Your first mental image upon hearing the word “estate” is likely that of a massive mansion set on a wide, beautifully landscaped plot.If you are like the majority of people, this is the image that you have in your head when you hear the word “estate.” It’s probable that the garden has its very own lake, in addition to the marble fountain that’s located right at the front door of the house. In either scenario, the word “estate” is likely to evoke images of lavish living and affluence in the mind of the listener.
However, when discussing legal matters with Reno Estate Planning Attorney, the term “estate” refers to something very different.
Estate In The Legal System
In legal terms, a person’s “estate” consists of everything in their possession at the time of their death.
- “Personal property” includes stuff like vehicles, jewellery, and couches;
- Real estate, like a house (however, depending on the circumstances, the way your property is titled may exempt it from the estate);
- Bank accounts, life insurance policies, stock and bond holdings, pension and retirement funds all fall under the umbrella term “money,” which can also apply to other forms of financial assets.
- financial obligations such as credit card balances, car loans, and mortgages.
As a result, the definition of “estate” is quite simple. Examining the consequences, however, might get more intricate, especially when probate is involved. The distribution of assets is a particularly sensitive issue. This is because, in most cases, a deceased person’s estate is split into two parts: the “probate estate” and the “non-probate estate.”
Estates Subject To Probate
All of a person’s assets, whether or not they must go through probate before being distributed to their heirs, make up their “probate estate.” What they mainly consist of is:
- Whether the property is held solely in the decedent’s name or by many parties as tenants in common, it is considered to be owned by the decedent.
- Possessions of a private and/or sentimental nature such as jewellery, furniture, and automobiles
- Completely and solely in the decedent’s name deposited bank accounts
- ownership of business interests in a partnership, corporation, or LLC
Any financial assets, such as a life insurance policy or investment account, that have the deceased person or his or her estate listed as the beneficiary.
Bypassing probate may be achievable if an asset is titled properly or has a valid beneficiary designate. The following are examples:
- Co-tenanted property is a term used to describe real estate that is owned jointly by more than one person.
- Joint or beneficiary-designated brokerage or bank accounts that will be paid out or transferred to a designated beneficiary upon the death of one of the account holders are considered “transferable on death”
- Trust property consists of actual buildings and land that are held by live people.
- Deceased person’s name not listed as the beneficiary on any life insurance policies or brokerage accounts
Property that does not leave an estate without going through the probate process needs to be dealt with in a different manner than property that does. It is essential to keep in mind that your will does not have any influence on the distribution of any assets that do not need to go through the probate process. You need to check the ownership of all of your assets and accounts to ensure that any goods that are jointly held will be divided in the manner that you choose. Additionally, you ought to investigate the people whom you have designated to receive your riches after your passing.