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Current Assets At a Glance

Current Assets At a Glance

When officials are evaluating and determining the value of a deceased individual’s estate, only his/her current assets will be analyzed. A current asset is a tangible asset or an intangible asset that is included in an individual’s estate at the time of his/her death. Past assets are not included in an individual’s estate inventory. 
Therefore, if an individual was once wealthy or owned many tangible items, his/her estate will only encompass the possessions that he/she owns on the day that he/she dies. As a result, his/her estate can not be subject to tax for assets that he/she possessed in the past. Current assets, sometimes referred to as countable assets, are assets that are usually inherited by loved ones of the deceased. Determining the market value of current assets helps to conclude the financial worth of an individual at the time of his/her death. 
The term current assets is most frequently used to refer to the assets that a company possess, however, it can also be used to describe the assets included within an individual’s estate at the time that he/she died. For example, if an individual owned a home, this real estate is considered to be a current asset. 
Any motor vehicles that he/she possessed are also current assets, as are any monetary funds or personal belongings. Following an individual’s death, all of his/her current assets are evaluated, in order to determine the total value of his/her estate. If his/her estate exceeds a specified amount, the estate will be taxed by the state government, and may also be taxed by the federal government. 

Tangible Assets vs. Intangible Assets

Tangible Assets vs. Intangible Assets

When an individual dies, his/her estate will be evaluated in order to determine the total value of his/her assets. This evaluation will not only consider an individual’s tangible assets, but also any intangible assets that may exist. Therefore, it is important for an individual to understand the difference between tangible assets and intangible assets. 
A tangible assets is something that exists physically. This type of asset can usually been seen or touched. An individual who inherits a tangible asset will likely benefit from this asset immediately. A house and a motor vehicle are two examples of tangible assets that are frequently included in inheritances. Other types of tangible assets include jewelry, furniture, monetary funds, retirement funds, and pensions. A tangible asset will be allocated to a relative or a friend following an individual’s death, either based upon the specifications included in his/her will, or the laws or intestacy.
An intangible asset is an asset that does not physically or materially exist. Though an individual may not be able to view or touch an intangible asset, it can still be extremely valuable. In most cases, it is companies that possess intangible assets, such as business contracts. 
However, there are some instances in which an individual can hold this type of asset. Some examples of intangible assets that may be owned by an individual include patents, trademarks, and copyrights. Although an individual may not be able to observe the benefits of these assets immediately, they can be very advantageous. Like all assets, an individual may bestow intangible assets on a loved one in the event that he/she dies. 

An Overview of Assets

An Overview of AssetsAsset Valuation

Asset valuation is the process that is used to determine the value of an individual’s estate after he/she has died. Following the death of an individual, his/her estate will be subject to asset inventory, which is completed by the state in which he/she lived. This process must be complete for tax purposes.

Total Assets

When an individual dies, his/her estate will analyzed and an inventory will be taken, to determine whether an Estate Tax Return on total assets must be filed. In order to determine whether a federal estate tax return or a state estate tax return most be file, the value of an individual’s total assets must first be concluded.

Asset Protection

Asset protection is often difficult to achieve, and even offshore asset protection may not be successful in avoiding estate tax. If an individual wishes to avoid estate taxation following his/her death, he/she must be strategic in his/her protection techniques. For example, he/she can gift a specified amount of money to loved ones annually, without tax.

Asset Tracking

When an individual is developing an will or an asset protection plan, he/she should consider asset tracking and asset recovery. If these aspects are overlooked, loved ones may receive a much smaller inheritance than intended. Working with an estate lawyer and frequently updating his/her will, will help an individual to establish an effective asset protection plan.

Asset Allocation

Asset allocation is a process that occurs during an individual’s life, and following his/her death. Some individuals, specifically those who have extensive assets, are meticulous regarding allocation, creating asset labels and thoroughly researching all investment opportunities. This will help his/her estate to grow, and he/she should determine how to distribute these assets following his/her death.

Tangible Assets vs. Intangible Assets

An individual can possess both tangible assets and intangible assets. In the event that he/she dies, both of these types of assets will be distributed to his/her loved ones, either by the regulations specified in intestacy legislation or based upon a legal will drafted by the deceased. There are important differences between each of these types of assets.

Return on Assets

Federal and state tax return on assets and estate taxes have a large impact on estates that include small businesses. A small business is considered to be an asset that makes up a part of an individual’s estate. Therefore, when he/she dies, the state will use an asset turnover ration to determine the business’s asset turnover and the value of the business.

Current Assets

When an individual’s estate is evaluated, it is only his/her current assets that will be included in the asset inventory. Past assets, or assets that were once owned by the deceased individual, do not comprise his/her estate at the time of death. Any asset owned at the time of death, whether tangible or intangible, is a current asset.

Capital Asset Pricing Model

When individuals actively seek to build their estate and increase their capital assets, they must ensure that they practice effective capital asset management. Failure to manage capital assets successfully can result in devastating loses. One way in which an individual can assess stock investments is my utilizing the capital asset pricing model.

Fixed Assets

A fixed asset is an asset that is necessary for a business to operate, but not sold to obtain a profit.  In the event that a small business owner dies, fixed assets and fixed asset turnover associated with his/her business will be evaluated, in order to determine the value of his/her business. A successful business can increase the value of his/her personal estate.

Liquid Assets

During the asset valuation of an individual’s estate, the liquidity of all of his/her assets is determined. The market value of these assets is used to determine the complete value of an individual’s estate. In many instances, a large portion of an individual’s estate will be made of liquid assets, which include monetary funds and investments.

Asset Finance

The term asset finance, sometime called asset based financing, is a branch of finance that deals with asset backed investments. In order for an individual to expand his/her estate, he/she must practice successful financial asset management. One example of when this may occur is when an individual obtains a mortgage to purchase a home.

Net Asset Value

During the process of asset pricing, the value of an individual’s assets are obtained, in order to determine the value of his/her estate. However, the value acquired from this process is not necessarily correct, as an individual’s debts may need to be taken from the estate, significantly reducing the net asset value of his/her estate.

Asset Based Lending

Asset based lending is a type of financial strategy that allows an individual to acquire an extensive loan for a desired asset. In order for an individual to obtain a loan from asset based lenders, he/she must offer a specified asset as collateral. In the event that he/she is unable to pay his/her debt to the lender, the lender will take that asset.

Asset Backed Securities

Much like bonds, asset backed securities are investment opportunities that can allow an individual to expand his/her estate, and increase the value of his/her estate. When an individual purchases asset backed securities, his/her investment is placed in a pool of finances, subsequently used by lenders. Overtime, he/she is re-paid for his/her investment, with interest.

Asset Background

An asset is a possession that maintains an exchange rate. An individual’s estate is comprised of all of his/her assets. Some common types of assets that are included within an individual’s estate are real estate, motor vehicles, and monetary funds. When an individual dies, his/her assets are distributed to his/her relatives.

Asset Bubble

An asset bubble occurs when the cost of an asset increases significantly, due to high demand for this commodity. An economic bubble can have devastating effects on the economy, as seen with the 2008 credit crisis. In the event that an asset bubble occurs, the effects can destroy an individual’s estate, causing him/her to lose valuable assets.

Asset Protection Trusts

For individuals who are concerned about the security of their assets, an action protection trust may be an effective method to secure and protect certain assets. There are a variety of different action protection trusts, and there are many different reasons why an individual may choose to establish a trust.

Toxic Asset

A toxic asset is a type of asset that is not functional because of a severe decline in the asset’s value. If an individual invests in a toxic asset, he/she may lose a significant portion of his/her estate. Toxic assets became a major concern during the economic crisis that occurred between 2007 and 2010.

Impairment of Assets

The impairment of assets is one event that can cause an individual to lose important financial assets. When an asset is impaired, it experiences a sudden decline in value. As a result, an individual who acquired in this asset may not be able to recovery the funds that he/she invested in this commodity.

Asset Valuation at a Glance

Asset Valuation at a Glance

When an individual dies, his/her estate must be assessed for tax purposes. When a individual inherits assets from a deceased individual, an estate tax is placed on the property that he/she acquires. In many instances, an estate will only be subject to estate tax if the asset valuation finds that the estate is worth a certain amount. In some cases, an individual may be entitled to an estate tax return from a federal government. 
An asset inventory will be taken following an individual’s death, regardless of the size of his/her estate. The procedure will be conducted by the state in which an individual lived, following guidelines listed in the Internal Revenue Code. This evaluation is an essential aspect of estate distribution, and must be completed before the assets are distributed. 
When asset valuation occurs, all of the assets owned by a deceased individual will be valued at their market price, or fair market value. The market value that is used is the fair market price of these assets on the date that the owner died. All of an individual’s assets will be subject to asset inventory, regardless of their location. Therefore, even if property is located in another state or another country, it will be subject to asset inventory and valuation. 
The precision that is used when determining the value of an individual’s estate will vary depending upon the state in which he/she lived. All assets are included in this inventory, including real estate, motor vehicles, jewlery,  furniture, retirement funds, securities, life insurance, and income tax refunds, just to name a few.

Understanding Return on Assets

Understanding Return on Assets

Following an individual’s death, his/her estate will be evaluated and an inventory of his/her assets will be established. This process is used to determine the total value of an individual’s estate, and whether or not a tax return on assets that comprise the estate must be filed. All of an individual’s assets are included in this evaluation, including any motor vehicles, real estate, personal property, and financial funds owned by the deceased individual. 
If the total value of his/her estate exceeds a certain amount, he/she will be required to file a state tax return on assets. In some instances, a federal estate tax return will also be necessary. The estate will also be subject to estate tax, which can substantially reduce the amount of money that is inherited by an individual’s surviving loved ones. 
Another asset that is include in the estate evaluation is small businesses. If a deceased individual owned a small business, such as a family farm, it comprises a portion of his/her estate, and can therefore be subject to estate tax. State officials can analyze the business’s assert turnover and use an asset turnover ration to determine the value of the company. 
If a small business is present as an asset within an estate, the estate may lose a much larger portion of its assets due to taxation. There has been a significant amount of debate regarding the effect that estate tax has on farmers and small business owners. Though federal and state officials argue that the effect is minimal, individual’s who inherit these businesses and who are subject to estate tax notice the impact.

Capital Asset Pricing Model At a Glance

Capital Asset Pricing Model At a Glance

When an individual wishes to build his/her estate, he/she may choose to invest in stocks as a means of earning a profit off of a specified monetary fund. In the event that an individual decides to invest in the stock market, he/she should becomes familiar with the capital asset pricing model. 
This model is a mathematical equation that allows an individual to determine the existent relationship between the risk of investing in a certain stock, and the return that is expected from investing in that stock. By adding the risk premium and the rate provided on a risk free security, an individual can better understand the expected return on a risky investment. Though this model can be difficult to understand, it can also be extremely advantageous, as successful capital asset management will help build an estate. 
Without effective capital asset management, an individual may invest in risky stocks and lose a significant amount of money. This will significantly diminish the size of his/her estate. This can be devastating not only due to the effects that it has on an individual’s savings and financial status, but also to the inheritance that will be acquired by loved ones following his/her death. Everyone wants to ensure that the people that they love are cared for when they are no longer here to provide for them. 
As a result, many people will actively seek ways to increase the size of their estate and capital assets. This will help to guarantee that loved ones have access to necessary financial funds. However, it is vital that individuals be cautious when investing in stocks, research thoroughly, and take all feasible steps to guarantee a return on their investment.

What are Fixed Assets

What are Fixed Assets

If a small business owners dies, his/her business is included as an asset that comprises a part of his/her estate. Therefore, a small business can significantly increase the value of an individual’s estate, and cause it to become subject to estate tax. In many states, an estate is only taxed if its value exceeds the specified amount. If a deceased individual owns a thriving small business, this can greatly amplify the value of his/her estate. 
Following the death of a small business owner, his/her business will be evaluated and the value of the business will be determined. Government officials may analyze the capital assets of the company, the asset turnover, and the fixed asset turnover. It is important to understand that, in addition to the profit acquired by the business, the associated fixed assets may also be assessed during an inventory of an individual’s assets.
Fixed assets are assets that are essential for a business to make a profit, but which are not sold to attain this profit. For example, a building that is used as a location from which the business operates is considered to be a fixed asset. If the business owns motor vehicles that are necessary for operation, these vehicles are also fixed assets. If an individual owns and operates a farm, the machinery and equipment used in daily processes are fixed assets. 
Generally, these assets are used over an extended period of time. In order for an asset to be considered fixed, it usually must be used for over one year. In some instances, a fixed asset will increase the total value of a small business, and subsequently increase the value of an individual’s estate. 

What are Liquid Assets

What are Liquid Assets

When an individual dies, the liquidity, or market value, of his/her assets will be assessed, in order to determine the total value of an individual’s estate, which will subsequently be used for tax purposes. Liquid assets often make up a large and important portion of an individual’s estate. It is liquid assets that are often intended to provide loved ones with necessary care. 
In addition to liquid assets, an individual’s estate may include real property. Real property includes land and real estate. Other types of assets may include motor vehicles and personal belongings, such as jewlery. Liquid assets are often the most beneficial to loved ones, especially when other property, such as real estate and motor vehicles, is old or run down. 
The term liquid assets refers to money, or something that can easily be exchanged for money. Therefore money, funds in banks accounts, and funds deposited in checking accounts, are all types of liquid assets. These funds are immediately accessible and can be used to pay debts. 
However, not all types of liquid assets are accessible immediately. For example, stock market shares are considered to be a liquid asset, as are bonds. Mutual funds are also grouped into this category. In addition, the monetary value of an individual’s life insurance policy is a liquid asset. Liquid assets frequently comprise a significant portion of individuals estates, especially when taking into account all bank accounts, retirement funds, stock investments, and pensions.

An Overview of Asset Finance

An Overview of Asset Finance

Asset finance is a branch of finance that is concerned with financial investments that are backed by asset security. Like liquid assets, asset based financing is vital to increasing the value of an individual’s estate. In order for an individual to cautiously amplify his/her estate, it is important that he/she practice effective financial asset management.
If he/she fails to manage his/her asset backed investments, he/she may lose a substantial portion of his/her estate, accumulate debt, and acquired a poor credit history. As a result, he/she may find that it is very difficult to rebuild his/her estate. Therefore, he/she will not have extensive assets to distribute to his/her loved ones, including his/her spouse or children, following his/her death. Nevertheless, asset based financing is an essential component of estate building. 
When considering the assets frequently included in an individual’s estate, real estate is often one of the first types to be noted. In order for an individual to acquire real estate, he/she will most likely be required to dabble in asset finance. He/she will obtain a mortgage to cover the cost of the home, however, the property and other assets will be used as collateral, to compensate the lender in the event that he/she is unable to pay his/her debt. Small businesses work much the same way.
 If an individual wishes to expand his/her estate by establishing a small business, he/she will be required to obtain a small business loan. In order to achieve this, he/she will likely need to offer certain assets, such as his/her home, as collateral.

What are Toxic Assets

What are Toxic Assets

When expanding an estate, it is important that an individual is careful not to invest in toxic asset. A toxic asset is a type of financial asset that does not function due to an extreme decline in its value. When the value of an asset is drastically reduce, the asset is no longer advantageous. If an individual is not cautious with his/her investment, he/she could lose a significant portion of his/her estate due to toxic assets. 
A major increase in toxic assets occurred during the economic crisis that occurred from 2007-2010. These toxic assets was a major contributing factor during this widespread event. Individual’s who invested in toxic assets lost a substantial amount of money. In order to avoid investing in toxic assets, an individual should invest in popular, widespread markets that are necessary and lasting. 
Two of the known types of toxic assets are subprime loans and mortgage backed securities. When an individual exhibits a poor credit history, he/she will find it difficult to obtain a loan. If he/she requires a loan for a necessary or desired purchase, he/she may locate a lender that offers a subprime loan. This type of investment is risky for the lender, and therefore, the individual acquiring the loan will be required to pay a high interest rate. 
During the economic crisis, subprime loans became toxic assets. This was caused by the substantial increase in foreclosures and mortgage delinquencies throughout the United States. This caused major complications for lenders and banks around the globe, and the devastating effects were felt in the financial markets. In turn, this had adverse consequences on individuals who invested in mortgage backed securities.