Almost every discussion about your financial situation boils down to two important questions: what do you own, and what do you owe? While most of us can answer the second question fairly easily (with a little help from a credit report), I am yet to see anybody make a comprehensive list of their assets- the stuff they own- on the first try.
The reason for this is that some assets are obvious- money in your bank account, valuable coin collections, vehicles, real estate- and others are not. For example, if you have written a story, or invented a process or product, or have a catchy trade-name used in the community, those are assets. Specifically, those are “intellectual property,” and while it is difficult to figure out how much they are worth, they are worth something.
“The right to sue” is another oft-overlooked asset. If you can sue somebody, that right has value, and can even (in some situations) be sold. It definitely can be settled!
Accounts receivable, future tax refunds, and earned but unpaid wages (the money you have already earned, but haven’t yet gotten a check for) are also usually forgotten by my asset-listing clients. In many states, like California, your vacation time is an asset, since it has cash value.
Knowing how to identify your assets in a comprehensive, detailed way is important in several contexts. When you are looking to settle debts or assess your net worth, overlooking assets may mean missing opportunities. When crafting an estate plan, you want to account for all things of value, or else they may be left out of your trust or will. Finally, when filing a bankruptcy or responding to a judgment debtor’s examination, you need to be complete when listing things that you own.
This is one area where practicing consumer debt law has taught me a thing or two. “Assets” includes not just the things we see and the things we have, but dozens of different categories of rights, items, and even ideas that, while not obvious, definitely have value.