What Am I Worth?

“Who Wants to be a Millionaire?” has been a popular, durable TV show for some time,but in real life a good question is, “Are you already a millionaire?” Asurprising number of us are, making long-term planning—and especially estateplanning—a must.

In 1995, the Federal Reserveestimated that 3 million American families had a net worth of at least $1million. That number surely grew in the unprecedented economic boom of the1990s. Despite the recession that followed, it is expected to more than doublein the next few years.

Many people are surprised to learnwhat they’re worth when they add it all up. To find out what you’re worth, add up the current worth of all of your assets, including:

• Liquid assets such as certificates ofdeposit, money market funds, bank accounts;
• Fixed assets, including bonds
• Stocks and mutual funds
• Retirement plans, such as 401 (k) plans,profit-sharing plans, etc.
• Personal assets, including your home,cars, etc.
• Insurance on your life
• Value of your business, rental propertyor other real estate.

The next step is to subtract your mortgage and other debt. If the resulting figure approaches $1 million, then some serious estate planning is in order. Federal death taxes begin on estates totaling $1 million (scheduled to rise to $1.5. million in 2004), and these taxes can besteep, as much as 50%. Fortunately, your lawyer can tell you how bypass trusts, generation skipping trusts, lifetime gifts, and other techniques can significantly lessen the tax load.

A Special Note for Spouses

You can't plan your estate if you don't know the facts about all the family assets.Yet, even in this era, lawyers say they still find that many clients who cometo them for estate planning advice don't have basic information about theirspouse's income. All too often, the client doesn't know how much the spouseearns, what benefits he or she is entitled to, or where the money is invested.Whatever the reason for this situation, you need to know this information when planning your estate. It's especially important to find out how property you and your spouse own is titled, including insurance and other beneficiary designations.

Many people might be afraid to cause a rift in the marriage by asking a spouse about financial affairs—especially if that spouse is the primary breadwinner in the family. The need to share information and plan ahead can be raised indirectly--through another family member, an attorney, or other trusted professional--but full knowledge of the family's assets should be part of any sound estate plan.