Real estate. This includes your home, secondary residences, plots of land, etc. If you own it, then it is part of your estate. Business interests. You might be the owner or partner of a business. Find your operating documents and see if you can transfer your business interest after death. Personal property. All of your personal effects, including furniture, clothing, jewelry, books, guns, computers, etc. Intellectual property. If you own creative works, then they are assets. For example, if you wrote a novel, then you own the copyright. Trusts and other property you may own without your name on it.
Life insurance policies. Retirement accounts, such as IRAs, Roth IRAs, and employer-sponsored plans. Investment accounts, including brokerage accounts and mutual funds. Bank accounts, including checking, savings, money markets, and CDs. Money owed to you. You might have made a loan. Whoever owes you money will owe your estate. You can count this amount as part of your estate.
Also look for any account or property with a survivorship feature. For example, you might have a bank account with right of survivorship with your spouse. This means that, at death, the account passes automatically to your spouse without having to go through probate. The same can be true of real estate owned in this way. As you create your estate plan, consider whether you want to maintain the right of survivorship feature or want to change the beneficiary designation on your life insurance policy and retirement accounts.
Ask your divorce attorney for a copy of the divorce decree if you don’t have it. You might also need to go to the court clerk to obtain a copy of your divorce decree. Read the decree carefully to see what you no longer own.
A qualified appraiser should be a member of one of the national associations, which include the American Society of Appraisers (ASA), the Appraisers International Society (AIS), and the International Society of Appraisers (ISA), among others. [4] X Trustworthy Source Gemological Institute of America Nonprofit institute responsible for gemological research and education and setting gemstone buying and selling standards Go to source Keep detailed records about the value of the asset. However, realize that some assets will change in value over time and may need to be appraised again.
If one of your beneficiaries is disabled, they may need more resources to take care of themselves after you are gone. You might consider establishing a trust for their care. One beneficiary might be your spouse, who you want to give a larger portion of your estate to than you give to your children. Some of your beneficiaries might be your step-children. In this situation, they will probably inherit from their biological parents. You probably will want to leave them less than you leave to your biological children. You might have given one beneficiary gifts during your life. For example, you might have provided the down payment for a child’s home. [5] X Research source One beneficiary might have been instrumental in growing a family business. It makes sense to leave them the business instead of your other children. One of your beneficiaries might waste money because of a gambling or substance abuse addiction. In this case, a trust can help ensure that they cannot spend the money unless they meet certain conditions.
Divide up assets based on their value. For example, you might have two children. Your major assets include a home worth $200,000, a summer home worth $100,000, and a retirement account worth $100,000. You can leave one child your home and the other assets to the second child. This results in an equal distribution. Instruct your executor to divide assets equally. In essence, you are kicking the can down the road and leaving it to your executor to divide the property. Instruct your executor to sell everything and then distribute the proceeds to your beneficiaries equally. [6] X Research source Remember that some assets won’t pass through probate, such as life insurance policies, retirement accounts, and some investment accounts. Accordingly, you’ll need to change the beneficiary designations so that things are equal. That said, in community property states (like California or Nevada), your spouse may still receive a payout, even if they were not your beneficiary.
In your will or trust, you can identify who gets what property using a separate memorandum. Make sure you mention the memorandum in your will or trust. [7] X Research source It might be easiest to give sentimental objects away during your life, particularly if they aren’t worth much. However, problems can arise if the sentimental gift is valuable. For example, think twice before giving a child the family’s summer camp because they always loved it near the lake. This is a major gift, which the other beneficiaries may resent.
Once you have a name, call up the lawyer and schedule a consultation. Ask how much the consultation will cost. The lawyer will probably send you a form to fill out on which you list your assets. The lawyer needs this information to help you decide how to divide the assets between your beneficiaries. Fill out the form as completely as possible.
For example, if you have a disabled heir, then you should probably use a special needs trust. By doing so, your heir can still qualify for government disability benefits. If you have children from a first marriage, you might want to create a QTIP trust. This trust allows your surviving spouse to live in property and gain income from assets while living, but the assets pass to your children upon your spouse’s death.
For example, you might have given money to a child during your lifetime. If you treat it as a loan that must be paid back, then there will be certain tax consequences. [8] X Research source Your heirs may be subject to inheritance taxes on their gifts. Putting your money and property into trusts and LLCs may be able to reduce the tax burden on your estate.
Updating your estate plan is particularly important if you are trying to divide your estate equally. For example, the value of your investments might soar or crash. Also, you might have sold an asset that you were intending to give to a beneficiary. In these situations, you may need to revise your estate plan to keep things equal. You should also update your estate plan if you move to a different state or if tax laws change. [9] X Research source
The worst thing you can do is blindside someone after death. Also, some of your heirs might be expecting to inherit a certain amount of money or property. They may even be making decisions right now based on those expectations. It’s only fair to let them know the truth before you die. If they aren’t inheriting as much as they expect, tell them now.
Don’t listen if one child tells you it’s okay that you give another child more. They may be hiding their true feelings. [11] X Research source If you’re worried about fighting or resentment, write out explanations and justifications for your gifts. Leave behind messages stating why each person is receiving each gift.
Avoid naming a beneficiary as executor or trustee. Your other beneficiaries might think you are showing favoritism. Instead, you could name a trust company as your trustee. [12] X Research source
