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GlossaryProbateMinnesota law

Estate inventory

2 min read
Short answer
An estate inventory lists the decedent's assets and their values as of the date of death. It establishes what the estate holds, supports decisions about what must be sold, and provides the valuations that determine each beneficiary's share. For real property it also establishes the basis that matters at a later sale.

An estate inventory is the personal representative's list of the decedent's assets and their values as of the date of death.

It is administrative in appearance and consequential in effect.

What it establishes#

What the estate actually holds — which is frequently not what the family assumed, in both directions.

What must be sold to pay debts, taxes and administration expenses.

What each beneficiary receives, where a will divides by percentage or where intestacy applies. Valuations determine shares.

The tax basis in the assets, which matters long after the estate closes.

The stepped-up basis point#

The reason a documented valuation is worth obtaining even where nobody is arguing.

Inherited property generally receives a basis stepped up to its value at the date of death. When it is later sold, the taxable gain is measured against that figure rather than against what the decedent originally paid.

A house bought in 1978 for $40,000 and worth $340,000 at death carries a basis of $340,000 for the heirs. Sold at $350,000, the gain is $10,000 rather than $310,000.

That is an enormous difference, and it depends on being able to establish the date-of-death value. An appraisal obtained at the time is straightforward. Reconstructing a valuation years later, from an assessor's figure and some comparable sales, is considerably weaker.

Valuing real property#

An appraisal is the strongest support, particularly where the property will be held rather than sold promptly, or where beneficiaries may disagree.

A sale shortly after death is itself good evidence of value.

The assessor's estimated market value is a starting point and is not an appraisal — it is a mass-valuation figure produced without an interior inspection.

Where the estate's main asset is a house and several beneficiaries share it, the valuation is the number they are dividing. Getting it right, early, prevents a dispute later.

Who receives it#

Interested persons are generally entitled to it. In supervised administration it is filed with the court.

Providing it promptly is also the practical answer to beneficiaries who believe nothing is happening — it is the first concrete document showing what the estate consists of.

Keep the supporting material#

Appraisals, account statements at the date of death, valuations of personal property.

Those documents support the inventory, they support the basis, and they support the representative if their administration is ever questioned. They are worth keeping well beyond the closing of the estate.

Common questions

Who prepares the inventory?
The personal representative, who is responsible for identifying and valuing the assets. Interested persons are generally entitled to receive it, and in supervised administration it is filed with the court.
How is real property valued?
At date-of-death fair market value. An appraisal is the strongest support, particularly where the property will not be sold immediately or where beneficiaries may disagree about what it was worth.
Why does the date-of-death value matter for tax?
Because inherited property generally receives a stepped-up basis to its value at death. A documented date-of-death valuation is what supports that basis when the property is later sold, and reconstructing it years afterwards is difficult.
Keep reading
Personal representative
The person appointed to administer a Minnesota estate, holding authority to sell property, pay debts and distribute what remains to the heirs.
Notice to creditors
The published and mailed notice opening the period in which claims against a Minnesota estate must be presented, after which they are generally barred.
Summary administration
A simplified Minnesota probate closing available where the estate's value does not exceed the exempt property, allowances and costs of administration.