When it comes to your financial peace of mind, especially what will happen to your assets after the inevitable happens one day (either via natural causes or a falling piano), you might take some inspiration for your estate planning from the one and only Benjamin Franklin.
Franklin is known for wearing many hats: as a celebrated inventor, politician, diplomat, printer, philosopher, and author.
He was also known as a faithful maker of lists.
Franklin kept lists of everything. He wanted to make sure he maximized his time, including when to sleep, eat, and even when to take a bath. He kept inventories of the supplies in his printing shops and lists of other belongings as well.
Franklin’s list-making, in fact, turns out to be a critical part of the estate planning process, too.
One of the most important things that people need to do, and that they often forget to do, is to make lists of their assets as part of their estate plans, says estate planning attorney Christopher B. Johnson.
“You can’t assume that your heirs are going to know where all of your assets are, even if it seems obvious to you,” he says. “I urge my clients to sit down and make a list of their valuables. It doesn’t have to be complicated or go into extreme detail. It can be very simple. The point is that this list will help the estate’s executor to be more efficient in locating and identifying assets and making the transfers to the beneficiaries.”
So what should go on your estate planning list?
Some items should be obvious: financial assets like retirement plans, pensions or savings accounts.
Other items aren’t so obvious, so here—in the spirit of Benjamin Franklin—is a list of what you should also include:
- Real estate that you own (don’t forget to include everything, even that piece of property up in the mountains that you’ve kept secret from everyone)
- Vehicles you own and the name of the company that’s insuring them (more on why that’s so important is given below)
- Any ownership interest that you have in a business and its assets (this is especially important if you share a business or something else with a family member)
- Intellectual property that you own counts, too—like valuable patents or, in our digital age, a monetized social media account
- Other investment accounts
- Don’t forget personal property like jewelry, books, art, and furniture – remember Granny’s diamond wedding ring in the closet? You can leave it there, but at least write down where it is.
- Life insurance policies
If you don’t make a list, it will translate into extra costs
As mentioned in the above list, there’s a good reason why you should include specific insurance policies or insurance company names on your list of vehicles, real estate, and other assets.
Just consider this: What happens if an insurance policy lapses during the probate process and your home burns down or a car gets stolen?
That translates into a financial loss against your estate that will impact your beneficiaries. To guard against it, Johnson and his team use client lists of assets to check on the status of
insurance policies and make sure that they’re up to date. You don’t want insurance payments to lapse during the probate process.
In some cases, when a person dies and doesn’t leave behind a list or any other information about their assets, the executor or attorney is forced to hunt through old tax returns, paper files, mail, and computer files to make sure they’re not missing anything.
They might even talk to the neighbors or—if it’s a really complicated situation—hire a private detective to track down any assets that might otherwise get overlooked. This translates into another kind of cost: wasted time.
When you plan your estate through the Law Offices of Christopher B. Johnson, they will help you draft up a schedule of your assets and valuables. You can call them at any time to update and change it
When it comes to lists of assets, Johnson’s advice is simple: Make the search as easy as possible for your heirs.
“Sometimes even just a simple list of banks and other financial institutions is enough,” he says.
“At least this gives us a place to start. Good prep work in advance will help to avoid future problems for your estate.”
Prep work is definitely the key: As Benjamin Franklin also said, “By failing to prepare, you are preparing to fail.”