Estate: The total of an individual’s assets, minus all the current debts. Estate does not include shared assets, pensions, or life insurance policies that have a designated beneficiary.
What is Considered Part of the Estate?
- Personal possessions
- Real property (real estate: houses, condos)
- Bank accounts and investments
- Assets (property or accounts) in foreign countries
- Motor vehicles, mobile homes, boats, and aircraft
Debt: All debts due to, and owed by, the deceased.
Understanding Real Vs. Personal Property
Real property is immovable – land or anything permanently built on the land. Your local government often will assess and calculate for taxes owed on real property. The procedure for transferring real property from an estate varies in every state.
Personal property is movable. It can be both tangible (livestock, vehicles) and intangible (copyrights, patents). The procedure for transferring personal property also varies from state to state.
Must-Know Legal Terms — There are keywords that are used concerning an estate:
Will: This is a written document that names beneficiaries who are to inherit assets. The Will delineates the transfer of property, child custody, trusts, and possible institutional bequeaths. The will names the beneficiary as well as the executor of the estate.
Beneficiary: A person or institution who is named in the Will. They will receive property or value from the estate.
Executor: A person named in a Will to manage the estate. If there is no Will then the Probate Court will appoint an executor to distribute the estate.
Probate: A court established in all fifty states to supervise the transfer of legal title to property from the deceased to their heirs or beneficiaries.
Joint Tenancy or Joint Tenants with Right of Survivorship: If two people own property and one dies, the surviving owner has a right to claim the property as their own as long as they have a formal binding agreement. This agreement would have been drafted when the two parties jointly obtained the property.
Intestate: If one dies without a valid Will or Trust, then the state may legally distribute the estate.
Will Executors are responsible for settling any debts and liabilities of an estate before distributing the estate. Debts may include:
- Debts incurred by the deceased while alive
- Loans, credit cards, and bills
- Child support or spousal agreements
- Funeral expenses
- Other miscellaneous fees and expenses
The acquisition, management, and distribution of estate assets is time-consuming and sometimes emotionally draining. The law does not require an executor to be a legal or estate expert, but it does require the highest degree of honesty, transparency, and integrity. If you need additional support navigating estate claims, consider consulting with an attorney or financial advisor.