The idea of creating your estate plan may have you understandably intimidated. After all, creating this type of plan involves making decisions regarding essentially every aspect of your life, including your current affairs, possible future scenarios and events after your death. Anyone would feel overwhelmed by such decisions. Fortunately, you do not have to consider all of those affairs at once.
It may benefit you to start small when beginning your estate planning process. You can and should update or modify your plan whenever you see fit and on a regular basis. Therefore, if you do not have answers for certain questions now, you can add them later. For now, you may want to consider your estate’s net worth.
Determining net worth
The idea of calculating your net worth may not seem like a small or simple task. However, it does not have to be as complicated as you may fear. First, you need to determine the value of all of your assets. Remember, these values do not have to be exact, as rough estimates will suffice for now. When it comes to your assets, you need to include property like the following examples:
- Bank accounts
- Investment accounts
- Retirement plans
- Business interests
- Real estate
- Funds owed to you
Depending on the size of your estate and your assets, you may have more or less to include. Calculating your net worth does not stop there. You also need to consider your debts and liabilities, which may include:
- Credit card debt
- Car loans
- Personal loans
Once you have a rough estimated value of your assets and debts, you then subtract the debts from your assets to determine your estimated net worth.
Using that net worth
If you feel unsure about calculating your net worth, you do have the option of enlisting the help of financial professionals. Your net worth can help you determine whether your estate may owe federal estate taxes or inheritance taxes. Your net worth can also help you determine how you might want to divide the value of your estate among your heirs and beneficiaries.
Understandably, you may not fully understand how to implement your net worth into your estate plan. Luckily, in addition to financial professionals, you can also gain assistance from an Illinois legal professional. An estate planning attorney can help you review your estate and guide you during the decision-making process.