Calculating the current assets under probate after an individual passes can be a somewhat complex and frustrating process for some people. Fully understanding at least some of the steps to the probate process will help make it easier for you to calculate current assets and other elements involved in these steps.
Doing so also helps ensure that you don’t over-assess or underestimate the number of assets that an individual possesses. Doing so could cause many complications during probate that will slow the process down even further and potentially cause you financial troubles.
Understand the Nature of Assets
Assets are defined as any possession that can be exchanged for cash in any type of sale. For example, your book collection is considered an asset because you could sell them and get a certain amount of money for each. Typically, though, assets are calculated as larger and grander aspects of a person’s estate. For example, a home, vehicle, and a sprawling piece of property are considered assets.
Typically, assets fall under a handful of different headings. The first of these types is a liquid asset, which is a type that can be quickly and easily turned to cash. This type also retains its market value more efficiently, providing you with decent compensation. These include:
- Cash or cash equivalents, such as checks, savings accounts, certificates of deposits, or digital coinage
- Equities, like various types of stocks or bonds that you may hold
- A fixed income source, such as the money you get from a job or retirement fund
By contrast, illiquid assets are those that would take longer than 90 days to sell and get compensation for when sold. These types of assets are often the hardest to calculate because they often operate on market demand and supply. Just a few examples include:
- High-value antiques that require a specialized buyer
- Collector’s art that also needs a higher-cost buyer
- Memorabilia or collector’s items that must be evaluated
- Real estate that may take some time to get off the market
Within both liquid and illicit assets are tangible ones (those you can touch) and intangible ones (those you cannot feel. For instance, a car would be considered a liquid tangible asset, while stock holdings may be regarded as illiquid intangible assets. All types must be adequately assessed when going through the probate process.
How Probate Affects These Assets
Probate is the state-controlled process of distributing an estate and ensuring that it is appropriately distributed. The probate process is often necessary but can be frustrating if mishandled because it can cause struggles with execution. Just a few ways probate causes these issues include how it will:
- Decrease the amount of money that parties receive
- Slow up the distribution of wealth
- Increase the amount of money paid to taxes
- Trigger family problems with those getting assets
All of these problematic situations can complicate the probate process and cause real complications with asset distribution. As a result, the steps below are essential for identifying the various assets under probate and making sure that they are calculated in fair and reasonable ways.
Ways to Calculate These Assets
Calculating assets under probate requires fully understanding the full range of a person’s belongings and what falls under this heading during the probate process. Typically, everything that an individual owns is considered part of their assets. Therefore, calculating these assets requires a careful approach, one that examines every element of a person’s life under a microscope in a meaningful way.
Start by examining all of your paperwork to find all of the assets that make sense for probate. For example, you may have wills, trusts, various types of insurance documents, bank statements, stock paperwork, and much more that all help to assess your assets. Ensure that you go through this with a legal professional to gauge their depth and importance to your overall record-keeping process.
Often, you may be able to find many of these asset elements in your mail, including bank account statements, retirement account statements, and quarterly statements. Often, this type of information is the most accurate and up-to-date possible for your needs. Try to assemble all of this information to make sense and present it in a manner that is simple for your probate officials to understand.
Don’t forget to include any electronic elements that help to make this process easier to understand. These include email accounts, tax preparation software, bitcoin trading, and all of your tax returns over the last three years. You need at least three years of records in this scenario to ensure that you find all of the information you need. A deeper probe may also be necessary for some people.
Beyond these assets, you may also want to look at your motor vehicles, all of your real estate, death benefits, any property that may pass to others, payable-on-death accounts, IRA accounts, any money owed to an individual by the armed forces, and more. All of these items may be counted under probate and require you to check with your legal and financial professionals to get the best results.