One of the most significant responsibilities you can receive from a deceased loved one is being the executor of their estate. As the estate representative, you have to account for the decedent’s personal assets and determine their value. You will also handle other duties, including filing taxes, paying off creditors, distributing assets, and preparing multiple filing for the probate court’s review. This piece focuses on how estate inventories work (form AOC-E-505).
What Is an Estate Inventory?
When you are appointed to become executor, an estate inventory needs to be filled out. An inventory in estate administration refers to a summary of all assets owned or partially owned by the decedent at the time of their death. The inventory provides values for each item at fair market value at the date of the decedent’s death. Notably, in North Carolina, form AOC-E-505 is a crucial document that you will use to carry out the inventory.
What Is the AOC-E-505 Form in the Estate Inventory, and How Do I Fill It?
The AOC-E-505 is a critical estate inventory form that every executor must file with the court within three months after being qualified as executor. The AOC-E-505 mandates you to provide details about the estate assets.
The AOC-E-505 form is broken up into the following parts:
“Part I” Property
Under this section, you have to fill in the details of the property you have obtained control over and is currently available to pay creditors. In a nutshell, the property falling under this section should not be controlled by other entities, for example, those properties with designated beneficiaries and the jointly owned accounts or property.
“Part I” property is further subdivided into the following subsections:
- Accounts in sole name of decedent section: This part is dedicated to details of bank accounts with no joint owner and no payable-on-death instructions. When filling this part, ensure you attach a bank statement or any other proof of the account’s balance that you gain control over.
- Joint accounts without a right of survivorship: The second subsection is titled “joint accounts without a right of survivorship.” Although such accounts are rare, they do exist. Some people typically create an account that doesn’t have a right of survivorship. A right of survivorship implies the survivor of the two owners assumes the ownership of the account outright when one of the owners dies. When dealing with a joint account without a right of survivorship, you must ascertain and include the deceased share of that joint account in the estate. It is also good practice to attach the balance of the account and the signature card from the bank that details the ownership of the account.
- Stocks and bonds owned without a right of survivorship: You will then move to the subsection that requires details of any stocks and bonds individually owned or jointly owned without a right of survivorship. When filling out this section, only include accounts that don’t have designated beneficiaries or those that don’t have additional owners with a right of survivorship. Ensure you attach adequate proof of the value and ownership of the account
- Cash and undeposited checks on hand: This part requires you to fill in all details about the decedent’s cash found around their residence and on their person. You should also fill in details about refund checks and other checks that had not been deposited at the time of their death. This part typically features a small space, and if you have a longer list of items to fill, reference it and attach the list. You should also attach copies of the checks into the inventory.
- All other personal property: This category is dedicated to the decedent’s business interests, tools, personal effects, vehicles, and any other item not real estate.
“Part II” Property Section
Part II property refers to property that can be added to the estate at a later date should a need arise to meet creditors’ debt after running out of Part I property. Part II property can include gifts made in anticipation of death, joint bank accounts with a right of survivorship, and accounts with designated beneficiaries.
The following are the subcategories of the Part II property section:
- Joint Accounts with Right of Survivorship: Under this section, fill in details of joint accounts with a right of survivorship. Make sure you append a signature card from the bank with a right of survivorship clearly stated. If the signature card is lost, use an alternate letter from the bank. You should also attach bank statements and any other evidence to prove the balance of the account.
- Stocks bonds, securities with the joint owner, or a right of survivorship: When filling out this section, ensure you attach enough proof showing how the account is registered as well as the current balance.
- Other personal property recoverable (G.S. 28A-15-10): This part covers tentative trusts in savings accounts for other persons or Totten Trusts. It also includes details about “gifts causa mortis.” These are gifts made in anticipation of death. You can use these gifts to pay off creditors if you establish that the decedent gave out too much that you can’t settle their estate. You should also include details of other jointly maintained bank accounts and accounts registered on the death form and aren’t captured in previous categories.
- Real Estate Except for Entireties Property, Life Estate, and Real Estate Willed to Estate: This is the final category of the AOC-E-505. It gathers fractional interests in co-owned property or individually owned real estate. However, it doesn’t include the following:
- Property owned by a husband and wife as a marital unit if the other spouse is still living
- Property in which the person held a life estate that expires at their death
- Property willed to the estate (this property is typically listed in Part I).
Our Estate Litigation Team Can Help
Filling out the AOC-E-505 form can be overwhelming. Each state has its own approach towards the estate inventory process with various forms and timelines. If you suspect an executor has acted improperly in filling out the AOC-E-505 form or in other duties as executor of the estate of someone you care about, Fiduciary Litigation Group can help – contact us today to schedule a consultation!