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3 key assets that should be addressed in an individual’s estate plan

On Behalf of | Mar 7, 2023 | Estate Planning

Everyone who is considering their estate plan has unique needs. Some individuals have few assets and primarily need to protect themselves from the dangers of incapacity. Others have dependent family members who require careful consideration and possibly expensive life insurance coverage.

Properly addressing personal needs and family members is important, and an estate plan needs to carefully address someone’s belongings as well. The age of a testator and their personal history often influence what assets they have and how they intend to distribute them. While careful customization of terms is key to success, there are certain terms that most testators will need to address in their documents.

1. Financial accounts and other investments

It is common for those with personal resources to diversify how they hold their assets. In addition to money market accounts and retirement savings, people may buy stock in businesses or invest in commodities.

Testators typically either need to include accounts specifically in their will or trust documents or add transfer-on-death designations to specific accounts. Those designations attached to the accounts will require updates whenever someone reviews and modifies their existing estate plan.

2. Real estate

Someone’s primary residence or their vacation home might be the most valuable property they own. For some families, real property may be the only large asset they have to pass to the next generation in some cases, the goal may be to let someone move into the home.

Other times, the executor of an estate will sell real property and distribute the proceeds among multiple beneficiaries. Making a clear plan to minimize taxes and streamline the transfer is a crucial estate planning step.

3. A residuary estate

Individuals may have numerous other assets they want to specifically address, from an ownership interest in a business to a vehicle. After addressing financial holdings, real property and other large possessions, testators typically also need to address their residuary estate.

Any assets not specifically listed in estate planning documents are part of someone’s residuary estate, and such assets could become the property of one beneficiary or could end up included in an estate sale. Failing to address their remaining property could lead to major conflicts among family members.

When testators understand which assets they need to address in their estate planning documents, they will be less likely to make oversights that could lead to probate-related complications for their families. Addressing all major property during the estate planning process will also give someone more control over their final legacy than they would have otherwise.