How Do I Know What Assets I Have?
Today we are taking a close look at assets! Asset is a fancy word used in the legal and financial world to describe things that hold value. Meanwhile debts are used to describe monies owed. The tricky thing here is that you may actually hold a debt on an asset!
Whether you’re here hoping to learn more about your own net worth or trying to ascertain what assets a deceased loved one held, today we’re looking to explain what assets are and how to protect them.
Real Estate
People probably think of real estate first when thinking of assets. It’s something that everyone can understand. It’s a part of the American dream— to own real estate. The white picket fence with the charming home sitting behind it.
Real estate can be a valuable asset! Oftentimes it appreciates over time and can be sold or leased for a profit. Thus creating a revenue source— which makes it an asset.
However, there are instances where the debt on the property outweighs its value. When a person is upside down in their mortgage it becomes a liability.
Depending on the type of real estate that is owned you may wish to protect it by utilizing a Trust or creating an LLC. Our office specializes in the creation and administration of both.
Vehicles / Boats / Recreational Vehicles
Just like with real estate, these types of assets can appreciate or depreciate over time.
Motor vehicles, such as personal cars, historically depreciate the moment you drive them off the lot. But the price of a used car has skyrocketed in recent years— meaning there is a chance your personal vehicle may be worth more than the remainder of the debt owed on it.
Boats are also assets that can hold significant value. Small fishing boats naturally carry less value than a yacht. But both can be valuable assets when well maintained.
The same is true for RVs, jet skis, and snow machines. Each of these items is considered an asset— so long as the value outweighs any debt on it.
Timber / Mineral Rights
Timber and Mineral Rights can be very hard to value and require an expert’s appraisal. But this is also an asset and can be valuable to an estate.
Collectibles / Art / Jewelry
This category is sometimes wildly valuable and other times a complete bust. It just depends on the items. This is where appraisals can be informative and beneficial.
Your coffee mug collection is not likely valuable, but a collection of coins or Babe Ruth baseball cards may be incredibly valuable.
Same with art. If you have paintings by an unknown artist it may be worth little more than the canvas or frame. However, if you have a Monet or Degas it’s going to be worth a pretty penny.
Jewelry is much the same: is it the real deal? If so, it’s a valuable asset. If not, it may hold sentimental value, but sentiment rarely sells.
Cryptocurrency
Cryptocurrency is becoming something better understood as time goes on. Because Crypto is relatively new there still remains a lot to be seen, learned, and legislated about it.
However, just because it’s new doesn’t mean it’s not an asset.
To learn more about Cryptocurrency and estate planning click here.
Cash
Cash is an asset. Full stop.
What you have in cash, plus the value of your other assets, minus your debts is your net worth.
Tangible Personal Property
This is a catch all for all the physical items you own that didn’t fit into any of the categories above. Your furniture, your silverware, your computer, everything else fits in this box. These are still assets— even though standing alone most of them don’t hold huge value. Collectively they could be worth a significant amount, though.
How do I Protect My Assets?
So we’ve taken a look at assets above and now you’re wondering how to protect them for future generations.
While every estate is different and requires different types of protection, we believe that a Trust is the best way to safeguard your assets for future generations.
Trusts are legal agreements that are like a box. The Trust Agreement allows you to transfer your assets into that box and it can protect you from liability and taxes.
There are many for many different types of estates.
The professionals at Siedentopf Law would love the opportunity to discuss your assets with you and come up with a plan that serves your estate best.
Call us at (404) 736-6066 or visit our website to schedule a consultation.
