Asset Checklist for Your Estate Plan

Creating an asset checklist for estate planning can help streamline the process of organizing your financial affairs and ensuring that your wishes are carried out effectively. This checklist typically includes a comprehensive inventory of all assets, such as real estate, bank accounts, investments and more. By compiling this information, individuals can provide a clear and detailed roadmap for their heirs and executors, reducing potential confusion and disputes.

For help managing your finances and organizing your estate, consider working with a financial advisor.

Bank and Brokerage Accounts

Financial accounts are a critical part of your asset checklist. These include bank accounts, investment portfolios and any other financial instruments you may own, like certificates of deposit (CDs) and money market accounts. For each account, list the institution, account numbers and current balance. Also, specify the beneficiaries for each account to avoid complications during the estate settlement process.

Real Estate and Property

Real estate is often one of the most significant assets in an estate plan. This category includes your primary residence, vacation homes, rental properties and any land holdings. When listing real estate, note the property addresses, ownership details and any outstanding mortgages or liens. You may also want to stipulate how you want these properties handled, whether they should be sold, passed on to heirs or managed through a trust.

Life Insurance Policies

A couple meets with their financial advisor to discuss their estate planning asset checklist.

Life insurance policies provide a financial safety net for your beneficiaries and should be included in your estate plan. List each policy’s details, including the policy number, the insurance company and death benefit amount. Be sure to also specify the beneficiaries for each policy.

Retirement Accounts

Retirement accounts, such as 401(k)s, IRAs and pension plans, play a significant role in your estate. It’s important to list these accounts, along with the current balances and the financial institutions that manage them. Be sure to review the beneficiary designations periodically to ensure they are up to date.

Business Interests

If you own a business or have shares in a private company, these should be clearly documented in your estate plan. Include the name of the business and your ownership percentage, as well as any agreements, such as buy-sell agreements, that could affect the distribution of your interest. Additionally, consider how you wish the business to be managed or transferred after your death.

Personal Belongings and Collectibles

Personal belongings, including valuable collectibles, should not be overlooked in your estate plan. This category includes items like jewelry, artwork, antiques and other personal effects that hold sentimental or financial value. Make a detailed inventory of these items, including descriptions and estimated values. If specific items are to be left to certain individuals, be sure to note this in your estate documents.

Digital Assets

An investor looks at her cryptocurrency portfolio on her smartphone.

In today’s digital age, digital estate planning is becoming increasingly important. This category includes online accounts, cryptocurrencies, digital photos and any other digital property you own. List usernames, passwords and any necessary access information, as well as instructions for how these assets should be handled. Consider appointing a digital executor who is knowledgeable about managing digital assets.

Intellectual Property

Intellectual property, such as copyrights, patents, trademarks and any royalties from books or music, should be included in your estate plan if applicable. Document the type of intellectual property, registration details and any contracts related to its use. Determine how these assets will be managed or passed on to heirs, particularly if they have ongoing financial value.

Are the wealthy getting away with not paying their fair share of taxes, or are they carrying an unfair burden? The debate over the top tax bracket rages on as concerns about income inequality and the concentration of wealth at the top of the economic ladder continue to make headlines. Senators Bernie Sanders and Elizabeth Warren have both proposed a wealth tax on the ultra-rich, while even multi-billionaire Warren Buffett has vocally expressed support for the idea, suggesting that it is fair for wealthy Americans to be taxed at a higher rate.

Currently, the top federal income tax rate stands at 37%, applicable to incomes of $539,000 and higher for single taxpayers and $647,850 and higher for couples filing jointly. However, historical data reveals that the top marginal tax rate has been significantly higher in previous eras. In 1944 and 1945, it peaked at a staggering 94%, and in the late 1980s, it hit a low of 28% under former President Ronald Reagan.

Historical Context and Present Day

The taxation of the wealthy has fluctuated significantly throughout U.S. history, demonstrating both higher and lower levels of taxation than the current status. This historical perspective adds complexity to the ongoing debate regarding whether the rich are paying their fair share of taxes. Despite the disputes, recent data from the IRS sheds light on the current tax scenario.

Top 1% Tax Contributions

In 2020, the top 1% of taxpayers—those earning $561,351 or more—contributed a significant 42.3% of the total tax revenue collected. This translates to the top 1% paying more income taxes than the bottom 90% combined. Astonishingly, the top 1% paid a staggering $723 billion in income taxes, while the bottom 90% collectively contributed $450 billion.

State-Level Analysis

Examining the tax burden on the wealthiest individuals at the state level yields interesting findings:

Alabama Minimum income to be considered 1%: $404,560 Average income of the 1%: $1,107,769 Average income tax paid by the 1%: $263,845 Average tax rate of the 1%: 23.82% Alaska Minimum income to be considered 1%: $466,905 Average income of the 1%: $999,772 Average income tax paid by the 1%: $253,754 Average tax rate of the 1%: 25.38% Arizona Minimum income to be considered 1%: $485,146 Average income of the 1%: $1,464,848 Average income tax paid by the 1%: $369,426 Average tax rate of the 1%: 25.22% Arkansas Minimum income to be considered 1%: $387,666 Average income of the 1%: $1,483,925 Average income tax paid by the 1%: $313,266 Average tax rate of the 1%: 21.11% California Minimum income to be considered 1%: $726,188 Average income of the 1%: $2,430,790 Average income tax paid by the 1%: $655,180 Average tax rate of the 1%: 26.95% Colorado Minimum income to be considered 1%: $609,919 Average income of the 1%: $1,799,148 Average income tax paid by the 1%: $465,284 Average tax rate of the 1%: 25.86% Analysis of Minimum Income of the Wealthiest 1% and Average Tax Rates by State Analysis of Minimum Income of the Wealthiest 1% and Average Tax Rates by State

Debts and Liabilities

Your estate plan should also account for any outstanding debts and liabilities. This includes mortgages, personal loans, credit card debts and any other financial obligations. Listing these liabilities helps ensure they are settled appropriately and do not become a burden on your heirs. It is also wise to consider how these debts will be paid, whether from liquid assets or the sale of property.

Trusts and Beneficiary Designations

If you have established any trusts, include them in your asset checklist. Trusts can be an effective way to manage and distribute assets, and they often offer tax advantages. Document the name of the trust, the trustee and the assets held within the trust. Additionally, review all beneficiary designations across your accounts and policies to ensure they reflect your current wishes.

Category	Types of Assets
Bank and Brokerage Accounts	Bank accounts Investment portfolios Any other financial instruments like certificates of deposit (CDs)
Real Estate and Property	Primary residence Vacation homes Rental properties Any land holdings
Life Insurance Policies	Whole life insurance policies Term life insurance policies Other types of life insurance policies
Retirement Accounts	401(k)s IRAs Pension plans
Business Interests	Businesses owned Shares owned in businesses
Personal Belongings and Collectibles	Jewelry Artwork Antiques Other collectibles
Digital Assets	Online accounts Cryptocurrencies Digital photos Any other digital property
Intellectual Property	Copyrights Patents Trademarks Royalties from books or music
Debts and Liabilities	Mortgages Personal loans Credit card debts Other financial obligations
Trusts and Beneficiary Designations	Trusts Beneficiary designations

Bottom Line

An asset checklist for estate planning serves as a thorough directory of your wealth and possessions, making it simpler for heirs and executors to carry out your last wishes. It includes everything from bank and brokerage accounts to real estate properties and personal belongings. Including such diverse assets as life insurance policies, business interests and digital assets ensures that every element of your estate is accounted for.

Furthermore, addressing intellectual property and liabilities ensures that both potential income and debts are managed according to your intentions. Compiling this information periodically will aid your loved ones in managing your estate so you can ensure your wishes are enforced after you are gone.

Estate Planning Tips

Advanced gifting strategies can help reduce the size of your taxable estate while benefiting your heirs during your lifetime. The IRS allows for annual gift tax exemptions, meaning you can give a specific amount (up to $18,000 per recipient in 2024) to as many individuals as you want each year, without triggering gift taxes. Over time, this can significantly reduce the size of your estate and minimize future estate taxes. Lifetime gifting strategies, such as 529 education savings plans, also offer the opportunity to transfer wealth for a specific purpose, like education, while reducing your taxable estate.
A financial advisor with estate planning expertise can be a valuable partner and resource as you make a plan for your assets and heirs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

The post Asset Checklist for Your Estate Plan appeared first on SmartReads by SmartAsset.