If you have a parent who has chosen you to serve as the executor of his or her estate, you are probably wondering how you will handle such an important job when the time comes. Given that taking inventory of an estate is an important duty of an executor, you should consider how to organize the possessions your parent owns.
Estates differ from person to person. Still, just about any estate will have certain kinds of assets. Smart Asset breaks down asset types into common categories.
The tangible property your parent owns can consist of property like the house your parent lives in and any vehicles owned by your parent. Physical property also includes ordinary household items like furniture, kitchenware, clothing, appliances, and home media. Also, your parent may own collectibles and heirlooms which have great value.
Different kinds of property can qualify as financial assets. Common types include checking and savings accounts. Your parent may also have CDs, pensions, insurance policies, or personal investment accounts. Some people also possess financial interests such as real estate or ownership in a business.
It is important to account for any debts owed by your parent since creditors may file claims against the estate to collect on them. Your parent might have outstanding amounts on a home mortgage or a vehicle loan. Other liabilities can include unpaid taxes, student loans, medical bills, and credit card bills.
Items ineligible for probate
Some assets do not pass through probate. Your parent may share ownership of a bank account with another person or may have established a payment-on-death provision that pays out the account to a beneficiary. Your parent could have also named beneficiaries on life insurance policies or retirement accounts. In general, an asset with a beneficiary designation will not be eligible for probate.
While administering an estate may seem like a daunting task, some basic organization of the estate assets can do a lot to simplify the process.