An estate inventory is more than a list of things in the house. It is a dated map of property, ownership, and value that supports probate reporting, tax basis, insurance decisions, sales, and final distribution.
Build it from documents and physical inspection together. A spreadsheet can track the estate, but each important number should point to evidence: a statement, appraisal, market quote, vehicle valuation, deed, or photograph.
Record ownership before recording value
For each asset, write the legal owner or account registration on the date of death. Mark whether it is probate property, jointly owned, beneficiary-designated, trust-owned, or still uncertain. The probate court's inventory may exclude assets that pass outside probate, while federal estate-tax or basis work can require a broader picture. Do not assume one list serves every legal purpose.
For financial accounts, save the statement that brackets the date of death and ask the institution for a date-of-death value when available. For publicly traded securities, the tax valuation method can depend on market prices and special rules; a brokerage estate unit or tax preparer can provide the correct figures.
For real estate, save the deed, tax parcel information, mortgage balance separately, and evidence of fair market value. Value and debt are not the same number.
Fair market value on the death date has a tax life beyond probate
IRS Publication 551 states the general rule that inherited property's basis is fair market value at the date of death, subject to exceptions such as an elected alternate valuation date and consistency rules when a federal estate-tax return applies. That makes a credible date-of-death value important even for estates far below the federal estate-tax threshold.
Suppose a home was bought decades ago for $120,000 and was worth $400,000 when the owner died. If the estate or beneficiary later sells near $410,000, a properly supported inherited basis may make the post-death gain roughly $10,000 before selling costs and adjustments rather than treating the entire $290,000 lifetime appreciation as the heir's gain.
The example is conceptual. Community-property rules, improvements, alternate valuation, and other tax facts can change the calculation.
Use an appraiser when opinion risk is more expensive than the fee
The appraiser should be independent of a buyer who profits from a low number. For a proposed sale to an executor, beneficiary, or relative, independent valuation is especially important because a fiduciary must be able to show that the estate received fair treatment.
| Asset | Often enough for a first inventory | When professional valuation becomes useful |
|---|---|---|
| Bank cash | Date-of-death statement | Rarely needs appraisal |
| Public stocks | Broker date-of-death valuation | Complex holdings or missing records |
| House/land | Broker opinion may help planning | Tax basis, court sale, dispute, unusual property |
| Jewelry/art/collectibles | Photos and purchase records | High value, specialty market, family dispute |
| Closely held business | Financial statements | Buyout, tax reporting, succession dispute |
| Vehicle | Title and market guides | Rare/collector vehicle or contested value |
Household contents need proportionate effort
Do not spend $4,000 appraising ordinary furniture worth a fraction of that amount. Photograph rooms, identify items with meaningful resale or sentimental value, and use a reasonable method for the remainder that satisfies local probate reporting. Antique collections, precious metals, firearms, designer goods, and specialized equipment deserve separate attention when the amounts are material.
Create item IDs for valuables and tie them to photos. If an item is later distributed in kind, record the recipient and the value used for accounting. If it is sold, keep the bill of sale, marketplace statement, auction settlement, or dealer receipt.
When heirs dispute a particular object, remove that item from informal sorting and obtain a neutral value before anyone offsets it against another person's share.
A defensible inventory tells a reviewer where every number came from
If the probate court has a mandatory inventory form or filing deadline, use that form and calendar the deadline. The private master inventory can be more detailed than the version filed publicly. Protect full account numbers and sensitive identity information from unnecessary public filing.
- Asset description and account or parcel identifier.
- Ownership form at death and whether it is included in probate.
- Date-of-death fair market value or the valuation method required for that report.
- Debt or lien listed separately rather than netted invisibly.
- Source document, appraiser, statement date, or market evidence.
- Later disposition: retained, transferred, sold, abandoned, or distributed in kind.
Inventory row: “Maple Street residence — sole title — probate asset — DOD FMV $412,000 per 9/18 certified appraisal — mortgage $96,430 listed separately — insured vacant dwelling.”
Freeze a date-of-death snapshot before values drift
Number the inventory items so the same identifier follows an asset from discovery to appraisal to sale or distribution. For a home, the folder might hold the deed, date-of-death appraisal, insurance declaration, repair invoices, listing agreement, and closing statement; for a brokerage account, statements can perform much of the valuation work.
When an estimate is provisional, label it that way. An executor who writes '$25,000 jewelry' from memory and later obtains a $7,500 appraisal should preserve both the preliminary note and the qualified valuation, with a short explanation of why the inventory was updated if the court permits an amendment.
For each material asset, store the statement, appraisal, market quotation, photo set, or other valuation support that belongs to the date-of-death number. Add a second column for later sale or distribution value rather than overwriting the original figure; the difference can matter for accounting, tax basis, and explaining results to beneficiaries.
Valuation decisions that need evidence
Do I need an appraisal for every item?
No. Use effort proportional to value, tax significance, court requirements, and dispute risk. Cash and ordinary household goods can often be documented without a formal appraisal, while real estate, businesses, art, or contested high-value items often justify one.
Why does date-of-death value matter if no estate tax is due?
Inherited basis can depend on fair market value at death. A later sale may be taxed on post-death appreciation rather than all appreciation during the decedent’s lifetime, subject to the tax rules and any applicable exceptions.
Should I subtract the mortgage when listing the house value?
Keep fair market value and debt as separate data points unless the specific probate form instructs otherwise. The market value describes the asset; the mortgage is a liability or lien. Netting them too early can hide information needed for tax or court reporting.
Can the real-estate agent’s suggested list price be the appraisal?
It may be useful planning evidence, but a list-price opinion is not always the valuation support a court, tax preparer, or disputing beneficiary will accept. For material basis or fiduciary questions, ask whether an independent date-of-death appraisal is appropriate.