Everyone knows they’re supposed to make an asset list when they make a will or trust, but the reasons we ask you to do this are often overlooked. Although most mistakes can be fixed if you realize you made them during your lifetime, leaving things out of the plan can have dire consequences if you pass away before the issues are discovered.
Fumbling Assets Costs Heirs Money
For example, Warren Burger, former Chief Justice of the Supreme Court, died at age 87 with an inadequate will. Justice Burger wrote his own will and it was just 187 words long. Burger misspelled the word “Executor” - that didn’t doom his will, but it was very embarrassing for someone who wielded power over the entire nation. The bigger problem with the will was that it was vague and actually did not “plan” for the distribution of assets at all. Justice Burger could have used FastWill to set up a trust and given the rest of his estate away as gifts. But the Chief Judge was known for being arrogant and pompous, and that hubris cost Burger’s heirs a lot of money. As a result, his children wound up owing over $450,000 in taxes on an estate valued at around $1.8 million. Ouch!
Forgetting to Put Assets in Trusts Ruins the Whole Estate Plan
The exercise of listing the things you want to convey through wills and trusts can also help you make sure you actually follow through on funding your trust. Not transferring assets into a trust is a common mistake. That’s what happened to actor Paul Walker, who had the foresight to make an estate plan when he was just 28 years old. Unfortunately, Walker died in 2013 in a tragic car accident when he was 40. He never updated his old estate plan and also forgot to fund his living trust. That meant his whole estate went through probate court and was made public. Generally, lawyers aren’t responsible for actually transferring assets into the trust. If Walker had made an asset list and then reviewed it when he went through major life events, he would probably have realized he needed to fund his trust.
So, how do you avoid these mistakes? By making a comprehensive list of your assets.
How to List Your Assets
Step 1: Title and Personal Information
At the top of your list, you should title it “CURRENT ASSETS LIST” and then put the date underneath. Make sure you identify yourself so that anyone who sees this document can authenticate it. For example, include the following information:
FULL LEGAL NAME:
CURRENT ADDRESS:
SOCIAL SECURITY NUMBER:
Step 2: Real Estate
The first thing to list is your real estate. Your real estate should be defined specifically. Include three types of real estate - property you own, property you lease, and other property (such as a timeshare).
Step 3: Personal Property
There are many categories of personal property, starting with motor vehicles and boats. List each vehicle or boat by year, color, make, and model. Be sure to state whether you are the sole owner or a co-owner. If you have a co-owner, list that person’s name.
You should also include Stocks and Bonds. Include information about each investment such as the date you acquired it and any applicable account numbers.
If you own digital assets (like NFTs, cryptocurrencies, and other accounts), list them along with the date acquired and your personal key or password.
Life insurance policies should be listed, although those policies typically do not get included in your will. Instead, they go to a specific beneficiary, who can be a person or an entity. You can include an insurance policy in a trust.
Don’t forget to include any trademarks, copyrights, or patents that you own or have an interest in. If there are documents certifying that you hold those interests, attach a copy of those records to the document, or list the identifying information.
Household items that you intend to bequeath to someone should be listed as well. This may include jewelry, family heirlooms, antiques, or other items.
Step 4: Financial Information
Here is where you will list the name of your bank accounts. Add your bank name, account number, and routing number for every account. If you intend to leave cash or have money market accounts, state that as well.
Some of your accounts may be Payable on Death (POD) to a person you designate. A POD account does not pass by will, but you should include it so that you evaluate your total estate.
Step 5: Business Information
Many people forget to note any ownership of a company. You should include all ownership stakes you have, no matter how small it is, even if it has a small number of assets. You will still need to state who you want to get your interest in the business. It’s helpful to include the formation documents of the businesses because they often have specific instructions about what happens to the ownership interest when you die.
