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The Added Value of a Year-end Net Worth Summary

The value is so much more than the net dollars from assets minus liabilities. By keeping an accurate record of accounts, whose names are on the accounts, as well as the dollar value on a regular basis, you can make more informed decisions for the coming year, strategize for tax purposes, and make sure that your estate plan still reflects the beneficiaries you’ve chosen in case of a surprising demise.

With the major stock market changes recently, you may not be as well off as you think once you update your net worth. Meeting with your financial advisor to consider rebalancing your portfolio before the end of the year could improve your tax situation next April. If your asset protection plan contains a donor-directed trust fund, you may find you have fewer assets to donate this year. Checking the current dollar value of your assets also assesses if your estate plan still prorates the shares you want each beneficiary to receive as inheritances. If you are lucky enough in have major increases to your net worth, you may want to look into trusts with your estate planning attorney to protect privacy from probate which is public record.

Life happens when you blink. Think back over this year. You may have changed banks, bought or sold a house or property, added new family members through marriages or births, lost family members through divorces or deaths, changed jobs, and other major changes. These factors may require adjustments to your estate plan, and the sooner the better considering the “triple-demic” expected this winter – COVID, pneumonia, and influenza – any of which could take out someone of any age. Many pundits suggest you run your personal finances like your own business… well, it is your business! A regularly updated net worth helps you do just that.  Regardless of the size of your net worth, it’s good to know if you are growing your estate, treading water, or sinking into debt. A year-end net worth review can help you make decisions regarding big purchases, vacations, or even new job opportunities. Consider your team of advisors as your board of directors – financial advisor, accountant, and of course, your estate planning attorney. Let them help you run the “business” side of your life in the direction you want to head. Now that’s the added value of a net worth summary updated year after year.