OverviewThe estate is made up of various deceased Assets and Liabilities. To get a good understanding of these, you should start compiling all the known items in an inventory to:
- keep oversight of what makes up the estate;
- understand the size and value of the estate;
- provide the Beneficiaries an overview of the estate;
- prepare for Grant of Probate or Letters of Administration application;
- lodge a final tax return; and
- know how much will be distributed to Beneficiaries.
Download Assets & Liabilities Inventory: Our smart Estate Assets and Liabilities Spreadsheet allows you to capture all estate items to automatically calculate what forms part of the estate.
15.1 The Importance of the Estate Assets and Liabilities Spreadsheet
Before launching into this Step, it is important to understand why this part of the estate administration is so critical. As the Executor or Administrator administering the estate, you are responsible for accurately and truly reflecting the estate’s financial situation.
Imagine the situation where the estate is finalised, the known liabilities were paid, and the remainder is distributed to the Beneficiaries as inheritance. Now, after a few months it turns out that the deceased person had taken a loan and owes money that was not identified as a Liability during this process and a claim is made for the money to be repaid. As the Executor or Administrator, you are responsible to identify all assets and liabilities, and serve the necessary notices before distribution as described in this Process Guide. If you do not follow the steps outlined carefully, you may be personally liable to pay the debt if you cannot collect parts of the distributed inheritance back from the Beneficiaries.
The above case study should not discourage you about having taken on the role as Executor or Administrator. It aims to highlight how important it is to take the time needed to work through the deceased estate in careful detail and seeking experienced support when in doubt.
It will also be important to frequently communicate with the family of the deceased person and Beneficiaries to educate them, to receive as much information as possible, validate your findings and ensure there is agreement to avoid any disputes later.
Note: You will complete the Statement of Assets and Liabilities as you work through Steps 15 – 26 of this Process Guide. As you progress you will gain access to information privy to the Executor(s) and Administrator that will allow you to determine the estate’s assets, liabilities and value necessary to then finalise and distribute the estate.
15.2 Record Estate Assets
At this point it will be important to list all the assets you know of or think may exist. You will confirm each item and its exact value as you work through the following Steps, so it is fine not to be perfect at this stage.
The following are some key assets, to help you with investigating and compiling a complete inventory:
15.2.1 Home Contents
The most immediate step is to capture all contents in the home or in the last place of residence of the deceased person before clearing these, using the Home Contents & Personal Belongings Inventory. The Will (where available) may specify items that will be handed to certain Beneficiaries; you should take note of these as a priority.Especially, where you have identified possible conflict between Beneficiaries and you are concerned that someone will try to obtain possession over certain items, it is important to immediately take stock of all items including the following that may have a resell value:
- personal belongings
- pieces of art
- mobile phones
- white goods and other equipment (washing machine, dryer, fridge, dishwasher, kitchen aids, gardening equipment etc.)
- crockery and cutlery (especially if deemed of high monetary or sentimental value)
Some items may have great sentimental value to the family or individuals but do not have a resell value if sold. If this is the case, you should capture these items separately without a Dollar value.
Read Step 16 – Clear the Deceased Person’s Home or Residence for more detail about how to clear the home or residence and value contents.
15.2.2 Real Estate
In most estates, real estate and property make up the largest assets.
As you progress through the estate administration process you will value each asset including real estate. Take note of all known real estate in the inventory and follow Step 17 – Property Valuation for Deceased Estate & Arrange for Rent or Sale to complete the value in the inventory.
15.2.3 Rental Bonds and Nursing Home Deposits
If the deceased person rented a house or apartment, the rental bond refund should be requested. This is described in more detail in Step 16 – Clear the Deceased Person’s Home or Residence.
If the deceased person lived in a nursing or care home, it is likely that a deposit was paid at the beginning of the residency, which can be requested back. You should refer to the contract or contact the nursing or care home to understand how much was paid as a deposit and how to make the refund request. It is very likely that Grant of Probate or Letters of Administration will be needed by the nursing or care home to release the funds. This topic is further discussed in Step 27 – Apply for Grant of Probate or Letters of Administration.
15.2.4 VehiclesOnce the home contents are captured, it is also important to note all vehicles owned by the deceased. This may include:
- motor bikes;
- bicycles; and
- any other vehicles.
Read Step 18 – Value, Sell & Transfer a Deceased Person’s Car for more detail about how to deal with the car and other vehicles.
15.2.5 Cash and Other Assets
As you progress through the estate administration process you will request final bank statements from all the banks you have notified in Step 12 – Notify the Relevant Government Departments, Companies and Organisations. Read Step 19 – Deal with a Deceased Person’s Bank Accounts & Finances for more detail about how to deal with banks.
If you are aware of other assets, such as shares, bonds or other investments, you should note these in the inventory immediately and find about how to obtain a statement of the current holdings and value. Step 20 – Review Business Dealings, Trusts & Shares will discuss this in more detail.
15.2.6 Possible Claims
You may be able to make certain claims from insurance companies or other Organisations depending on the level of planning and cover put in place by the deceased person. You can enter some assumed items on the simplyEstate Assets & Liabilities Inventory that you can confirm as you work through the estate. Read Step 25 – Claim Insurance & Other Benefits for more detail about how to deal with insurance claims.
The deceased person may also be owed money or items lent to friends or relatives. It may be more difficult to get a complete picture of such situations. However, it may be worthwhile looking for large bank transactions out of the deceased person’s accounts once you get access to these as discussed in detail in Step 19 – Deal with a Deceased Person’s Bank Accounts & Finances.
15.3 Deceased Liabilities
As you progress through the estate administration process you will obtain final bank statements from all the banks you have notified in Step 12 – Notify the Relevant Government Departments, Companies and Organisations.All liabilities will need to be deducted from the assets to understand the total value of the deceased estate. Liabilities can be:
- bank loans;
- personal loans;
- credit card debts;
- unpaid bills; and
- any other form of obligation resulting in future claims.
The deceased person may also owe money or items borrowed from friends or relatives. It may be more difficult to get a complete picture of such items.
However, it may be worthwhile looking for large bank transactions into the deceased person’s accounts once you get access to bank statements as discussed in detail in Step 19 – Deal with a Deceased Person’s Bank Accounts & Finances to understand what may need to be listed under the liabilities.
Actions and Decisions to Complete Step Yourself
If you have decided to tackle this Step yourself after reading and understanding the above, you may want to:
- Download the simplyEstate Assets & Liabilities Inventory or create your own to capture all the deceased assets and liabilities;
- Take stock of all household items that may be sold and the approximate value
(see Step 15.2.1 above);
- Capture all items listed in the Will (where available) and identify these in the deceased person’s home or among the belongings
(see Step 15.2.1 above);
- Contact the nursing or care home for a copy of the contract to determine the size of the bond that will be repaid
(see Step 15.2.3 above);
- Capture all other Assets and Liabilities with an approximate Dollar or sentimental value
(see Step 15.2 and Step 15.3 above); and
- Keep updating the spreadsheet as you find new belongings, assets and liabilities as you work through the following steps.
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Cost & Effort
Reading: 15 mins
Completing: 2-4 hrs
Total: 2:15-4:15 hrs
Effort and cost are general estimates only and are based on the assumption that you complete this step without experienced support.
To find out how this Process Guide works, access the instructions here.
To find out what the capitalised words mean, access the glossary here.