When preparing estate documents, many people are primarily concerned with how they will distribute assets to heirs following their death. However, Texas residents should also be aware of the difference between tangible and intangible assets, as questions may arise during estate administration.
Defining tangible and intangible assets
A recent appellate court ruling confirmed the traditional classification of stock certificates in a closely held corporation as intangible. Nevertheless, similar assets may garner confusion when the asset involves money distributed during estate administration. Generally, even though money may be classified as a personal asset, it is not classified as a tangible asset. The one exception is if someone has a collection of rare coins or paper money that has an appreciated value above the face value of the money in question.
Tangible assets are physical items that you can hold in your hand and include jewelry, personal property like records and CDS, personal effects like physical photographs, family heirlooms, and similar things. Even your home or other types of real estate are tangible property.
These days more people have intangible assets like websites, electronic photographs, and the like. Intangible assets are generally considered to be intellectually property like patents, trademarks, stocks and bonds, etc.
Ensuring correct distribution of all assets
The goal of estate administration is to ensure your heirs receive the assets you designate, as well as to make the process as easy as possible for your executor. Consider placing certain tangible or intangible assets in trusts to avoid probate where possible.
Periodically reviewing your will and other estate documents is essential for ensuring proper distribution. Life circumstances can and do change. What may have been applicable ten years ago may not be desirable today, so adding trusts, changing beneficiaries, and noting the disposition of intangible assets should be part of your review.
