Most people think of estate planning as writing a valid will, and that is one crucial aspect of planning. However, estate planning includes many other considerations, whether or not to create trusts or include digital executors, for example. Also critical in estate planning is the accurate valuation of an estate. Some assets are easier to identify and value, while other assets are less obvious, yet still of great value. Accurately labeling the type of assets is important because specific types of assets are valued and/or distributed differently under Texas probate laws.
Tangible assets are what most people think of when they think of an inheritance, homes, cars, jewelry, furniture, for example. If it is tangible personal property, it can be seen or touched and moved without changing its form or function. A beneficiary who inherits a tangible asset will likely experience immediate benefits from that asset.
By contrast, intangibles assets are usually not physical or material but may nonetheless hold great value. Property or mineral rights are intangible assets, as are patents, business contracts, and IP licenses. Although money is something physical, Texas courts have determined that it is actually an intangible asset. Similarly, stock certificates and non-fungible tokens (NFTs) are intangible. Intangible assets may not provide immediate profit to beneficiaries, but they can be lucrative in the long-term. Estate planners often advise clients to distribute intangible assets in terms of percentages. Importantly, some intangible assets such as life insurance are not part of an estate.
Because tangible assets are managed differently than intangible assets, assets must be labelled accurately during estate planning. Working with an experienced probate attorney will ensure that all assets of an estate are distributed in a way that not only reflects the wishes of the testator, but also the true value of the estate.
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