Before you begin planning your estate, you must evaluate the size of your holdings. This is done by finding your net worth. Your net worth is only a piece of the estate planning puzzle, but it is a very important piece. This figure will help your attorney find the best estate plan for you and your family.
Estimate Assets
To begin, estimate your real estate based upon your most recent appraisal value. Then, add to that all of your financial accounts and personal property. This is your gross worth.
Estimate Debts
Next, you need to estimate your debts. Add up your home mortgage, any credits cards with balances, and car loans or other loans. This is your estate liability. This is what would have to be paid by your estate if you passed away tomorrow.
Find Your Worth
To find your Net worth, subtract your liabilities from your gross worth. This figure is an estimate of how much your estate is worth at this moment. You should calculate your net worth every year to determine the state of your assets and to ensure your estate plan meets the needs of your estate.
What It Means
Net worth is how much your estate will be worth when you pass away. Since this may fluctuate with the market, you can only get a rough estimate. This figure, however, can tell you a great deal. It will let you know if your estate may owe taxes after you pass away. It will also help you decide what if any types of asset protection are right for you. Yearly evaluation of your worth can let you see how your estate is doing over time.
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