What is an Estate?
There is more to the answer than meets the eye. Estates have many different meanings. A person’s estate consists of all the properties, monies, copyrights, and lands that he or she controls or owns.
How to plan and protect your estate!
Estates are defined as the net worth of an individual. An individual’s net worth is the total of their assets, less all of their liabilities at the time of death.
A person’s estate is an umbrella term for the degree, quantity, type, and extent of their wealth. It includes but is not limited to real estate assets such as land, apartments, and business premises, digital assets such as music for artists, intellectual property rights, and money in the bank, cars, insurance policies, and so forth.
In the context of probate proceedings, the term estate refers to the entire personal and jointly-held property that a decedent has before distribution.
What is an Estate?
In everyday talk, estate lightly means a farm or homestead or a historic home of prominent people. In financial jargon, the estate is a word used to denote a person’s net worth.
In the legal sense, it refers to all the assets, entitlements, and liabilities that individuals have accumulated over their lifetime. Here, the estate is a collective term for cash, real estate, art collections, antiques, security investments, and insurance, to mention a few.
When an individual declares bankruptcy or dies, their estate’s value becomes critically pertinent. In the case of a bankruptcy declaration, the estate is analyzed to determine which debts the person can reasonably pay.
An individual’s estate is also rigorously assessed after they die during probate. A will typically explain how a person intends for their estate to be distributed when they die. If the person dies without a will, his/her estate gets distributed based on the state’s intestate laws.
What is an Estate when someone dies?
In estate planning, estate refers to the aggregate asset and liabilities a person owns. All the property that you leave behind after you die is part of your estate. The gross estate and probate estate totals are calculated when dealing with the tax and legal issues related to distributing the assets.
The gross estate
The gross estate is the fair market value of all the assets a person owned at the time of death before any adjustments are made or paid debts and taxes. Estate taxes are determined by how much the decedent’s gross estate is worth.
During the calculation of the taxable estate, deductions are made for debts owed by the deceased, charitable contributions, and the estate’s administrative cost. As of 2021, federal estate taxes are imposed if the taxable estate exceeds $11.7 million. There are estate taxes in some states as well.
The probate estate
The probate process allows a court to approve a will and appoint an executor to handle the estate. The probate court determines who inherits assets if a person dies without a will. Assets from the gross estate may form part of the probate estate. Some assets, including bank accounts, are not subject to probate estate if specific beneficiaries are named.
The probate process can be lengthy. Through careful planning, individuals can reduce the amount of time estate assets must go through probate by arranging for the assets to be paid directly to beneficiaries. The following are examples of how various types of property can be transferred directly to beneficiaries:
- Life insurance and bank accounts: a beneficiary receives proceeds from the account upon death.
- A security account. Beneficiaries inherit assets upon the death of their owners.
- Pension plans: a beneficiary receives ownership.
- A joint account with a right of survivorship: a business, account, or piece of real estate property passes to the co-owner who survives.
Your estate is everything you own. It includes checking accounts, cars, homes, as well as other assets. It includes your written or recorded works, as well as any online content you may possess.
Nevertheless, your estate includes more than just your possessions; it also includes all your liabilities. Before your beneficiaries receive the money you’ve left behind, your estate will pay off your mortgage and other debts.
Some states require those eligible to receive an inheritance to pay a tax (estate tax) on the estates. Depending on the tax bill, a beneficiary may have to sell assets inherited from the estate to cover the tax obligation. It can be overwhelming to administer an estate on your own. You can alleviate some of this stress by hiring an estate planning lawyer. Call Hess-Verdon at (949) 706-7300.
Newport Beach Estate Attorneys Near Me
Hess-Verdon is in Newport Beach. We have 30 years’ experience in estate planning law. We have helped thousands of clients protect their estate, grow their estate, and pass it down to their loved ones through various legal instruments.
Our estate lawyers can help you administer or contest a Trust or Will. We also have expertise in business law and elder abuse law. Expect personalized services that put you in control. Request a no-obligation case assessment
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