Many people wonder what is considered a part of their estate. We say often that if you have an estate you need an estate plan. But what makes up an estate?
The short answer is that anything you own makes up your estate. From intangible things to physical items found in your home, everything you own is a part of your estate. We’ll briefly explain the popular assets that can make up an estate.
Real Estate
This includes your primary residence and any other properties you own. In some cases the property is owned outright. In other cases, properties may still be mortgaged. Your estate is still comprised of mortgaged properties. Just keep in mind that debts must be settled before the estate can close out.
Bank and Investment Accounts
This can include standard savings and checking accounts, but also CDs, retirement accounts, and even stocks and bonds.
Cryptocurrency
Any cryptocurrency that you own is a part of your estate. Just make sure your executor or trustee knows how to access your wallet.
Lumber or Mineral Rights
The right to lease these resources or the land you own that provides access to them are a part of your estate.
Tangible Personal Property
Any physical items you own from furniture to your clothing to your stamp collection.
All of these types of assets are the major items that make up your estate. But the bigger question is why you want to know what is in your estate? Often people ask this question to get a better understand of their estate’s value and potential tax liability.
Estate Taxes
The vast majority of estates are valued under the current estate tax exclusion limit. That limit for 2025 will be $13.9 million for an individual. The state of Georgia does not have a state estate tax. This means that your estate will not have to pay federal estate taxes unless it is valued over $13.9 million.
Now, if you believe your estate is valued close to or above the federal exclusion limit, you need to know the value above and beyond that $13.9 million will be steeply taxed— at about 40%. This is why it’s imperative to plan well.
Keep in mind that these exemptions are still within the Tax Cuts and Jobs Act (TJCA) timeline. This Act went into effect in 2017 and increased the exemption limit substantially. This Act will expire on December 31, 2025 if the government does not take action to extend the Act or make it permanent. If the Act expires, the tax exemption will sunset to its pre-2017 rates— meaning we can expect the tax exclusion limit to drop to around $6 million.
This is where estate planning is incredibly sticky. We don’t know what is going to happen in December of 2025. We don’t know what the federal government will do. We can hope that they will extend the TCJA, but we should plan as if they won’t. This means we really need to determine if the value of our estate is actually close to that $6 million threshold.
How to Plan
Everyone who has an estate needs an estate plan. Your estate is unique, so your plan should be too.
Many people assume that utilizing a Trust is only for those who will have significant estate tax liability. But the use of a Trust can benefit estates well under the estate tax exemption limit.
This is why having a team of skilled professionals working with you is so important. An estate planning attorney can help you determine the best plan for your unique estate. This will provide peace of mind for you and your loved ones.
We can help you get the right plan in place that limits your tax liability and provide you and your loved ones the peace of mind you need! Call us at (404) 736-6066 or schedule a consultation.
