As you write out another check to make your monthly mortgage payment or for your child’s college tuition, you may not be feeling particularly flush. In fact, you may be feeling decidedly cash strapped. However, it is possible that you may be better off financially than you realize.
For starters, if you own a home, you have an asset that has the potential to increase in value and has historically helped build wealth for many people. You may have access to significant assets in the future if you are a participant in a pension or a retirement plan through work. And, if you have a sideline business or money invested in stocks, bonds, or other assets, you have assets that can generate wealth.
The reality is that your combined assets may surprise you and may constitute a significant estate. Here is a checklist that you can use to estimate just how much you might be worth and what items may be included in your estate.
- Your primary residence, a vacation home, or investment real estate
- Securities, such as stocks, bonds, mutual funds, or exchange-traded funds
- Precious metals and cryptocurrencies
- Checking and saving bank accounts as well as certificates of deposit
- Interest and dividends you are owed and have not been paid
- Employer retirement plan accounts and individual retirement accounts
- Closely held business interests
- Life insurance policies you own
- The value of certain annuities you may own
- Tangible personal property, such as autos, boats, antiques, artwork, or other collections with a high appraised value
- Any debts owed to you, and certain trust assets
The Value of Your Combined Assets
You can determine the value of your estate by adding up what it is worth and then subtracting the expense of settling it, income taxes, mortgages, and other debts. It most likely will require an appraiser to fix a value onto certain components of your estate. However, given the increased federal estate tax exemption, it is likely that only those individuals with substantial estates will have to pay federal estate taxes.
Determining your net worth every year should be a part of your overall financial and estate planning strategy. Doing so can provide you with a “big picture” view of where you stand financially. It can also help provide some peace of mind when you find yourself slightly overwhelmed by paying for day-to-day living expenses.
The input of an experienced estate planning and financial professional can be invaluable when it comes to all matters related to your estate planning.