Creating a will is a vital step in estate planning, but it can be overwhelming, especially when it comes to determining what are assets and which ones to include. Assets are the foundation of your estate, and it’s important to understand what they are and how to distribute them. In this guide, we’ll explain everything you need to know about assets when writing a will.
What are Assets?
Assets are anything you own that has value, including cash, property, investments, and personal possessions. They can be digital, tangible, like a car or a piece of jewelry, or intangible, like stocks or intellectual property. It’s important to take inventory of all your assets before creating a will to ensure that they are included in your estate plan.
Types of Assets Included in a Will
There are several types of assets you may need to consider when creating your will:
Real Property
This includes land, buildings, and any improvements made to the property.
Personal Property
This includes physical items like furniture, jewelry, and art.
Financial
This includes bank accounts, stocks, bonds, and retirement accounts.
Business Interests
This includes ownership stakes in businesses.
Intellectual Property
This includes patents, trademarks, and copyrights.
Digital Assets
This includes online accounts and digital files, such as photos and videos.
How to Distribute Assets in Your Will
Once you’ve identified your assets, you need to decide how you want them distributed after your death. You can distribute assets in a variety of ways, including:
Specific Gifts
You can leave specific assets to specific people or organizations. For example, you can leave your engagement ring to your daughter or donate your art collection to a museum.
Residual Gifts
You can distribute the remaining assets after specific gifts have been made. For example, you can leave 50% of your estate to your spouse and 50% to your children.
Trusts
You can create trusts to hold assets for beneficiaries. This can be useful for managing assets for minors or ensuring that assets are used for a specific purpose, such as funding education.
Joint Tenancy
You can hold property jointly with another person. When one owner dies, the property automatically passes to the surviving owner. This is commonly used for real estate and bank accounts.
Tips for Including Assets in Your Will
Here are 5 great tips when including assets in your will:
Keep Your Will Up-to-Date
Your will should be updated regularly to reflect changes in your assets and circumstances. You should review your will at least once a year and make changes as necessary.
Be Specific
Be specific when identifying assets in your will. Use the full name of the asset and include identifying information, such as account numbers or property addresses.
Consider Tax Implications
Some assets, like retirement accounts, can have tax implications. It’s important to consider these implications when creating your estate plan.
Get Professional Help
Consider working with an estate planning attorney or financial planner to ensure that your estate plan is comprehensive and meets your goals.
Communicate with Your Loved Ones
It’s important to communicate with your loved ones about your estate plan, especially if you’ve made specific gifts or created trusts. This can help avoid confusion and conflicts after your death.
Conclusion
Understanding assets is essential to creating a comprehensive and effective estate plan. By taking inventory of your assets and understanding the different types of assets, you can make informed decisions about how to distribute your assets in your will. Remember to keep your will up-to-date, be specific when identifying assets, and consider tax implications. With careful planning and professional help, you can create an estate plan that protects your assets and ensures that your wishes are carried out after your death.
