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10 Steps to Creating a Good Estate Plan

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Step #1 - Calculate Your Net Worth
10 Steps to Creating a Good Estate Plan
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The very first step in building a good estate plan is to determine your net worth. It's relatively easy to make a quick calculation of your net worth by adding up rough estimates of the values of all of your assets - including bank and investment accounts, personal property (jewelry, collectibles, cars, boats), retirement plans (401ks, IRAs), death benefit of life insurance, business interests, monies owed to you, oil and mineral rights, and real estate - and then subtracting from this total all of your liabilities - including credit card debt, car and other personal loans, and mortgages:

Once you've calculated your net worth, you will need to figure out if your estate will be liable for federal estate taxes. You will also need to know if your state assesses its own separate estate tax and/or inheritance tax: Even if you have determined that your estate won't owe any federal estate taxes, your estate may very well owe state estate taxes and/or inheritance taxes since most of the state estate tax and inheritance tax exemptions are much lower than the federal exemption.  There are also many other financial reasons why you will need an estate plan aside from estate tax issues.  Aside from this, your personal situation should be examined to determine if you need an estate plan to take care of you if you become incapacitated and your family after you die.

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