Executor Duties Checklist: Taking Inventory

This is the fifth of a series on the duties of an executor. Think of it like a checklist, with everything an executor needs to take care of. To make this list as comprehensive as possible, we’ve divided the series into 12 parts.

To view the series in its entirety, follow this guide:

Part 1: Handling Immediate Matters
Part 2: Gathering Documents and Funeral Planning
Part 3: Notifying Accounts and Collecting Information
Part 4: Tying Up Loose Ends
Part 5: Taking Inventory
Part 6: Decisions Regarding the Estate
Part 7: Administrative Duties
Part 8: Applying for Benefits (For Spouses/Beneficiaries)
Part 9: Managing the Trust Account (If Applicable)
Part 10: Distributing Assets
Part 11: Filing Taxes
Part 12: Finalizing the Estate

There’s often a perception that the only role of the executor is to administer the will and divvy up assets to beneficiaries.

This checklist alone proves how much more there is to being an executor than handing out money and family heirlooms. That is, of course, a part of an executor’s role. But, before that can even happen, the executor needs to take stock of everything - and assess its value.

Calculate debts

Calculating debts when someone dies goes beyond just paying their outstanding tax bill.

The first thing you should do is request a credit report. This can help you uncover any outstanding debts. If your loved one worked with an accountant or other financial advisor with intimate knowledge of their finances, they should also be contacted to help uncover any loans or investments.

You should also comb through all of the tax records, bills and documents for your loved one looking for bills that might have an upcoming charge. For example, a yearly contract with a lawn care company that requires payments in quarterly installments.

Debt and money owing can be hidden in numerous places. Here are some of the most common debts to look out for:

Income taxes
Mortgages
Insurance premiums
Credit cards
Home service providers (gas companies, lawn care providers, etc…)
Subscription services
Utility providers
Lines of credit
Car loans
Retail debts
Etc…

Who is responsible for paying debts?

First and foremost, the estate of the deceased is responsible for all debts. It’s up to the executor to ensure those debts are paid - and the funds come from the estate and not the executor’s pocket.

There are a few cases where another person may be responsible for paying the debt of a person who has died, like:

The co-signer of a loan. In this case, the debt becomes theirs
A joint credit card account owner.
If state laws apply to the spouse for particular types of debt (depending on where you live).
States where spouses are required to pay debts with jointly owned property.

Determining investments, pensions and policies

Much like calculating debts, you also need to tally up all investments. This can mean a lot of legwork to ensure everything is accounted for.

This is when you will also need to consult tax records and financial advisors for your loved one to organize all of their investments.

Investments means more than just stocks and retirement plans. Here is everything that might be considered an investment:

Home
Vacation property, cottage or timeshare
Other real estate investments, like land or development
Vehicles
Stocks/Bonds
Cryptocurrency
Savings accounts
Mutual funds and EFTs
RRSP and TFSAs (Canada)
401K (USA)
Employment benefit plans
Art and jewelry

Evaluating cash requirements

Debt, unfortunately, stays even after someone is gone.

That means outstanding balances still need to be paid - by whatever financial resources are on hand. If debts exceed available funds, it may be time to look at other investments to see what might need to be sold in order to pay for debts.

This might mean selling property, like homes, or selling household items of value.

If the estate doesn’t have enough funds or valuable assets to pay for debts, including taxes owing, it may be time to look at other options. If the estate needs to declare bankruptcy, there are Licensed Insolvency Trustees (LIT) who can help. It is their job to work with creditors and help remove the financial burden on surviving family members.

Take control and valuating physical assets

Unfortunately, it’s fairly common when someone dies - especially when people will be coming and going from the home - for family members to “help themselves” to cash and items they believe are owed to them.

As an executor, your job is to take control of any and all assets to ensure this doesn’t happen.

It’s especially important in the case of items of value, like jewelry, art and collectables, which can easily be taken.

You need to take inventory of all of the assets of value, both in the home and in various investments. Take items to a secure location, or ensure no one is able to access them in the home.

For items like jewelry, antiques and art, you might need to work with an appraiser. These are professionals who are able to accurately determine the monetary value of household items. They might even be able to uncover things you didn’t know were valuable!

Funds for hiring the appraiser can come from the estate - just be sure to keep a record of expenses as you go. Be sure to keep records of appraisals that include the appraisers analysis and estimated value.

Take control of accounts

Unlike antiques and artwork, it’s a lot easier to tell how much money is in an account or in the stock market.

But, like the items above, you still need to secure these accounts and ensure they are transferred from the deceased to the estate.

In most cases, investments can be transferred to the executor. Then, from there, the executor can transfer accounts to the beneficiaries. There may also be investment accounts with designated beneficiaries, in which case those accounts can pass easily to the listed beneficiary.

Understanding account value

Investments, especially those like stocks, mutual funds and EFTs, can fluctuate in value. It’s not as simple as looking at the number of shares and determining cost based on market value.

A financial expert, like an accountant or advisor, can take stock of all investments and assess the value of an entire portfolio.

There can be fees that apply - and taxes that apply - when it comes to transferring or withdrawing these investments. That’s why it’s essential to work with an accountant to ensure you’re able to make the smartest possible decisions when it comes to getting these investments to their beneficiaries - while following the law. In Canada, probate taxes apply when the will goes through the probate court. In the United States, there is an Estate Tax that applies when estates are transferred and are based on the total value of assets.

An RRSP or RRIF can be transferred tax-free to the surviving spouse. These same accounts can also be transferred tax-free to a financially-dependent child or grandchild who is under age 18, or who is unable to take care of themselves due to physical or mental state.

Seeking out a professional opinion to valuate investment accounts and help you navigate potential taxes and fees can ease the burden of making sure every transaction is done properly.

Next in the Executor Duties Checklist, making decisions regarding the estate.