Do I Have An Estate?

As we enter into the new year, now is a great time to prioritize creating or updating your estate plan. A question I often get asked is, “Do I have an estate?”

People sometimes think they do not have an estate, or their estate is too small to require estate planning. Everyone who owns an asset has an estate. The first conversation when meeting with a prospective client is to review the assets they own.

What assets are included in your estate?

Real estate usually comes to mind first. The title of the real estate is determined by looking at the deed, not the deed of trust. The deed of trust is the mortgage and does not always reflect who owns the real property. The deed describes the grantee or the buyer of the property.

If you are married, the property may be held as tenants by the entirety, which is a unique ownership for spouses only. If you own property with another person who is not your spouse, then the real estate will be titled either as joint tenants with right of survivorship or tenants in common. This is important to determine because tenants in common ownership passes according to your last will and testament, or through the intestacy statute if you did not write a will. Joint tenancy automatically passes to the other person named in the deed. We also need to value the contents of the property as part of your estate.

Cash accounts such as checking, savings, certificates of deposit, and money market accounts are included in your estate. Again, we need to look at the title of the asset, whether you own the account in your name alone or jointly with another person. Other investment assets such as brokerage accounts, stocks, bonds and mutual funds are like cash assets, and we need to determine how these assets are titled, as well. Also included in your estate are retirement accounts, such as IRAs, 401(k), 403(b), TSP and annuities.

Other assets include the value of your life insurance policy, vehicles and boats, and business ownership.

Everyone has an estate whether it is large with multiple accounts or a person who owns a single checking account in their name. Planning as to who should receive the assets, when they receive the assets, and how they receive the assets is important to all clients. Whether you have a modest estate or a large estate, you need to have an estate plan.

Nicole T. Livingston is an estates and trusts attorney in Annapolis with extensive experience helping individuals and families plan for their future. Reach Livingston at 410-268-6600 or livingston@councilbaradel.com.