Executors (usually an adult child) appreciate having an inventory already prepared when it's time to settle their parent's estate.
Reducing the emotional stress and time involved is a very good reason for having an inventory of your belongings now.
An article I've written, "Do It for the Kids", discusses this issue in detail.
But there is another reason to have an inventory now - one that could affect the value of your estate.
If you have an inventory now, you will have a thorough itemized list of your belongings.
Knowing that you'll be able to maximize your insurance claim if you have a loss brings peace of mind for you.
This is because you'll always know what was in your home, storage building and garage.
Without this document, your settlement will most likely not be sufficient to replace everything.
This is because you'll forget many items that will need to be replaced.
Once forgotten, and your claim is closed, you will not receive further funds even when you discover items you didn't list during your insurance claims process.
Then the domino effect sets in.
If you don't receive an adequate insurance settlement, where will you get the funds to recover? There are many options, all of which are not in your financial plan:
If you choose to withdraw the funds from your investment accounts, it will reduce the value of your estate - not only by the total dollar figure you needed to repurchase your items, but also the lost interest you would have earned on these funds.
This could alter your plans regarding what you were hoping to pass on to your children, grandchildren, siblings or charities.
Discuss this with your parents and encourage them to have an inventory of their belongings now, before they face the decisions listed above.
And while you're discussing the needs for an inventory with your parents - estate planning and disaster recovery - consider it for yourself as well.
Reducing the emotional stress and time involved is a very good reason for having an inventory of your belongings now.
An article I've written, "Do It for the Kids", discusses this issue in detail.
But there is another reason to have an inventory now - one that could affect the value of your estate.
If you have an inventory now, you will have a thorough itemized list of your belongings.
Knowing that you'll be able to maximize your insurance claim if you have a loss brings peace of mind for you.
This is because you'll always know what was in your home, storage building and garage.
Without this document, your settlement will most likely not be sufficient to replace everything.
This is because you'll forget many items that will need to be replaced.
Once forgotten, and your claim is closed, you will not receive further funds even when you discover items you didn't list during your insurance claims process.
Then the domino effect sets in.
If you don't receive an adequate insurance settlement, where will you get the funds to recover? There are many options, all of which are not in your financial plan:
- Withdraw the required money from a savings account
- Borrow funds from your 401(k) plan
- Stop placing your current deposit in your investment account
- Stop your deposits into your children's and/or grandchildren's college funds
- Place the purchases on credit cards
If you choose to withdraw the funds from your investment accounts, it will reduce the value of your estate - not only by the total dollar figure you needed to repurchase your items, but also the lost interest you would have earned on these funds.
This could alter your plans regarding what you were hoping to pass on to your children, grandchildren, siblings or charities.
Discuss this with your parents and encourage them to have an inventory of their belongings now, before they face the decisions listed above.
And while you're discussing the needs for an inventory with your parents - estate planning and disaster recovery - consider it for yourself as well.