A probate inventory and appraisal is the sworn document the personal representative files with the probate court listing every asset the decedent owned individually at death, with each item described in enough detail to identify it and assigned a fair market value as of the date of death. It is the financial snapshot that drives every later decision in the estate: paying creditors, calculating taxes, and distributing what remains to beneficiaries. Getting it wrong exposes the executor to personal liability, so the inventory is usually the first major obligation of the role and the one that most directly protects or sinks the person who takes it on.
Which Assets Belong on the Inventory
Only probate assets go on the court inventory. These are things the decedent owned individually with no mechanism that transfers them automatically at death: real estate titled solely in the decedent’s name, personal property such as furniture and jewelry, vehicles, individual bank accounts, and stocks or bonds held outside a transfer-on-death arrangement.
Non-probate assets stay off the list because they pass by operation of law or contract. Joint tenancy property with a right of survivorship goes to the surviving co-owner. Accounts with payable-on-death or transfer-on-death designations go straight to the named beneficiary. Life insurance paid to a named beneficiary and anything already held inside a living trust bypass probate entirely.1Legal Information Institute. Non-Probate Assets
The distinction matters in both directions. Listing non-probate assets inflates the apparent estate and confuses beneficiaries; missing a probate asset gives the court an incomplete picture and sets up a supplemental filing later. When you aren’t sure, check the title document, the beneficiary designation on file with the institution, and any ownership agreement.
Digital Assets
Cryptocurrency wallets, online financial accounts, digital media libraries, loyalty points, and even email accounts can hold real monetary value, and they belong on the inventory if the decedent owned them individually with no beneficiary designation controlling transfer. Finding them is the hard part, because a crypto wallet leaves no paper trail unless you know where to look.
Most states have adopted the Revised Uniform Fiduciary Access to Digital Assets Act, which gives executors a legal framework for requesting access to a decedent’s accounts. Platform tools such as Google’s Inactive Account Manager or Facebook’s Legacy Contact come first. Authority granted in a will, trust, or power of attorney comes next. A court order is the last resort. Logging in with a password found in the decedent’s notes, without proper legal authority, can violate platform terms and potentially trigger liability under federal computer fraud laws.
How to Describe Each Asset
Each entry needs enough detail that the court and any interested party can verify what it is and that it belongs to the estate. Most courts provide a standardized “Inventory and Appraisal” form with separate attachments for different property categories, available through the local clerk or the judicial branch website.
- Real estate: use the full legal description from the most recent deed, not just the street address.
- Vehicles: record the VIN, make, model, year, and mileage. The VIN is the only truly unique identifier.
- Financial accounts: list the institution, account number, account type, and the balance as of the date of death. Request a date-of-death statement from each bank or brokerage.
- Business interests: identify the entity name, the decedent’s ownership percentage, and the type of entity. Gather operating agreements and corporate records early.
- Personal property: describe items specifically enough to distinguish them. “Gold bracelet with emerald stones” is useful; “jewelry” is not.
- Digital assets: include the platform, the type of asset, and whatever account identifiers you have.
How to Value Estate Assets
Every asset on the inventory needs a fair market value as of the date of death. Federal regulations define fair market value as the price the property would change hands for between a willing buyer and a willing seller, neither under pressure to act and both reasonably informed.2eCFR. 26 CFR 20.2031-1 – Definition of Gross Estate; Valuation of Property That is not what the decedent paid, not replacement cost, and not a fire-sale number.
The regulations get specific. An automobile is valued at the retail price a member of the public would pay for a comparable vehicle of the same make, model, year, and condition, not the lower wholesale price a dealer would offer.2eCFR. 26 CFR 20.2031-1 – Definition of Gross Estate; Valuation of Property
What the Personal Representative Can Value Alone
Executors are typically permitted to value cash and cash-equivalent assets themselves. Bank balances, money market funds, and uncashed checks have fixed dollar amounts. Publicly traded stocks and bonds can be valued using closing prices on the date of death, which are readily available through financial data services.
When You Need a Professional Appraiser
Many jurisdictions require a court-appointed appraiser or probate referee to value non-cash assets like real estate, collectibles, antiques, or business interests. In some states, the appraiser’s fee is set by statute as a percentage of the appraised value; in others, it is negotiated or set by the court. Specialized property such as fine art, intellectual property, or mineral rights may require a separate expert with credentials in that specific field.
Business Interests
A decedent’s stake in a private business is often the most complex asset to appraise, because there is no market price to look up. Professional appraisers evaluate the company’s net worth, earning potential, ability to pay dividends, the industry outlook, the quality of management, and goodwill. They may use income-based approaches, asset-based approaches, or a blend of both. Control matters: a 51% interest that controls the company is worth more per share than a 5% minority stake with no control.
The Alternate Valuation Date
If asset values drop significantly after death, the executor may elect to value the entire estate six months after the date of death instead. The alternate valuation is only available when it would reduce both the gross estate value and the total estate tax owed.3Office of the Law Revision Counsel. 26 USC 2032 – Alternate Valuation The election is made on the estate tax return and is irrevocable once made. Property sold or distributed before the six-month mark is valued as of the date it left the estate.
Filing the Inventory with the Court
Most states give the personal representative somewhere between 60 and 90 days after appointment to file the inventory, though timelines vary and some jurisdictions allow longer. The clock starts when the court issues letters testamentary or letters of administration, not at the date of death. Extensions are often granted for good cause, such as difficulty obtaining appraisals for complex assets. Missing the deadline without asking for more time can result in a citation from the court or, in serious cases, removal of the personal representative.
Once the court accepts the filing, the executor must give notice to heirs, beneficiaries, and creditors who have requested special notice. Those parties then have a window to object to specific valuations or to the inclusion or exclusion of particular assets. After that window closes, the inventory stands as the official record for the rest of the proceedings.
Probate inventories generally become part of the public court record, so anyone can review the detailed list of what the decedent owned and what it was worth. Some states keep the inventory confidential or allow filing with interested parties instead of the court. Privacy is one of the main reasons families use living trusts to avoid probate, since trust administration stays private.
When Assets Surface After the Filing
Finding additional assets after the original inventory is common, particularly with estates spread across multiple financial institutions, safe deposit boxes, or digital accounts. The personal representative has a legal duty to file a supplemental inventory identifying the newly discovered property and its fair market value as of the date of death. The same obligation applies if a value or description in the original filing turns out to be wrong or misleading.
A supplemental filing follows the same process as the original. Failing to update the inventory when new assets come to light exposes the executor to personal liability. Distributing to beneficiaries before all property has been accounted for is one of the most common and costly executor mistakes, because clawing back distributions to cover later debts or taxes is far harder than slowing down the first time.
How the Valuations Feed Federal Taxes
The numbers on the inventory flow directly into federal tax calculations, which is why valuation accuracy is not just a probate formality.
Estate Tax
For individuals dying in 2026, the federal estate tax applies only when the gross estate exceeds $15,000,000, a threshold set by legislation signed in July 2025 that amended the basic exclusion amount.4Internal Revenue Service. What’s New – Estate and Gift Tax Estates above that figure face a top marginal rate of 40%. The executor files IRS Form 706 within nine months of the date of death, with an automatic six-month extension available by filing Form 4768.5Internal Revenue Service. Instructions for Form 706 The gross estate reported on Form 706 is built directly from the inventory valuations, with each asset category getting its own schedule.
Portability of the Unused Exemption
When the first spouse dies with an estate well below the $15,000,000 threshold, the unused portion of the exemption can transfer to the surviving spouse, effectively doubling the couple’s combined exclusion. The transfer is not automatic. The executor must file Form 706 and make the portability election, even if no estate tax is owed.6Internal Revenue Service. Frequently Asked Questions on Estate Taxes Skipping the filing because the estate looks too small to worry about can forfeit millions in future tax protection for the surviving spouse. A simplified extension procedure is available for estates below the filing threshold, but it must be used within five years of the date of death.
Step-Up in Basis for Beneficiaries
For beneficiaries, the inventory valuation sets their tax basis in inherited property. Under federal law, the basis of property acquired from a decedent is generally its fair market value at the date of death, not what the decedent originally paid.7Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent If the decedent bought a house for $200,000 and it was worth $600,000 at death, the beneficiary’s basis is $600,000. Selling later for $620,000 generates only $20,000 in capital gains, not $420,000.
That cuts both ways. Undervaluing an asset to shrink estate tax exposure can backfire by giving beneficiaries a lower basis and larger capital gains when they sell. For estates required to file Form 706, the law requires that a beneficiary’s basis be consistent with the value reported on the estate tax return, and the executor must provide basis-reporting statements to both the IRS and each beneficiary.4Internal Revenue Service. What’s New – Estate and Gift Tax
Executor Liability and What Can Go Wrong
An executor who fails to identify assets, undervalues property, or files late can lose more than the appointment. Courts can void the executor’s actions, remove them from the role, or order them to personally compensate the estate for losses their errors caused. Conduct that crosses into theft or fraud carries criminal exposure.
Common pitfalls include letting property insurance lapse on estate assets, investing estate funds too aggressively or too conservatively, and distributing property before confirming all debts and taxes are paid. If the inventory reveals that debts exceed assets, the executor cannot pay creditors on a first-come basis: state law sets a priority order that generally runs administrative costs, funeral expenses, federal debts and taxes, state-preferred debts, and then general creditors, with beneficiaries receiving nothing until higher-priority claims are satisfied. Paying a lower-priority creditor ahead of a higher one, or paying heirs before debts, can make the executor personally liable for the difference.8Internal Revenue Service. IRM 5.17.13 – Insolvencies and Decedents’ Estates A thorough, honestly valued, timely filed inventory is the single best protection an executor has against later claims of mismanagement.