Treasure Hunt: Asset Inventory

     Question: What property do you own, where is it located and how much is it worth? Next question: Is this information recorded somewhere, whether in hard-copy or electronically? Next question: Who, if anyone, has knowledge of and access to this information? If you cannot answer each of these questions with confidence, then your final legacy for your loved ones may resemble an unpleasant treasure hunt.

What Happens When There is No Asset Inventory for the Estate

     It happens too often. 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 these responsible people 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 and receive their marching orders. These successors assume their positions of responsibility only to make a shocking discovery: There is little, if any, information available regarding the property they are now legally required to identify, locate and value.
    Instead of approaching estate planning as a process to get (and keep) their legal affairs in order, too many people mistakenly believe that everything is okay once they sign their legal instruments. Nothing could be further from the truth. In fact, signing legal instruments without identifying, locating and valuing the property is like buying an automobile without putting fuel in its tank. It may look nice, but you are not going anywhere.

Maintain an Updated Asset Inventory

     You are in the best position to know what you have, where it is located and what it is worth. After all, you likely are identified as the owner on any deed, title certificate or account regarding each asset you own. Additionally, you probably receive notice each year from tax collecting authorities to remind you of your property ownership (and the taxes you owe). If nothing else, make a copy of your deeds, titles, account statements and tax notices, then retain them with your legal instruments.
     Do you have heirlooms and collectibles that are difficult to value? If so, then a professional appraisal is essential to establish their value for estate distribution and death tax planning.
     It has been said that the will to succeed is for naught without the discipline to 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. Even the best-laid plans succeed or fail depending on how well they are recorded and communicated. Remember: The time that you invest today to record and communicate information about your property will make your estate administration more efficient (and less expensive) later on.