Planning for the future is an important task, and creating an inventory of assets is a crucial step in that process. Estate planning attorneys need good information about your assets – both the value and how they are owned. Many types of property require special consideration in estate planning, and your overall asset picture combined with your goals can greatly influence your estate plan. For this reason, we ask our new Brighton clients to create a comprehensive list of all of their assets and liabilities to have a clear understanding of how to structure your plan. In addition, by conducting a thorough inventory of your assets and liabilities, you not only get a clear picture of your current financial situation, but you also ensure that your loved ones will have a clear plan to follow in the future. This article will guide you through the process of creating an estate inventory and highlight the importance of maintaining these records properly.
Why Create an Estate Inventory?
Present Benefits of an Estate Inventory
Conducting an estate inventory allows you to take stock of your current property, both real and personal. This includes everything from your home and vehicles to your jewelry and other personal belongings. Knowing what you own helps you manage your assets better and make informed financial decisions.
Future Benefits for Your Loved Ones
Having a detailed inventory is invaluable for your loved ones when you pass away or become incapacitated. It spares them from the overwhelming task of figuring out what you owned and who should inherit it. An estate inventory provides a clear roadmap for distributing your assets according to your wishes, minimizing confusion and conflict. Read more in our article, Here’s Why You Need an Estate Plan.
Gathering Financial and Personal Documents
Documenting Financial Information: Providing Asset Values
Estate Attorney Artika Angel will ask you to document and detail the specific amounts of each asset in a worksheet. This helps in estimating the cost of estate settlement and taxation at death. Brighton clients should gather the following financial and personal documents and provide current, rounded values of each asset. The account numbers or login credentials for accounts will not need to be shared.
- Real Estate: List all properties you own, their market values, and any mortgage balances.
- Bank Accounts: Include all checking, savings, and money market accounts.
- Investments: Detail your stocks, bonds, mutual funds, and any other securities outside retirement funds.
- Retirement Funds: Provide information on all retirement accounts such as IRAs, 401(k)s, and pensions.
- Personal Property: List valuable personal items like jewelry, antiques, collectibles, and vehicles.
- Business Interests: If you own a business or have stakes in any partnerships or corporations, provide details including the nature of the business and your ownership percentage.
- Other Assets: Include information on any loans receivable, expected inheritances, and life insurance death benefits.
Maintaining Your Documents
Properly organizing and storing these documents is crucial. Here are some tips:
- Physical Storage: Use labeled folders and store them in a secure, fireproof, and waterproof safe at home. Using a safe deposit box at the bank should be a last resort, as it can be difficult for family members to access it in an emergency.
- Electronic Storage: Scan important documents and store them in a secure cloud service. This ensures that your documents are easily accessible and protected against physical damage.
Special Considerations for Digital Assets
Understanding Digital Assets
Digital assets include online accounts, social media profiles, digital photos, and documents stored on cloud services. These assets often require specific instructions in your estate planning documents to ensure they are managed according to your wishes.
Including Digital Assets in Your Estate Plan
To properly include digital assets in your estate plan:
- Identify and Inventory: List all your digital assets, including URLs, usernames, and passwords.
- Review Terms of Service: Understand the ownership and transferability of each digital asset based on the platform’s terms of service.
- Create a Disposition Plan: Decide what should happen to each asset. Do you want it passed to a loved one, shut down, or deleted?
- Update Legal Documents: Ensure your will and power of attorney include specific language about digital assets, as required by the Revised Uniform Fiduciary Access to Digital Asset Act (RUFADAA).
Conclusion
Creating an asset inventory for your estate plan is a proactive step that benefits you now and your loved ones in the future. By gathering and organizing all necessary documents, you can ensure a smooth and clear estate planning process. Remember to regularly update your inventory and review your estate planning documents with a trusted estate planning attorney to keep everything current. Taking these steps will give you peace of mind and provide your loved ones with clear guidance when they need it most.
If you’re ready to start crafting your estate plan and schedule an initial consultation, book a call with our Brighton, MA office. We’re here to help you secure your legacy and protect your loved ones.
