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Inventory of Assets

Also known as: Asset List, Estate Inventory

Definition

An inventory of assets is a comprehensive list of all property, possessions, and debts owned by the deceased at the time of death, with each item valued, which executors are legally required to create.

This date-of-death snapshot forms the foundation for probate applications, inheritance tax calculations, and proper estate distribution to beneficiaries.

What Is an Inventory of Assets?

Under section 25 of the Administration of Estates Act 1925, personal representatives (executors or administrators) have a legal duty to create a full inventory of the deceased's estate. This inventory is a comprehensive list documenting everything the deceased owned at the exact moment of death, along with the value of each item on that date. It must include all real estate (property and land), personal possessions (cars, jewellery, furniture, collectibles), financial assets (bank accounts, investments, pensions, life insurance policies), business interests, and all outstanding debts and liabilities (mortgages, loans, credit card balances, utility bills).

Creating an inventory involves methodical detective work. The executor must contact every financial institution—banks, building societies, pension providers, insurance companies—to obtain exact balances as of the date of death. Property requires professional valuations from estate agents or chartered surveyors showing market value. For personal possessions, the executor lists household items (usually grouped as "household contents" unless particularly valuable), vehicles (using industry valuation guides), and valuables like jewellery, art, or antiques requiring professional valuers. Sarah's executor found three bank accounts totaling £45,000, plus an ISA worth £12,000, and obtained professional valuations for her engagement ring (£8,500) and her father's coin collection (£3,200).

One major challenge is discovering hidden assets. Billions of pounds sit unclaimed in the UK from forgotten bank accounts, lost pensions, and unclaimed Premium Bonds. Executors must check the Unclaimed Assets Register, review old paperwork thoroughly, and speak with family members about potential assets. HMRC reports that missing or undervalued assets are the leading cause of inheritance tax penalties, making thorough searching essential. The completed inventory directly feeds into the IHT400 form for inheritance tax calculation and the probate application.

Beneficiaries have specific legal rights regarding the inventory. Under section 25 of the Administration of Estates Act 1925, residuary beneficiaries (those entitled to a share of what remains after specific gifts and debts) can request to see the full inventory and estate accounts. The court's discretion to refuse such requests is very limited, as confirmed in the case Ali v Taj [2020]. Specific beneficiaries (those receiving particular items or fixed sums) generally cannot see the full inventory, though exceptions exist. It's important to distinguish the inventory from estate accounts: the inventory is a date-of-death snapshot showing what existed when the person died, while estate accounts are the complete financial record tracking all transactions from death through final distribution. A thorough, accurate inventory protects executors by documenting they've fulfilled their statutory duty and handled the estate properly.

Common Questions

"When does an executor need to create an inventory of assets?" An executor must create an inventory of assets as soon as possible after someone dies, listing all property, possessions, and debts at the date of death with valuations. This inventory is required by law under section 25 of the Administration of Estates Act 1925 and forms the basis for probate applications and inheritance tax calculations.

"What's the difference between an inventory of assets and estate accounts?" An inventory of assets is a snapshot listing everything the deceased owned at the date of death with values. Estate accounts are a comprehensive financial record covering the entire administration period, showing all income received, expenses paid, and distributions made from death until final settlement. The inventory is the starting point; estate accounts are the complete journey.

"Can beneficiaries request to see the inventory of assets?" Residuary beneficiaries have a legal right to see both the inventory of assets and full estate accounts upon request. Other beneficiaries receiving specific gifts generally cannot see the full inventory, though they're entitled to know what they've been left. Beneficiaries can apply to court under section 25 of the Administration of Estates Act 1925 if executors refuse to provide required information.

Common Misconceptions

Myth: The inventory of assets is only needed if the estate is worth over £325,000 for inheritance tax.

Reality: All estates require an inventory of assets regardless of value. While estates below the £325,000 nil-rate band may not owe inheritance tax, executors still have a statutory duty under section 25 of the Administration of Estates Act 1925 to create a full inventory when required by the court or beneficiaries. The inventory is essential for probate applications, protecting executors from claims, and ensuring proper distribution.

Myth: Once I create the initial inventory at death, I don't need to update it during estate administration.

Reality: While the inventory captures asset values at the date of death, executors must maintain detailed ongoing records throughout administration. Estate accounts (distinct from the initial inventory) track all transactions from death to final settlement. Additionally, if new assets are discovered after creating the initial inventory, it must be updated to reflect the complete estate.

  • Estate Administration: The inventory of assets is one of the first essential steps in the broader estate administration process.
  • Valuation: Each asset in the inventory requires accurate valuation at the date of death using appropriate professional methods.
  • Executor: Creating a comprehensive inventory of assets is one of the executor's primary legal duties under the Administration of Estates Act 1925.
  • Estate Accounts: While the inventory captures what existed at death, estate accounts track all transactions throughout the administration period.
  • Probate: The inventory of assets provides the asset values required for your probate application and determines whether full probate is needed.
  • Administrator: When there's no will, the administrator has the same duty to create a comprehensive inventory as an executor would.
  • IHT400: The inheritance tax form where inventory information is reported for taxable estates over the nil-rate band.
  • Assets: The general term for all property, possessions, and financial holdings that must be included in the inventory.

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Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.