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How much are you worth?

Jeffrey Apps and Tracy Tutag

Do you know the value of all of your assets? Do you know what to include when calculating your net worth? It may not surprise you to learn that many people never take the time to appraise all of their assets. Unfortunately, if you don’t properly assess your net worth, your heirs could inherit an estate tax liability instead of the inheritance they may have been expecting. Because many people are unaware of just how large their estate really is, especially when they consider their real estate holdings, they underestimate their exposure to Federal Estate taxes and the end result can be alarming. If you haven’t taken an inventory of your assets and their fair market value, it may be time to do so. For estate planning purposes, the worst time to take stock of your assets is when your accountant is completing your Federal Estate Tax Return. While the first goal of estate planning may be the proper distribution of your property to the heirs of your choice, another important goal is to reduce estate taxes at death. The following is a partial list of items to be considered when appraising your net worth:Financial statements: checking and savings accounts, money markets, mortgages, loans and credit card balancesInvestments: stocks, bonds, mutual funds, savings bonds, retirement accounts, deferred compensation plans, pensionsTax information: recent state and federal tax returnsInsurance records: life, health, disability insurance policiesDocuments and Records: wills and trusts, employee benefit statement, safe deposit boxReal Estate: personal residence and other real estateThere may be more to your estate than you realize. If you overlook any assets when calculating your net worth, serious implications could result. One common misconception regarding life insurance is that the beneficiary will receive the death benefit tax-free. In many cases that is true. However, if the decedent owned the policy, the death benefit proceeds are subject to inclusion in computing the estate tax liability. For example, a $1 million dollar term life policy, which contains no cash value while you are alive, is worth $1 million dollars upon your death and, as the owner of the policy, the proceeds are considered part of your estate. Business assets and buy/sell agreements may also factor into your estate. Proper valuation of all assets is the first step; secondly you should consider potential appreciation in the value of those assets over the next 10, 20 or 30 years. Lastly consider the distribution of those assets upon death. Remember that how you have titled your property is extremely important. Your plan should effectively utilize current estate planning lows and techniques (i.e. unified credit, marital deduction and gifting) to help lower taxation and distribute the maximum possible to your heirs and/or charities of your choice. Contact your attorney and financial advisor to review your estate and determine the best course of action for you and your family.Jeffrey Apps & Tracy Tutag offer securities and investment advisory services through AXA Advisors, LLC (member NASD, SIPC) 1290 Avenue of the Americas, New York, NY 212-314-4600 and offers annuity and insurance products through an insurance brokerage affiliate, AXA Network, LLC and its subsidiaries. They can be reached at 926.6911 or tracy.tutag@axa-advisors.comVail, Colorado


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