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Related to Estate: estate tax, Estate planning, Probate estate
Your estate is what you leave behind, financially speaking, when you die. To figure its worth, your assets are valued to determine your gross estate.
The assets may include cash, investments, retirement accounts, business interests, real estate, precious objects and antiques, and personal effects.
Then all your outstanding debts, which may include income taxes, loans, or other obligations, are paid, and those plus any costs of settling the estate are subtracted from the gross estate.
If the amount that's left is larger than the amount you can leave to your heirs tax free, you have a taxable estate, and federal estate taxes may be due. Depending on the state where you live and the size of your taxable estate, there may be additional state taxes as well.
After any taxes that may be due are paid, what remains is distributed among your heirs according to the terms of your will, the terms of any trusts you established, and the beneficiaries you named on certain accounts -- or the rulings of a court, if you didn't leave a will.
(1) All the property of a person who has died. (2) The degree,quantity,nature,and extent of legal interest that a person has in real and personal property.The most common estates are
1. In fee simple absolute. This is the greatest degree of ownership possible, in which a per- son owns all rights to a property and may freely dispose of them to purchasers or heirs.
2. At sufferance. In this type of estate a tenant continues to retain possession past the expi- ration of the lease.
3. At will. A tenant is put into possession by the owner of land, but the possession may be terminated at the will of the owner.
4. By the entirety. This is a joint estate held by two persons who are married to each other at the time of creation and which cannot be destroyed by either one of them or by the credi- tors of the other. In some states, a divorce court may not even divide the property, but the parties must agree on its disposition.
5. For life. In this estate, someone has an interest in property that lasts only as long as some life named or described in the granting instrument.
6. For years. This is typically a lease.
7. In remainder. In this type of estate a person takes property after the death of a person with a defining life in a life estate.
8. In reversion. That portion of an estate that remains in a grantor who transfers less than full ownership of a property. For example, if the owner of property transfers a life estate to another, the owner retains an estate in reversion and will regain full ownership when the life tenancy ends. If that future interest were also transferred to another, it would be called a remainder, but since it is retained by the grantor it is called a reversion.
9. In severalty. This term can be confusing, because it means the opposite of our common understanding of the word “several.” An estate in severalty is an estate owned by one person, alone.