Ask the Probate JudgeóProbate Inventories
By Merri Rudd, appeared April 4, 2002, Albuquerque Journal, Business Outlook
Q: I'm debating with my husband whether to set up a living trust for our two adult children to avoid probate. Your article on the duties of the "personal representative" reinforces my desire to create a trust. Said person must "prepare an inventory and appraisal of the decedent's property within [a] three-month period." Is this an inventory down to the last toothpick? Please clarify what said inventory might include. K.A., Albuquerque
Reprinted with permission
A: Yes, within three months of his or her appointment by the court, a personal representative of an estate must prepare an inventory of the decedent's property. This inventory must list each item "with reasonable detail" and indicate the "estimated value as of the date of the decedentís death" of each item, along with any encumbrances on the property.
Hiring an appraiser to value the decedent's property is not always necessary, but the personal representative should calculate an estimated value during the probate proceeding. The personal representative should value the property as accurately as possible because of tax considerations, discussed below. This information will also be useful when the property is later sold or passed to beneficiaries.
New Mexico law says the inventory may (not required) be filed with the court, but must be given to any interested person who requests it.
Opinions vary as to what property the inventory should include. Many attorneys list only the property that is affected by the probate proceeding, the "probate estate." Some attorneys list all of the decedentís property, the "gross estate," but designate which is probate property and which is not. This is most often done when a dispute may arise and full disclosure of all of the decedentís property seems wise.
You do not have to list "twelve plates, 32 bath towels, 47 cans of peas" on the inventory. Most people lump together "household items" or "personal effects" with an approximate value. If the decedent owned valuable collectibles or artwork, then you would need to list each of those items separately.
Whoever manages the decedentís estate will need to distribute or dispose of the items in the house or apartment. Trustees or personal representatives accomplish this task by holding an estate sale, yard sale, family auction, or other means of disposing of the household items. Having a trust will not eliminate this time-consuming task.
Whether or not a probate is necessary, you must still determine the value of the decedent's gross estate for estate tax computation purposes. The personal representative should calculate the value of all of the decedent's property, including assets that pass through a court probate, as well as all other assets that pass outside of a probate. If the gross estateís value exceeds $1,000,000, estate tax may be due.
© 2002, Merri Rudd & Albuquerque Journal,
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