Wallace Legal News: What is an Estate?

*IMPORTANT: These materials are for informational purposes only. They should not be construed as legal advice. This information is not intended to replace the assistance of an attorney in any particular situation. It is not intended to, and does not, create an attorney-client relationship.

What is an Estate?

For most people, the word “estate” seems foreign. Millionaires have estates, so you may not feel like the word applies to you. But we all have an “estate.” Your estate is everything you own, minus your debts. This will seem strange, but after you die, your estate takes on a life of its own. It becomes a legal entity. Your estate can owe or be owed money, for example. It gets bills and has to pay them. In some cases, your estate can live more than twice as long as you do.

Your estate is equal to your net worth -- the value of your assets -- minus any debts. Assets in your estate can include: Any real property (houses, land, etc.)

• Bank accounts
• Investment accounts
• Stocks and bonds
• Mutual funds
• Insurance proceeds
• Retirement plans
• Money owed to you
• Tangible personal property like jewelry, art, furniture and cars

All liabilities are also taken into account, whether it is the mortgage on your house, your credit card balance, or the money you owe your uncle. Your estate also gets bills from lawyers and courts, tax collectors and so on, and the estate pays these as well.

If you'll like to learn more please visit our frequently asked questions section, or read rich's latest newsletter.