When most people think of estate planning, we often think of wills and powers of attorney.
These are two extremely important parts of the estate planning process – but it’s more than that! Estate planning includes putting a plan in place, so your wishes will be honoured when the time comes.
One of the biggest components of estate planning is making sure your assets and belongings end up in the hands of the people you choose.
While having a will is the first step, creating an asset list can ensure the process is smoother for your loved ones. Read on to learn more about asset lists and why they’re an important part of your estate plan.
What Is An Asset List?
An asset list is simply a list of all the assets that you own. Unlike a will, an asset list is not a legally-binding document but will serve as a blueprint for your loved ones. This is where you can make things easier on your family and executor by organizing key information they will need when closing up your estate.
How Does An Asset List Help Your Executor?
The executor of your will is responsible for helping to carry out all the wishes you’ve outlined in your last will and testament. They manage the settlement of your estate and help distribute assets to your beneficiaries.
In your will, you’ll outline who you’d want your assets to go to (also known as your beneficiaries) and any specific assets you’d like to gift to someone special in your life. But an asset list helps your executor understand what other assets exist that need to be distributed.
Your executor is also responsible for closing any key accounts and settling any debt, so having all the key information will make the process much simpler.
What Should Be Included In An Asset List?
Your asset list should include everything you own of sentimental or financial value. You’re probably thinking, “that’s a lot of things to list out!”. You don’t need to itemize every single thing in your home, but you should certainly account for the important things. This way your executor isn’t stuck running in circles trying to figure out what you owned at the time of your death.
There are three main types of assets that should be included in your list of assets
Physical assets include things like property, vehicles, and other tangible items that you’d like to make your executor aware of.
In your asset list, you should include key details around these physical assets. Including, how your executor can locate them, type of ownerships, specific details and more. Common physical assets include motorized vehicles, property, artwork etc.
These don’t necessarily have to be items of high financial value. Even if you own collectibles or sentimental items, it will be helpful to outline these for your executor so they don’t get lost in the shuffle.
Your financial assets are accounts of financial value that you own. Financial assets can be tricky because your executor may not even know they exist. By providing the location of your accounts and financial assets, your executor will easily be able to connect with financial institutions when settling your estate.
Some financial assets to include in your list of assets include:
- Credit card accounts
- Investment and savings accounts
- Businesses interests (stocks and shares)
- Outstanding debt accounts (line of credits, loans)
Remember, just because you don’t have significant financial assets, doesn’t mean you shouldn’t have a will. Learn more about why you need a will →
Most Canadians hold several insurance policies. Similar to financial assets, it’s easy for these to go unnoticed or missed in the estate settlement process.
Depending on the type of policy, some may be more or less important at the time of death.
Some common types of insurance policies include:
- Health insurance
- Home/mortgage insurance
- Life insurance
- Loan insurance
- Vehicle insurance
Like your other assets, you'll want to include details such as the type of insurance, the insurance company, and broker information, if applicable.
Remember that often insurance policies have beneficiaries appointed directly through your policy. While it’s important for your executor and loved-ones to be aware of these policies, they do not flow through your estate. The beneficiaries listed on the policy will supersede any wishes you’ve outlined in your will.
Your asset list should be as unique as you. While most assets fall under one of the above categories, you may have other assets you’d like your executor to be aware of.
Some other things that can be included in an asset list include:
- Digital assets - including social media accounts, email accounts etc.
- Sentimental items - for example, your favourite guitar or a piece of furniture
- Crypto assets - including cryptowallet details
Learn more about How To Create Your Asset List →
Can You Just Include All Your Assets In Your Will?
You do not need to specifically list out all your assets in your will. Your will already covers your umbrella estate (all the assets you own).
While yes, you can theoretically list out all your assets in your will, a detailed list of assets is typically not included. Here are the two main reasons why you don’t list out all of your assets in your will:
- When your will goes through the probate process after you pass away, everything in your will becomes public domain. Listing out all your assets in your will, means that the public is able to know what assets you held at the time of your death. Most people don’t want this.
- Your list of assets changes often. By not including it in your will, it’s easier to make changes, since your asset list doesn’t need to be witnessed or signed. If everything is listed out in your will, you’ll need to update your will every time you purchase or sell an asset. This can get time consuming and costly, since every update to your will requires you to print, sign, and witness your documents.
The only time you want to mention specific assets in your will, is if you’d like to make it a specific gift. (i.e. You want your red Corvette to go to your brother after you pass away.) Otherwise, everything else will be distributed as part of your residual estate according to your will .
It’s best practice to store your detailed list of assets with your will. This will make it easier for your executor to locate.
Can You Gift Assets To Loved Ones In Your Asset List?
Your list of assets is not a legally-binding document. If you would like to assign any assets as gifts to specific people, you will need to do this in the specific gifts section of your last will and testament. An asset list meant to complement your will to help your executor and loved ones navigate the estate settlement process.
Do You Need An Asset List For Your Will To Be Legal?
No – your last will and testament is a separate document. As long as you’ve met the requirements for a will to be legally valid, your will is legal.
While it’s not required to have an asset list for your will to be legal, the process of estate settlement can be complicated and time consuming. By creating a list of assets to store with your will, you’ll enjoy peace of mind knowing that your executor and loved ones have a blueprint to help them navigate the process.
Ready to create your asset list? Willful helps you create your will and asset lists from the comfort of your home. Start for free today →