Your assets are, simply put, everything you have of value. To calculate your assets, you’ll want to add up the value of these things, and to determine your net worth you’ll need to subtract your debts from your assets. Determining your net worth is an important part of estate planning, and sounds overwhelming, but it does not have to be. Let’s look a little more closely at what assets you may have, how to determine their value, and then how to determine your net worth.
Adding Up your Assets
Assets are anything you own that is of monetary value. These things include real estate, stocks, retirement savings, cash on hand, cars, etc. Most people stop adding items when they get down to things smaller and less valuable than a car, but in some cases you may have items that are of great value that you haven’t thought of. Fine art, for example, can be an asset of great value. Likewise jewelry, antiques and expensive musical instruments may be valuable enough to be included when adding up your assets. To find the value of your total assets, you may need to obtain appraisals of items such as real estate, cars, art, jewelry, etc. Once you have an appraised value of everything, you simply add them up and then you have a rough estimate of your assets.
Finding your Net Worth
Net worth takes the value of your assets, and subtracts any debts you have. For example, you would determine the value of your home, and then subtract the amount of any mortgages or home equity loans you had on that home. You would also consider any other debts, such as credit card bills, medical bills, student loans, business loans, car loans, or personal loans. Once you have subtracted all debts from the total value of your assets, you will have your approximate net worth.
Determining your assets and net worth is an important part of estate planning. It can help you determine approximate probate costs and if your estate would be subject to estate taxes. It can also help you determine which assets to leave to individuals or charity based on value. Finding your net worth can also ensure that you are not leaving certain beneficiaries assets burdened with a significant amount of debt.
If you are ready to begin estate planning but feel overwhelmed, call DK Rus Law today. Our firm focuses on estate planning and can help you compile any information you need to determine your assets and net worth. We can also help you determine if a will or a living trust is the best option for you, based on the value and type of your assets. Estate planning does not have to be stressful, and it is worth the time and planning. Give us a call today to schedule an appointment to talk about your unique situation.