Articles

Do You Know What You Own?

Americans' median household net worth (meaning half the households have more and half the households have less) is around $193,000, while the average net worth is just over $1 million, according to the Federal Reserve, the central bank of the United States.[1] The median gives a more accurate picture because it shows what most people are experiencing without being skewed by a small number of ultrawealthy Americans.

The Federal Reserve tracks household net worth as an indicator of the overall health of the US economy and to gain a long-term perspective that influences future monetary decisions. You should track your net worth for similar reasons. This process involves creating an inventory of your assets (everything you own) and keeping it updated so that it can be measured, analyzed, and readjusted to keep your financial and estate planning goals on track.

Majority of Americans Do Not Know Their Net Worth

Your financial plan and your estate plan are deeply intertwined. Trying to create an estate plan without a clear picture of your finances is like planning a journey without knowing your beginning point.

Do you want to ensure that your loved ones are taken care of when you are gone? Do you want to leave a gift to a charity you care about? Do you want to ensure that the money you have saved and the assets you have acquired benefit the people and causes you care most about? If so, start planning now. Your plan begins with an assessment of your net worth.

Many Americans are unsure about how to calculate their net worth—or even what it is.

Around half of Americans told Credit Karma they do not know how to calculate their net worth.[2] Sixty-seven percent also said they do not track their net worth, and nearly 20 percent said they do not know what actions to take to increase their net worth.[3] More than one in five believe the term net worth applies only to the wealthy.[4]

Net worth is calculated by subtracting your liabilities (what you owe) from your assets (what you own).

• Add up the value of all of your assets. Assets are the things you own that have value, such as cash, investments, real estate, and personal property.
• Add up the value of all of your liabilities. These are your debts, including credit card balances, loans, and mortgages.
• Subtract the total liabilities from the total assets.

While this calculation is straightforward, you cannot figure out your net worth if you do not have an accurate picture of everything you own and the value of individual assets, which can be trickier to calculate.

How an Asset Inventory Fits into an Estate Plan

To provide for your beneficiaries and fulfill other estate planning goals, such as charitable giving, you need to know how much your estate (everything you own) is worth—and therefore how much you have to give.

Compiling an inventory not only helps you measure, grow, and distribute your wealth; it also helps those who must step in if you become incapacitated (unable to manage your affairs) or when you pass away, such as your estate executor, trustees, and agents under a power of attorney decision-makers.

We can help you compile a comprehensive list of your assets and fill in any gaps. Your inventory should include the following information:

• Types of assets and detailed descriptions. Include as much information as possible about each asset, including the following details:
  • Bank accounts: The last four digits of the account number, the full legal name of the financial institution, and whether it is a checking, savings, money market, CD account, etc. Note if the account is held jointly with another person and specify their name and relationship. List the named beneficiary for the account and any contingent (backup) beneficiaries, if you have already completed these forms.
  • Investments: Name of the brokerage firm or investment company, the last four digits of the account number for each investment, the types of investments (stocks, bonds, mutual funds, ETFs, retirement accounts, annuities, etc.), and supporting information such as the number of shares owned. Specify whether the account is held individually, jointly, or in a trust and list the primary and contingent beneficiaries for each account, if you have already completed these forms.
  • Real estate: Complete street address, the legal description of the property as recorded in the deed, lender name, loan number, mortgage details (principal balance, interest rate, and monthly payment), ownership type, and annual property taxes.
  • Personal property: Vehicles (make, model, VIN, and loan information), art, antiques, coins, stamps, jewelry, and other collectibles (including any appraisals, provenance information, or insurance information), and items such as musical instruments or electronics with significant value.
  • Digital assets: Online banking and investment accounts, online payment platforms (e.g., PayPal), cryptocurrency wallets, domain names, intellectual property, and online businesses. Include documentation that proves ownership of these assets, such as crypto wallet addresses and keys.
• Acquisition date. Documenting when you acquired an asset can be helpful for tax purposes and tracking progress toward your financial and estate planning objectives.
• Present value. An inventory is a snapshot in time and needs ongoing review and updates. Use a professional appraiser for items such as antiques, art, jewelry, collectibles, memorabilia, and furniture.

Your Wealth Journey Starts Here

You need to know the value of everything you own to grow your net worth. You also need to know how much wealth you have to ensure that your estate planning wishes are achievable.

Depending on your age, you could have years or decades left to acquire more assets, pay down your debts, and grow your wealth so that you have enough financial resources to fulfill your wishes by the time your estate plan takes effect.

You cannot get to where you want to go on your wealth journey if you do not understand where you are right now. The first step of this journey is creating a current, comprehensive asset list and meeting with an estate planning attorney.

[1] Jeannine Mancini, If the Average American Household Is a Millionaire with a Net Worth of $1.06 Million, Why Do People Feel So Broke?, Yahoo!Finance (Oct. 28, 2024), https://finance.yahoo.com/news/average-american-household-millionaire-net-193035068.html.

[2] Americans Have a Net Worth Problem, and It's Not Positive, Creditkarma (Apr. 17, 2023), https://www.creditkarma.com/about/commentary/americans-have-a-net-worth-problem-and-its-not-positive.

[3] Id.

[4] Id.

Approximately three-fourths of Americans do not have a basic will.[1] Many of the same people also have children under the age of 18, which underscores a major misunderstanding about estate plans: They can accomplish much more than just handling financial assets (money, accounts, and property).

One of the most important estate plan functions for parents of minor children is the ability to provide specific guidance about how their children will be cared for and who will care for them in case something happens to the parents.

To account for all emergency contingencies concerning you and your children, your estate plan should form a comprehensive safety net that addresses your children's care needs and protects them from the unthinkable.

Three Tools You Need If You Have Minor Children

As parents, we instinctively strive to shield our children from harm and set them up for success, now and in the future.

While we cannot predict the future, we can prepare for it. Estate planning is a crucial step in this preparation, especially when minor children are involved. It is not only about distributing your money and property after your death; it is also about establishing ways to care for your children if you no longer can.

Your death or incapacity (inability to manage your affairs) from a sudden illness or accident is a situation that you would likely rather not think about but must consider in preparing for worst-case scenarios that could lead to a court deciding who cares for your child.

Data on parental mortality is sobering: More than 4 percent of minor children have lost at least one parent.[2] If you wait too long to create your estate plan, it could be too late. More than any other reason, Americans cite procrastination as the reason they do not have an estate plan.[3] Procrastinating on creating your estate plan could mean it will not be there when you—and your children—need it.

To safeguard your children's future, three estate planning tools are particularly important: a will, a power of attorney for minors, and a standalone nomination of guardian.

Last Will and Testament

A last will and testament (also known as a will) is a cornerstone of any estate plan, but it takes on added importance when you have minor children. Your will outlines your wishes regarding the distribution of your money and property after your death. It also allows you to do the following:

• Name a guardian. A guardian is the person you want to raise your children if you and the other legal parent are deceased. The most common choice of guardian is a close family member, such as grandparents or siblings, or a close family friend.
• Establish an inheritance for your children. Because minors cannot directly inherit money and property over a certain limit set by state law, there needs to be a way to handle their inheritance for them until they reach legal adulthood. A testamentary trust (one that is created in a will) is a safe way to set aside money and property for your minor children. The terms of the testamentary trust allow you to name a trustee to oversee the inheritance. Another benefit of a trust is that you can determine when the children receive their inheritance and how they will receive it.
• Name an executor. An executor (or personal representative) is the person you designate to carry out the instructions in your will, including managing your estate and distributing your money and property. They might work closely with the guardian and the trustee to ensure that your instructions are executed smoothly and according to plan. The same person may serve in more than one role in your estate plan (e.g., guardian and trustee, guardian and executor).

Power of Attorney for Minors

A power of attorney for minors, sometimes called a designation of standby guardian or something similar depending on the state, is a legal document that empowers a chosen individual (your agent or attorney-in-fact) to act for your minor child on your behalf. This person steps in to make decisions regarding your child's care if you become incapacitated or unavailable.

The power of attorney can grant the agent broad authority to handle various aspects of your child's life, including the following:

• Healthcare: making medical decisions, consenting to treatments, and accessing medical records
• Education: enrolling your child in school, making educational choices, and attending school meetings
• Finances: managing your child's finances, including accessing bank accounts, applying for benefits, and handling their inheritance
• Legal matters: representing your child's legal interests in matters such as a custody dispute, personal injury claim, or inheritance matter
• Daily care: meeting your child's food, shelter, clothing, and other basic needs

Although the power of attorney grants the agent significant authority, there are limits to what it permits. The agent cannot consent to the child's marriage or adoption. In addition, many state laws impose expiration dates on these documents (e.g., six months, one year), so it is important to review and update them regularly to ensure that they remain valid.

Revocable Living Trust

In addition to a power of attorney, nomination of guardian, and will, the parents of minor children might consider a revocable living trust that holds their accounts and property during their lifetime and distributes them after their death.

You (the parent) maintain control of the accounts and property in the trust while you are alive as the current trustee. You can change the trust's terms as needed because you are the trustmaker, and this type of trust is revocable. A revocable living trust can help avoid probate and give your children faster access to the resources they need. You can also specify how and when your children receive their inheritance, name a successor trustee to continue management of the trust if you suffer incapacity, and provide financial support for the guardian, further synergizing your estate plan.

How These Tools Work Together—and What Can Happen If You Do Not Plan

These three estate planning tools are not interchangeable; they are complementary and designed to work together to address immediate and long-term needs in a range of potential scenarios.

Imagine a scenario where both parents are in a car accident. One parent dies, and the other is severely injured and temporarily incapacitated. The agent named in the temporary power of attorney or delegation of standby guardian immediately steps in to temporarily care for the children.

If the injured parent passes away, the designated guardian (who may be the same person as the agent under the temporary power of attorney) named in the will or standalone document can provide the children with a stable permanent home. The will can be structured so that the children's inheritance is managed through a trust that specifies how and when their inheritances should be spent and distributed.

Failure to have any one of these estate planning tools can lead to complications and unintended consequences for your minor children. For example:

• A missing temporary power of attorney could lead to delays in, or the inability to, make emergency decisions about medical treatment.
• A missing guardian nomination document could lead to a court choosing a guardian you would not have chosen. Ostensibly, the choice a judge makes will be in the child's best interest, but do they really know your child and family dynamics well enough to make this choice?
• A missing will can also lead to a court appointing a guardian who is someone other than your first choice. In addition, your children may not receive the inheritance you intended in the way that you intended, and you lose the ability to specify how your money and property are used for their benefit. Further, they will end up getting what is left of their inheritance outright when they reach the age of majority (18 or 21, depending on the state).

Other Planning Tools and Tips for Parents

Parents should understand that they can only nominate a guardian for their child, not legally appoint one; the court has the final authority to decide, though it gives significant weight to the parents' nomination.

If there is evidence that your chosen guardian is unfit or unable to provide proper care, the court may appoint a different guardian in the child's best interest, even if it goes against your wishes. There is also the chance that a family member could contest your guardianship choice or your first choice of guardian is unavailable.

These outcomes are unlikely, but since they could undermine your wishes, there are additional steps you can take to minimize the risk and strengthen your case.

• In a separate letter, sometimes referred to as a letter of intent, clearly state your choice of guardian and provide a detailed explanation of why you believe this person is the best fit. Speak to their qualifications, relationship with your children, and ability to provide a stable and loving home.
• Name alternative guardians in case your first choice is unable or unwilling to serve.
• To prevent misunderstandings and reduce the likelihood of a challenge, have open and honest conversations with family members about your guardianship decision. Explain your reasoning and address any questions or concerns they may have.
• Have your will properly executed according to your state's laws. To be legally binding, they may need to be witnessed and notarized and meet other requirements.

Fitting Together the Pieces of Your Estate Plan

Each part of an estate plan has a role to play, but they work best when considered as parts of a larger plan that addresses big issues such as the well-being of your minor children.

A will, temporary power of attorney, and standalone guardian document are not interchangeable; they are complementary. Incorporating all three into your plan, alongside other strategies such as a revocable living trust and a letter of intent, addresses the immediate and long-term needs of your minor children in any eventuality.

If you have minor children, estate planning is a necessity. Do not leave your children's future to chance. Consult with us to create a multipoint plan that protects you and your family.

[1] Victoria Lurie, 2025 Wills and Estate Planning Study, Caring (Feb. 18, 2025), https://www.caring.com/caregivers/estate-planning/wills-survey.

[2] George M. Hayward, New 2021 Data Visualization Shows Parent Mortality: 44.2% Had Lost at Least One Parent, U.S. Census Bureau (Mar. 21, 2023), https://www.census.gov/library/stories/2023/03/losing-our-parents.html.

[3] Lurie, supra note 1.

A home is often one of the most important assets that people own. Therefore, most people want to stay in their home until they die and then have a loved one receive it. One common way to pass a home to loved ones is through a will. However, transferring property with a will requires probate, which is generally considered a lengthy, costly, and public court process that many actively seek to avoid.

There are several ways an estate plan can transfer property without a will or probate court involvement when the owner passes away. In addition to a lifetime transfer of the property (by sale or gift), certain types of deeds can be used that take effect only upon the property owner's death and do not subject the property to probate. However, using these deeds for probate avoidance can potentially introduce new issues. A trust-based estate plan may be a better option if the goal is simply to avoid probate.

Home Ownership and Inheritance

We are living through one of the largest intergenerational wealth transfers in history. Roughly one in six Americans expect to receive an inheritance in the next 10 years, and among those, nearly half anticipate inheriting property such as a house.[1]

According to Pew Research, in 2021, nearly two-thirds of US households lived in a home they owned as their primary residence.[2] Homeowners have, on average, around $174,000 in equity in their homes—more than double the value of their next most valuable asset, retirement accounts, which have an average value of $76,000.[3]

Real Property, Legal Rights, and Trusts

A key concept in estate planning is honoring people's wishes by helping them control, as much as possible, what they own and what happens to it after their death.

An estate plan enables a homeowner to decide what happens to their property after they pass away, ensuring that it goes to the person (or people) they choose in a manner of their choosing, whether that means keeping it in the family and setting limits on its use or transferring the property to a beneficiary without restrictions.

Options for Transferring Real Property at Your Death

Estate planning is highly flexible, offering multiple ways to satisfy someone's wishes for what happens to their money and property when they die, each with a mix of benefits and downsides.

To avoid probate, there are many ways to transfer real property, both during the owner's lifetime and at their death. Some solutions can cost less than a trust, but as the examples below show, they can also have significant downsides and risks.

Deed-Based Transfers

A deed is a legal document that transfers real estate ownership from the current owner (the grantor) to another individual or entity (the grantee). Several types of deeds can be used to gift real property at the grantor's death. They include the following:

• Life estate deed. A life estate, created through a life estate deed, gives a person the right to live in and use a property for their lifetime. The life estate's owner is called the life tenant, and the person who receives the property after the life tenant's death is called the remainderman. Some people may consider using a life estate deed to retain the ability to live in their own home while they are alive, allowing them to name the remainderman who will receive the property at the life tenant's death. While a life estate avoids probate, the creation of the life estate can be undone only if the remainderman agrees. Because the goals, legal rights, and responsibilities of the life tenant and the remainderman may differ, disagreements may arise between them over, among other things, property use, improvements, or maintenance. In addition, a life tenant cannot liquidate or sell the property without the remainderman's agreement.
• Enhanced life estate deed. Also known as a ladybird deed, an enhanced life estate deed allows the grantor (who becomes the life tenant) to retain the ability to live in their home and the right to use, mortgage, sell, gift, and otherwise convey the property during their lifetime without the signature or blessing of the remainderman. When the life tenant dies, if they still own the property at their death, the remainderman will receive it. This provides flexibility for a property owner wanting to name who will receive the property at their death while retaining control over it throughout their lifetime. However, this type of deed is not available in all states. North Carolina does allow ladybird deeds.
• Beneficiary deed. Also known as a transfer-on-death (TOD) deed, a beneficiary deed automatically transfers the deeded property to a named beneficiary at the time of the property owner's death. The transfer avoids probate, and the deed can be revoked anytime during the owner's lifetime. However, not all states allow beneficiary deeds. North Carolina does not allow transfer-on-death deeds.

Again, not all of these types of deeds are legally valid in all states. An experienced estate planning attorney can explain what tools are available to you and discuss the benefits and potential risks.

Downsides to Using a Deed to Transfer Property at Your Death

There is no creditor protection for your beneficiaries. When a deed transfers property to a beneficiary, that property goes to the beneficiary outright. There are no strings attached and no protections. For instance, if the beneficiary were to receive the property during a bankruptcy proceeding, it might be used to satisfy the creditors because it is now considered the beneficiary's property.

There is no protection if the beneficiary is disabled or unable to manage their affairs. As previously mentioned, when the beneficiary receives the property, it is theirs. However, if they receive the property when they cannot manage their affairs, its management falls to another person. It may be handled by a court-appointed guardian or conservator or an agent under a financial power of attorney, who can do whatever they want with it (as long as it is in the incapacitated beneficiary's best interest). Also, if the beneficiary receives any means-based assistance, the sudden inheritance could jeopardize those benefits by placing the beneficiary above any applicable asset threshold.

There are no protections for you if you cannot manage your affairs. These deeds are a sufficient way to transfer property after you are deceased. However, if you cannot manage your affairs during your lifetime, the named beneficiary or remainderman has no access to or interest in the property to help you manage it until you pass away. You will have to rely on an agent under a financial power of attorney (if you have one) or a court-appointed guardian or conservator to manage the property on your behalf.

Your beneficiary is free to do what they want. As already discussed, if you use a deed to transfer ownership at your death, your beneficiary will receive the property outright. You cannot add any conditions or requirements regarding the property or its use. The beneficiary can sell, mortgage, or use it as a rental property (subject to applicable zoning restrictions). It is their property to do with as they please. Their intended use of the property may not align with your wishes.

Using a Trust to Transfer Real Property

While you may view your home as a place to live and not as an investment or financial vehicle, that perception can change when you pass away and the home passes to a loved one, particularly if that loved one already has a primary residence.

A beneficiary who inherits a home may decide to sell the property; turn it into a rental; renovate the property to use it as a farm or business; sell off individual structures on the property (such as a barn or historic structure); cash in on its natural resources (e.g., allow timber to be harvested); or even tear down the original home and build a new one in its place. When more than one beneficiary inherits the property, disagreements about how to best use it could arise.

You might not care what happens to your home when you are gone. However, if you want to set restrictions on its use for any reason—whether those reasons are sentimental or have the practical intent of reducing conflicts among multiple beneficiaries—you must use the right estate planning tool.

Consider placing your home in a living trust that legally owns the property, with you serving as a trustee and being the current beneficiary during your lifetime. This allows you to stay in your home—and maintain control over it—while you are alive. When you pass away, the home does not go through probate because you do not technically own it. Instead, a successor trustee assumes legal responsibility for the property and manages it or gives it away in accordance with your trust's terms.

The trust terms can be highly detailed, and limitations can be set on how the property can be used. You can stipulate, for example, that the property must be shared as a family vacation home and cannot be used for business purposes. You can require that the house be held in the trust until your minor children reach a certain age so they can remain in the home after your passing. While the trust owns the property, your terms will govern its use. As soon as the property is distributed from the trust, you lose all control over it.

The Best Way to Transfer Property for Every Situation

Estate planning is a highly personal process that must consider many factors, each of which can have multiple solutions that present a unique set of benefits and drawbacks.

Avoiding probate is usually just one estate planning consideration among many, and it may not be desirable in every situation.

Determining the best way to pass down real property at death depends on your preferences and family circumstances. An estate planning attorney can explain each available option and help you decide what is best for your situation.

[1] The "Great Wealth Transfer" is underway but nearly half expecting an inheritance are not ready to manage it, finds New York Life Wealth Watch Survey, New York Life, July 19, 2023, https://www.newyorklife.com/newsroom/2023/new-york-life-wealth-watch-great-wealth-transfer.

[2] Rakesh Kochhar and Mohamad Moslimani, 4. The assets households own and the debts they carry, Pew Research Center, Dec. 4, 2023, https://www.pewresearch.org/2023/12/04/the-assets-households-own-and-the-debts-they-carry.

[3] Id.

If you are like most Americans, you have at least one to-do list. You might also use lists when you are shopping, brainstorming, setting goals, and planning for events.

To-do lists, grocery lists, bucket lists . . . the list goes on. However, there is one crucial list that often gets overlooked: the list of trusted professionals and decision-makers who can step in for you during a time of need.

This list can be a centralized document of all the key players in your life who advise you on a regular basis or are legally designated to carry out your affairs when you become incapacitated (unable to manage your affairs), pass away, or experience an emergency. This simple yet powerful tool can help you, your professional team, and your loved ones be better prepared for future scenarios and more smoothly navigate challenging times.

Your List of Professionals

Your list of professional advisors should contain contact information for the following important people in your life:

• Accountant
• Financial advisor
• Insurance agent
• Spiritual advisor
• Other professionals you routinely work with, such as legal and medical professionals

You will also want to include on this list the following key decision-makers in your estate plan documents:

• Trusted family and friends, in particular those whom you have designated as an agent under a power of attorney
• Your estate executor/personal representative
• Trustee(s) of your trust(s)
• Guardian of your minor children

For each contact, provide the following information:

• Full name
• Area of expertise or relationship to you (e.g., long-term care insurance agent, son, etc.)
• Contact information (phone number, email address, mailing address)
• Account or policy numbers for any assets under a professional's management (where applicable)
• Any authority that has been given to a person (agent under a power of attorney and, if so, the type(s) of power granted, such as financial, medical, general, or springing)

Why You Need an Advisor List

A list of professionals can prove invaluable for your loved ones if you pass away or a health crisis leaves you incapacitated. Without it, your loved ones may be left to navigate a maze of financial accounts, legal documents, and critical decisions. Having a centralized repository of who's who in your personal and professional lives can save your family time, money, and stress when managing and winding down your affairs. Here is a look at who may need to be involved and what they might need to know:

• The person you designate as an agent in your financial power of attorney may need to know whom to contact to oversee and manage your finances.
• Your executor or personal representative should know your spiritual wishes when you pass away. Your executor also needs to understand all of the transactions you are a party to so that your estate can be settled.
• The trustee of a trust you created may want to work with your financial advisor or your attorney to manage the trust's accounts and property in accordance with your wishes and legal requirements.
• Your healthcare proxy (the agent under your healthcare power of attorney) might need to reach out to your providers about treatment options and end-of-life decisions.

In addition to incapacity and death, there are everyday situations when you may need ready access to this list.

For example, if you must travel unexpectedly, get caught in a natural disaster, are hurt in an accident, lose your smartphone or internet access, or are forced to deal with a family crisis, you might need to reach out to people on the list who can act on your behalf or otherwise provide assistance. However, their contact information may be stored in different locations and hard to locate in a crisis. A single list containing this information is more accessible and efficient.

Ensure that the list can be accessed by the right people at the right time. Keep it in a secure location, such as a home safe or encrypted digital file, where your advisors and trusted decision-makers can obtain a copy via instructions and permissions you provide to them ahead of time. You might also want to include a copy of the list with other important documents, such as your estate plan, so that designated individuals such as your executor or trustee can refer to it. Consider keeping a copy of the list on file at your advisors' offices as backups and for safekeeping.

Add Making a List of Professionals to Your To-Do List

You may assume that your loved ones know whom to contact at a critical moment or that this information is readily available. Compiling a contact list can also get lost in the shuffle of bigger tasks such as making a will, setting up a trust, paying your taxes, and following a financial plan.

A list of professionals and key decision-makers is an underutilized planning tool that complements your existing documents and goals. This type of list is not just about names and numbers. It ensures that you, your loved ones, and your team can quickly and seamlessly collaborate for your best interests in difficult situations, both expected and unexpected.

Life and relationships change. The next time you meet with us, check that your advisor list is accurate, up to date, and stored in a secure, accessible place—and check this important task off your to-do list. If you have not already created one, we can assist you.

Myth 4: Trusts are only for the wealthy.

Trusts are not about how much you own. They are about how much time, expense, and stress you may be able to save your family. A trust is a legal arrangement in which one person or institution, called a trustee, holds and manages assets for the benefit of one or more beneficiaries according to the terms you set out in the trust document. Trusts are not just for the wealthy. They can be a helpful tool for many homeowners by helping to avoid probate, simplifying the transfer of property, and providing clear instructions for how the home and other assets should be managed if something happens to you. Even a modest estate can become complicated when there are multiple beneficiaries, a mortgage, minor children, or other financial responsibilities to consider.

A trust can also help coordinate asset management, work alongside life insurance planning, and make it easier for a surviving spouse or other loved one to access and manage property when needed. Speaking with an estate planning attorney can help you determine whether a trust makes sense for your situation and how it can fit into your overall plan.