached to the property, list them as well. For instance, a mortgage, lien, or other long-term debt will diminish the value of the property. You should take this into account when deciding who should receive what.
Jewelry, Vehicles, and Other Valuable Personal Property
Anything that is valuable or carries sentimental weight should also be listed in your inventory. You may decide to bequeath all of your jewelry to one person, or you may give each piece to an individual beneficiary. Your decision on this will be reflected in your inventory list.
The same is also true of vehicles and anything else of value. Family heirlooms, even if they are not particularly expensive, should also be included. Remember that everything you don’t list will be included in your will’s residuary clause; if you want to have precise control over who receives a particular item, make sure it is included in your inventory.
Any checking, savings, or other money account becomes part of your estate just like any other property you own. Accounts with an already named beneficiary — such as a life insurance policy — will pass as a matter of law without needing to be included in your will. However, it may be a good idea to include these accounts on your inventory list for your own personal information.
An inventory of all your financial accounts will give you a clearer picture of how much cash you have to bequest. Mistakes in calculating your liquid wealth could result in you giving away too much money in your will, which means some intended beneficiaries may end up with nothing. Remember that your estate will also have to pay some administrative expenses, so leave some cushion in your calculations.
Stocks, bonds, and interests in businesses should also appear on your inventory. Your ownership in a business is also just property, and it will pass to a beneficiary in the same way. Some businesses may have restrictions on how you may pass your ownership interest at death, and you should examine the business’s relevant documents to see if there is a provision covering the death of a business owner.
Once you are confident all of your property has been listed, your inventory is complete. Use this document to help you organize your will, figure out your dispositions, and calculate the value of your estate. In some states, this inventory may be used as a Memorandum of Personal Property and be attached to your will to provide specific instructions for your bequests.
Losing a loved one is difficult enough without all the additional legal hassles. Preparing the deceased’s estate may fall to you if you are named as the executor, and the court will assist you with your obligations if you are unsure of how to proceed. Though you should always rely on the assistance of your attorney or the probate court if you have any questions, the following is a general outline of the steps you must take when someone dies.