Taking an inventory of your personal property now can save a lot of grief later
Posted June 11, 2009
Being an executor of an estate is a responsibility few really hope for, but one that normally is not declined. You've most likely chosen one of your adult children to serve in this capacity for your estate. Have you considered what you can do to make this easier on them?
One responsibility they will face is to compile an inventory of the estate's assets. Consider how emotionally difficult this will be for him or her and your other children as they prepare this document. Emotions aside, they will also need to find the time to document the items and assign a fair market value to each.
Creating an inventory of your personal property now will ease this process for them upon your death. Create a list of your belongings, including manufacturer, model and serial numbers, date purchased and cost. As you purchase new items and discard old, make sure you update your report. The holiday season is a time that will be easy to remember. You will have just received new items to add to your list, and probably have discarded some old ones as well. Additionally, you'll have your camera out taking pictures, so it will be little extra work to take photos of your new belongings.
On your written report, include a column that indicates who you want to receive specific items, as this will communicate your intentions to your family. This simple gesture can eliminate discourse and hard feelings. We've inventoried estates and have seen many families fighting—or worse, not talking at all—due to not agreeing on who should have what.
My oldest granddaughter's name is written next to my diamond earrings. When I die, I want to make sure she receives them. If I ever change my mind, all I need to do is initial and date the new entry.
The value of this documentation is knowing that you'll be able to maximize your insurance claim if you have a fire, theft or natural disaster. This is because you'll always know what was in your home. Without an inventory, it would be impossible to remember everything you own(ed) and prove it to your insurance company. As a result, your settlement will most likely not be sufficient to replace everything. Victims state that they only recover about 30% to 50% of what they expected when they filed their claim.
If you cannot receive an adequate personal property insurance settlement, you'll most likely need to take money out of a savings or investment account to purchase the items not recovered. This might affect the value of your estate, reducing what you were hoping to pass on to your children, grandchildren, siblings or charities.
At your death, your executor will not have to worry about providing an inventory—you have already taken care of it. The only change necessary will be changing replacement value to fair market value. And that will be a very small task compared to compiling the entire inventory.
If the task of creating an inventory is one you don't want to tackle, there are professional inventory service providers who will compile a professional report for you. Many will remind you of your annual renewal and also maintain your record on line for safekeeping and immediate access.
Whether you are elderly or just entering your adult life, an inventory is a living document that you should have prepared. For now, to ensure a maximized insurance claim. And for later, to ease the stress your children will face. Bottom line, do it for your kids!
Cindy Hartman is President of Hartman Inventory LLC, a woman-owned business that provides business and home inventory services. This documentation is essential for estate planning, estate settlement, financial plannine, disaster recovery and more. She and her husband Mike also own Hartman Inventory Systems LLC, a company that provides a complete turnkey inventory business package for those who want to establish their own inventory company.