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Why you should inventory your assets

Inventory

 

Why create an inventory of your assets for long-term care planning?

Often we go to the doctor thinking, “I feel fine.” As you are aware, though, the doctor doesn’t simply take your word for it. Rather he or she will do a blood workup to see if he agrees with your assessment. The equivalent of a blood workup for legal and financial advisers is a thorough inventory.

Some think that by listing assets on a piece of paper that they have created an adequate inventory of what their assets are. This list certainly is a starting point for the creation of an inventory, but it’s far from complete. And, like a doctor, your legal and financial professionals will not take your word for it when you say that you have an inventory. Rather they are going to establish expectations for what that inventory should look like and what sort of information it must contain, so that they can agree with your assessment of exactly what your assets are and what can be done with them for various legal and financial reasons.

A mere list of assets will not reflect all of the information that’s is needed for various professionals to make the judgments on how to best advise you. The more detail you can give a professional, the more likely they will be able to interpret the positioning and nature of you assets, in order to give you guidance on planning strategies.

In order to create a proper inventory of assets the following parameters should be kept in mind:

  1. Ownership of assets: husband, wife, joint or other.
  2. Types of assets: cash on hand, bank accounts, certificates of deposit, money market funds, brokerage accounts, stocks, government bonds, tax-free bonds, mutual funds, individual retirement accounts (IRAs), Roth IRAs, 401(k)s, keel plans, other tax qualified plans, immediate annuities, tax-deferred annuities, life insurance policies, real estate (primary residence, other real estate), passive real estate investments (such as limited partnerships, timeshares), automobiles, interests in closely held businesses, sole proprietorships, personal and miscellaneous assets of any value, miscellaneous intangible assets, etc.
  3. Debts: mortgages on real estate, credit cards, credit lines, etc.
  4. Beneficiary designation for each applicable asset: primary beneficiary, secondary or contingent beneficiary

While the steps we describe above may seem rudimentary to a lot of our readers, I can assure you that most people who come into our office don’t understand the true nature of their assets, and what the flow of those assets may be in the event of either disability resulting in long-term care or death. It is for this reason that we have taken the time to suggest what an inventory can look like and for what purposes it can be used.

A good idea would be to start with some sort of inventory, place this in a three-ring binder and document every asset that you list on this inventory with a copy of a statement or evidence of the ownership of the asset so that in the future, your heirs or professional advisors can use this compilation or inventory of assets for your benefit and the benefit of your loved ones.

Get started today on a good inventory with supporting documents and then bring it to a trained professional to take your inventory the rest of the way.

To contact me, call 847-292-1220, e-mail abferraro@abferrarolaw.com or visit http://www.abferrarolaw.com.

 

About Anthony B. Ferraro

Anthony B. Ferraro is the founder and managing member at the Law Offices of Anthony B. Ferraro. He received his Bachelor of Science degree in accountancy from DePaul University and his Master of Science in taxation. After receiving his CPA designation in 1978, he enrolled in law school, earning his Juris Doctor in 1983 from De Paul University. An elder law practitioner, his practice areas include Medicaid planning and applications, guardianship, probate & trust administration, long-term care planning, nursing home contracts and admission, senior estate planning, special needs planning, estate planning, and estate taxation.

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