One of the most important duties of an estate’s personal representative is to “marshal” estate assets to be included in the estate for distribution to the lawful beneficiaries, creditors, and other interested parties.  This basically means that when a new estate is opened, the personal representative is legally required to locate and take charge of any probate asset belonging to the deceased individual. The task can be daunting but is arguably the most important function of a personal representative. This article guides you through the process.

Locating Assets

The first step in the process typically involves searching many different places to look for information and whereabouts of the decedent’s property. Sometimes there will be a formal estate plan listing the assets, which needs to be updated to include any unlisted, after acquired property. Many times, you will be starting from scratch.  Your search should include:

• Reviewing the decedent’s mail such as monthly statements and other documents identifying assets
• Ordering and reviewing the Decedent’s credit reports
• Reviewing the decedent’s tax returns
• Reviewing records and other information stored in a personal computer,
• Searching storage locations such as a safety deposit box or a filing cabinet
• Interviewing beneficiaries and other individuals having a close relationship with the deceased, and
• Interviewing the Decedent’s professional advisors

Collecting Estate Assets

Once the Decedent’s assets are identified, the Executor/Administrator must then marshal (i.e., collect) them.  The Letters of Administration provide the personal representative with the authority to carry out this obligation.  It involves taking personal possession of tangible, personal property (e.g., jewelry, clothing, furniture, photographs, etc.), and safeguarding such assets from theft or damage.  Assets held in bank accounts, brokerage accounts, stocks, etc., are typically retitled in the name of the estate (one exception being retirement accounts) by opening a new account in the name of the estate.   Real property often remains titled in the Decedent’s name until the property is sold or distributed to the estate’s heirs/beneficiaries during the course of the probate proceeding.

Inventory and Appraisal

After marshaling all estate assets, the personal representative must then create a formal inventory and file a formal inventory with the court. This makes the court and the estate’s beneficiaries aware of exactly what property is part of the estate.

According to Probate Code §8800, the personal representative must file an Inventory and Appraisal within four months after the Letters Testamentary or Letters of Administration are issued. The Inventory and Appraisal includes all assets subject to probate.  Excluded property includes real property held in joint tenancy, bank accounts, retirement accounts, and life insurance policies with designated beneficiaries.

Real property assets are appraised by a “Probate Referee” who is appointed by the Court. The Probate Referee uses a fair market value on date of death to appraise the property and assign a value. Other assets such as financial institution accounts, life insurance and tangible personal property are valued by the personal representative using fair market value on date of death.

Potential Liability of Personal Representative

Personal representatives who neglect their obligation to marshal estate assets can be held personally liable to estate beneficiaries, heirs, and other interested parties. This is the main reason personal representatives usually need to post a bond as a condition of their appointment.

If you are a personal representative of an estate, Lynx Legal can assist you in your efforts to marshal estate assets and report them to the court and interested parties.  We can be reached at 888-441-2355 or [email protected].  Please contact us for a quote.  Our experienced professionals are standing by to take your order or answer any questions you may have about the process.