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Note: Nothing in this publication is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same. [See IRS Circular 230.]

Content: Copyright © Integrity Marketing Solutions

Volume Ten Number Six June 2013

Searching Without A Treasure Map

Estate Equalization    Can you identify all of your assets and determine their value? Have you prepared an accurate inventory of these assets, and is that inventory preserved in either a written or digital format? If someone had to locate this inventory and valuation information, could they do so or would it be the equivalent of trying to locate hidden treasure without a map?

Common Unintended Scenario

    Responsible people meet with legal counsel and prepare comprehensive estate plans. Their plans may even include cutting edge techniques implemented through proven legal instruments. Then, an injury or illness strikes and they become incapacitated. Eventually, they die. Sometime thereafter, the successor decision-makers appointed in the legal instruments meet with the legal counsel who prepared the estate plans. Too frequently, they make a shocking discovery: there is little, if any, information available regarding the property they are now legally required to identify, locate and value. They are adventurers on a quest with a map that is missing huge sections.

Misconceptions about Estate Plans

    The fundamental problem is a misconception many have about what constitutes an estate plan. There are many that presume an estate plan amounts to drafting and signing legal documents. Nothing could be further from the truth. In fact, signing legal instruments without identifying, locating and valuing the property is like signing documents to open a bank account but leaving the money tucked under your mattress. Although you have a bank account where your money can be safely guarded and accumulate interest, it does no good because you have not taken the critical step of making a deposit.

An Ounce of Prevention vs. A Pound of Cure

    While your designated fiduciaries may be able to locate and value your assets, you are better equipped to handle these tasks. After all, you likely are identified as the owner on any deed, title certificate or account regarding each asset you own. The process of identifying and determining the value of these assets will be aided by the fact you receive tax bills, account balance statements and similar documents that provide a reminder of the assets you own along with information regarding their current value. These documents and an inventory that includes estimated values should be kept and maintained with your estate planning documents.

There are some assets that are hard to value, such as heirlooms, antiques and collectables. In these instances, a professional appraisal is essential to establish their value for estate distribution and death tax planning.

Carrying Plans into Actions

Even the most careful estate planning is only effective if you take action to implement the plan. When it comes to avoiding an unpleasant treasure hunt for your loved ones, maintaining accurate records is essential to the success or failure of your estate plan. And do not forget to communicate this information to your successor decision-makers.


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