What Is an Estate?

The estate of an individual is defined as everything that individual owns that adds up to form the net worth of the individual. In most cases, this includes all land, real estate, personal possessions, financial accounts, securities, liquid cash, and any other assets that the individual either owns or has a controlling stake in.

The traditional definition of an estate refers to the land and buildings located on a large property. An estate may also consist of art collections, antiques, investments, or insurance policies. Since an estate is a measure of an individual’s net worth, the liabilities are subtracted from the assets before the value of the estate is assessed.

In general, there are two occasions when the valuation of an individual’s personal estate becomes relevant: when the individual is seeking bankruptcy protection, and when the individual passes away. Individual’s declaring bankruptcy have their estate assessed in order to liquidate it to pay off their debtors or to assess how much of a debt they could reasonably be expected to pay with their current assets.

The assessment, division, and distribution of an estate after an individual passes away is known as estate planning. Estate planning is most often managed by a will and careful financial accounting.

Key Takeaways

• An estate is defined as the sum total of all the assets that an individual owns or has a controlling stake in minus that individual’s liabilities.
• Estates are most often assessed for either bankruptcy proceedings or the final distribution of assets for a deceased individual.
• The act of designating how an individual’s estate is to be divided is known as estate planning.
• If you want to establish a plan for the division of your estate, an experienced Trusts & Estates attorney may be able to help you achieve your goal by utilizing experience and expert knowledge.

Trusts and Estates

Estate planning is the most important financial undertaking that many people ever accomplish. To guarantee that an individual’s wishes are carried out after their passing, an individual will need to leave explicit instruction with regard to how the estate is being divided.

By planning the division of their estate, an individual can decide the exact details of their estate’s distribution. This includes who will receive parts of the estate, what parts of the estate that they specifically will acquire, when this will happen, and what if any tasks must be accomplished before they receive their portion of the estate.

Depending on the size and complexity of the estate, there may be a number of tasks that an individual’s estate plan must account for. Likewise, the amount of taxes, fees, and laws to be considered will also scale with the size of the estate. Some of the things that an individual should consider while planning their estate may include:

• Laying out explicit, detailed  instructions for the healthcare and financial affairs of the individual if they were to become physically or mentally inacpacitated prior to their death.
• Providing the terms for the transfer of ownership of any business the individual may possess as well as the circumstances that may lead to the transfer such as their retirement, incapacitation, or death.
• Naming a legal guardian to care for any minor children the individual may have as well as protecting their inheritance.
• Instructing how any family members with special needs that the individual cared for should be helped following the individual’s death or incapacitation.
• Providing assets, trusts, or financial savings for close family, children, or spouses after the individual’s passing.

Another measure that can help to minimize taxes, court costs, and legal fees is to keep an estate plan current with the wishes of an individual as well as state laws. By ensuring that their estate plan stays up to date, an individual can avoid legal disputes, both regarding the legitimacy of the plan and the accuracy of the plan with regard to the individual’s desires.

Bottom Line

If you want to secure your right to your desires and your estate, you will need a trusts & estates attorney. An experienced trusts & estates attorney can help you efficiently plan out your estate and how it should be distributed.

By carefully editing your last will and testament, a trusts & estates attorney can ensure that your will is ironclad. If necessary, a trusts & estates attorney can write your will for you. This will protect your assets, ensuring that they are distributed to your beneficiaries, while also ensuring that your desires are respected by explicitly stating the goals and limits of your executor.