Inventory is the process by which all of a person's assets (real estate, possessions, financial investments, etc.) are surveyed after their death. As well as dealing with the pain of death, the family still has to manage bureaucratic issues and even ask themselves: is it necessary to do this? Yes!
The inventory formalizes the division and transfer of the deceased's estate to their heirs. According to article 611 of the Code of Civil Procedure, it must be carried out within 60 days of death. When this deadline is not met, a fine is levied on the transfer tax, which the family must pay in order to transfer the deceased person's assets to their heirs.
Because of the pandemic, the Law 14.010/20, The new law, “Regime Jurídico Emergencial e Transitório das Relações Jurídicas de Direito Privado (RJET)" (Emergency and Transitional Legal Regime for Private Law Legal Relations), redefined a new deadline for the opening and finalization of the inventories. For the Regime, for deaths occurring on or after February 1, 2020, the count should begin on October 30, 2020 and end on December 30, 2020.
The same law states that the legal deadline of 12 months for completing inventories, if started before February 1, 2020, will be suspended from the entry into force of the Legal Regime until October 30, 2020.
What types of inventory?
But the quicker the process starts, the better. And what should you do to start the inventory? First of all, you need to understand that there are two ways to carry it out.
One of them is the out-of-court inventory, a more simplified procedure established by the Law No. 11.441, of 2007. It takes around two months, is cheaper and less bureaucratic. Even though it is considered a simplified process, an out-of-court inventory requires the support and guidance of a lawyer specializing in this area.
It is important to note that in the inventory process at the registry office, the heirs must be of legal age and capable; they must agree on the division of assets and the deceased must not have left a will.
The other way to carry out an inventory is through the courts and, as the name implies, it is accompanied by a judge. This process is carried out when there are heirs under the age of 18 or disabled involved, or in cases of disagreements between the heirs, in other words, so-called contentious disputes. In this case, each heir must hire their own lawyer, stating their reasons, and it is up to the judge to decide what is right and what is not.
- Step 1 - Pay attention to the deadline
Soon after the death, it is important for the family to pay attention to the deadline for filing the inventory so that they don't have to pay any fines. - Step 2 - Choose a lawyer
During the inventory, it is very important to hire a lawyer you trust to advise you on the necessary documentation and the correct payment of fees such as the Causa Mortis and Donation Transfer Tax, which must be paid in order for the process to be finalized. This is very important! Most probate proceedings are delayed precisely because of non-payment of fees and taxes. - Step 3 - Decide on the type of inventory to be taken
Before filing the lawsuit, you need to decide whether the inventory will be out-of-court or judicial, at the courthouse.
If it's a court case, you also have to decide whether the probate will be consensual or litigious. In the first option, is it important for the heirs to agree on the division of the estate? In the case of siblings, for example: do they all agree on an equal division?
However, if it's a contentious inventory, i.e. when there are disagreements between the heirs, who don't agree on the division of assets, each one must have their own lawyer - Step 4 - Choose the executor
The executor is the person chosen by the heirs to conduct the process together with the lawyer. The executor will be responsible for the estate (assets, rights and obligations of the deceased person) and will monitor the inventory until the end of the process. - Step 5 - Take stock of assets and debts
The family should make an inventory of all the deceased's assets and debts and present it to the lawyer, who will indicate the documents to be provided. In the case of debts, it is necessary to pay them off first. - Step 6 - Pay the ITCMD
The lawyer will advise on the necessary documents to be provided and on the correct payment of fees such as the Causa Mortis and Donation Transfer Tax (ITCMD), which must be paid in order for the process to be finalized. The tax has a high value, ranging from 2% to 4% of the property's value, and usually the probate process stalls because the family doesn't make this payment. Problems with documentation are also common. That's why a lawyer's advice is of the utmost importance.
Once these steps have been taken, all you have to do is wait for the process to be finalized for the assets to be registered in the name of the heirs.
