When creating an estate plan it is important to have a breakdown of the client’s assets. The following article lists the most common assets that a client owns, with a brief description of each asset. By identifying the assets a client owns, we can better assist our clients in creating an estate plan that meets our clients’ needs and goals.
Estate Planning 101: The most common assets are:
- Real Property
- Personal Property
- Intangible or Intellectual Property
- Automobiles
- Bank Accounts
- Stocks, Mutual Funds, and Bonds
- Life Insurance
- Annuities
- Retirement Accounts
- Businesses
Real property includes any and all land owned by the client. Some common examples of real property are single family homes, condominiums, town homes, vacation homes, rental properties, farmland, and commercial property. Titling the property in the name of the living trust protects the real property asset from having to go through probate. Of course, whether the beneficiary then decides to then add any of these properties to the listings of Montana ranches for sale out there, for example, is their decision, but at least they then stand to gain from the sale.
Personal property encompasses various movable assets including art, furniture, clothing, and jewelry. A detailed list of a client’s personal property is not necessary. However, clients may wish certain valuable items to be distributed to particular beneficiaries. For example, a grandma may wish for her wedding ring to pass to her granddaughter. An assignment of personal property can be added to an estate plan in order to declare the Trustor’s intention that all of the Trustor’s personal property be included in the living trust.
Intangible or Intellectual Property
Intangible property includes trademarks, patents, and copyrights. It is a good idea to have your intellectual property properly valued through the use of a valuation expert.
We recommend valuable cars, including motor homes, be put into the living trust. However, for typical automobiles under $50,000, a pour over will can grab the asset upon your death and place it into the trust.
Making a list of all of your bank accounts and the total assets in each is a great way to help your estate planning attorney. Some of the bank accounts may need to name the trust as the beneficiary. However, maintaining a personal or joint account for a smaller bank account that is used for day to day items tends to make life easier.
Stocks, Mutual Funds, and Bonds
Most clients own stock and/or mutual funds. You may also own bonds, such as municipal bonds or U.S. Treasury Bonds. Your estate planning lawyer will need to know what company you use to invest with.
Your living trust attorney would need to know what type of life insurance policy you own and what the face amount of the policy is. The most common types of life insurance are term, whole, and universal life. Typically, the Trustor’s spouse is named as the beneficiary with the trust named as the contingent beneficiary.
Your trust lawyer will want to know if you receive a fixed payment from an annuity and what company or organization the annuity is through.
Your estate planning lawyer will need to know what company your retirement accounts are currently with. Retirement accounts include traditional IRAs, Roth IRAs, pensions, and 401(k)s. Typically, the Trustor’s spouse is named as the beneficiary with the trust named as the contingent beneficiary.
Your trust lawyer will need to know if you have an interest in a business, such as a sole proprietorship, a corporation, or a limited liability company.
For questions on the above content or for any other legal advice dealing with California living trusts, an experienced California trust lawyer can help. Please contact the Law Offices of Jack B. Friedell today.
The authors, publisher and host are not providing legal, accounting, or specific advice to your situation.
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