Reasons for Inventories
The reasons for inventories are multifold:
1. Fraud mitigation: Having online accounts easily accessible promotes a swift response to breaches, minimizing the impact of fraud. After a person's death, quick closure of their online presence reduces the risk of fraudulent activities by unauthorized individuals.
2. Estate, tax and insurance planning: An inventory can help advisors decide which items should go into trusts and how much insurance you need. Co-insurance penalties aren’t only for businesses; they’re for residential insurance, as well. An inventory also allows your trusted advisors to comprehensively plan for and protect your universe of assets, not just the investible ones.
3. Asset distribution: Inventories can help ensure that the recipients you want to inherit specific items are documented, reducing family internal squabbles.
4. Prevent “Falling through the cracks”: In the US, over $40 billion sits unclaimed in state governments due to abandoned property. After five years of inactivity, the state confiscates such property, but they have an obligation to find the rightful owners. You can check whether you have unclaimed property at no cost and retrieve it, often with added interest in some states. Contact me for the steps needed to find and reclaim lost assets.
5. An inventory allows you to prove what you have in the event of any type of loss and simplifies the insurance claims process.
An inventory documents each box’s contents when moving, downsizing and putting things into storage. You can create a master inventory, by box number, with the contents of each box listed.
6. An inventory documents your legacy for future generations.
Ways Inventories can be created
Inventories can be created by someone in the family or by a service that specializes in creating them.
When documenting your home, photos are recommended over videos, due to ease of updating and their ability to capture specific assets effectively. Scanning is best used for documents, saving them as either images or PDFs. To create an inventory yourself, I’d recommend doing a “Quick Room View” inventory. Take seven to 15 photos of each room, including room views, walls, floor, ceiling, open cabinets and drawers that have valuable items (just a quick photo – no moving of items) and open each closet (again, just for a quick photo as a reminder of what was in there). This approach ensures comprehensive documentation of every visible item and room conditions. With today’s high-resolution cellphone cameras, you can zoom in on photos to see details. And the cellphone captures the date/time. Quick Room View Inventories take 1 minute/photo (using the Pinventory app) or 10-15 minutes/room. By multiplying the number of rooms, including hallways, by the 10-15 minutes, you’ll see how little time it should take. If you split the task among family members, it’s significantly less time.
Don’t want to do it yourself? Find a company that specializes in creating inventories. Be sure they’re credible, trustworthy, and have both experience and proper insurance coverage. You should expect to receive a professional digital and/or physical catalog that flows the photos by room and includes a table of contents. The service provider should have a secure platform that allows access to it, with the option for you to take over the account, to input and update the information, including values, as well as having additional functionality such as creating insurance reports, designating eventual recipients of items (asset distribution), and printing out box labels for storage.
Inventories vs appraisals
Creating an inventory usually doesn’t include appraising items. These are two, very distinct, separate activities. An inventory specialist photos and catalogs items in an organized flow. Appraisers value specific items and, to do that properly, extensive art history background and experience are needed. It is recommended that you use only qualified appraisers that have been qualified by known agencies such as the International Society of Appraisers (ISA), Appraisers Association of America (AAA) and American Society of Appraisers (ASA). These groups require their members to be compliant with USPAP (Uniform Standards of Professional Appraisal Practice) as well as maintain their own specific standards. Inventory specialists can work hand-in-hand with qualified appraisers, using the photos and the appraisal the appraiser created, incorporating both into the final inventory.
With age, memories tend to fade, making inventories invaluable. They offer peace of mind to families, ensuring that all items are accounted for and easily accessible whenever they’re needed. Additionally, inventories document important possessions, including their details, location, and plans for future ownership. When I’m doing an inventory with a senior client, I start to chuckle when they point to something and say, “Do you see that drawer?” or “Do you see that curtain?” because I know what’s coming. “That’s where I hid some cash/bonds/certificates/jewelry…just in case.” Who would ever have known!
Carol R Kaufman is CEO and inventor of Pinventory, LLC, a software/service company offering multiple solutions to help create home, life and business inventories to proactively plan for and more easily recover from any type of disaster or loss and to allow for the smooth transition of assets to their next owner. She’s also the founder/CEO of Alternatives TLC, an operational, organizational and HR consulting firm to entrepreneurs and family businesses, helping them organize their internal infrastructure. Carol works with HNW individuals, families and many types of firms including financial, technology, and even food-processing plants! An entrepreneur for over 40 years, Carol specializes in public speaking, training, and finding software/service-based solutions to organizational problems.