4 Steps to Determine the Value of Your Estate
As part of the estate planning process, it's important to determine what you own and to calculate the value of your estate. By calculating your estate size, you can plan for the future and leave your loved ones better prepared.
Determine your estate size by taking the following four steps:
Step 1: Inventory Your Major Assets
Assets can include many items, such as the following:
- Cash, including savings accounts and CDs
- Stocks, bonds, mutual funds
- Retirement accounts, such as 401(k)s or IRAs
- Home(s), land and other real property
- Life insurance policies
- Tangible personal property, including automobiles, jewelry and antiques
- Equity/ownership interest in a business like a sole proprietorship or partnership
Step 2: Determine How and With Whom Your Assets Are Owned
Ownership generally falls into three categories: solely owned; jointly owned with rights of survivorship; and tenancy in common. Owning an asset with your brother, for example, is different than owning an asset with your spouse. Also, married couples who live in community property states have additional record-keeping requirements.
If you are unsure how your assets are owned, review the title of each asset. This information can typically be found in the deed, title or account information. If you are still unsure, ask your attorney or financial advisor.
Step 3: Calculate Your Debts
Debts are subtracted from the value of your assets at your death. Common debts include mortgages on a primary residence or vacation house, equity loans and credit card balances. Vehicle loans and other loans are also calculated here.
In addition, your estate itself will incur legal fees and other expenses that will reduce the amount of your estate subject to taxation.
Step 4: Total Up Gifts You've Made
Don't forget the gifts you've already made to others. You are allowed to gift up to $14,000 (for 2015) per year per person without having to declare the gift or pay gift taxes. Gifts made during your lifetime in excess of this amount will reduce your estate tax exemption (currently $5.43 million).
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Contact Jamey Leahey '92 at (859) 238-5224 or email@example.com to learn more about donating assets as well as other giving options.
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income taxes include federal taxes only. State income/estate taxes or state law may impact your results. Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.