# Calculating the Value of Everything You Own for Estate Planning

Before you can plan how to distribute your assets after your death, you need to understand what your estate is. In the most casual sense, your estate is your stuff or all your possessions. In addition to understanding what your estate is, you also need to know what your estate is worth. First you make a list of positive balance items such as:

• Cash, checking and savings accounts

• Certificates of deposit (CDs)

• Stocks, bonds, and mutual funds

• Retirement savings in your Individual Retirement Account (IRA), 401(k), and other special accounts

• Household furniture (including antiques)

• Clothes

• Vehicles

• Life insurance

• Annuities

• Jewelry, baseball card collection, autographed first edition of Catcher in the Rye

You calculate your estate’s value as follows:

1. Add up the value of all of the positive balance items in your estate. What’s that, you say? You don’t own a house or any other real estate, so you think that you don’t have an estate? Not so fast! In a legal sense, all kinds of items are considered to be your property.

2. Subtract the total value of all of the negative balance items, such as the outstanding balance of the mortgage you owe on your house or a vacation home, the outstanding balances on your credit card accounts, taxes you owe to the government, or any IOUs to people that you haven’t paid off yet

Determining your estate’s value can be more complicated than creating two columns on a sheet of paper or in your computer’s spreadsheet program and doing basic arithmetic. If you are a farmer, for example, you need to figure out the value of your crops or livestock. If you own a small one-person business, you need to calculate what your business is worth.

Your estate may also include other items that you don’t have in your possession, such as:

• Any future payments you expect to receive, such as an insurance settlement or the remaining 18 annual payments from that \$35 million lottery jackpot that you won a couple of years ago

• Future inheritances

• A loan you made to your sister to help get her business started (that she plans to repay to you when her enterprise starts turning a profit