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The assets that a person owns when he/she dies. The estate includes all personal property, real estate, securities and other assets. The estate is used to repay all of the person's outstanding debt. After debts are repaid, the estate may be taxed, depending on the value of the remaining assets. After all debts and taxes are repaid, the estate is distributed according to the provisions of the decedent's will and/or state law.


The assets owned by a person at the time of death. See also gross 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.


This term is most commonly used for a taxable entity that is established upon the death of a taxpayer. It consists of all the decedent's property and personal effects. The estate exists until the final distribution of its assets to the heirs and other beneficiaries. During the period of administration, the executor must usually file a return. An estate is also created when a taxpayer files bankruptcy under Chapter 7 or CHapter 11 of the bankruptcy code.
References in periodicals archive ?
Because of the grantor's retained interest in the trust, the entire value of the residence is included in the grantor's estate under IRC section 2036 if he or she dies during the trust term.
The grantor may not, however, direct the trustee to use the proceeds for the benefit of the grantor's estate, such as to pay creditors or estate taxes, which subjects the proceeds to estate tax.
The grantor's estate and gift tax considerations are complicated by the generation-skipping tax imposed on transfers in excess of a $1 million lifetime exclusion, made directly or in trust, during life and at death, to a beneficiary at least two generations below the grantor's generation.
Accordingly, the IRS concluded that the retention of the power of substitution would not cause the trust's assets to be included in the grantor's estate for estate tax purposes under Secs.
675(4)(C) to create an IDGT if the estate planner is concerned that such a power may cause the inclusion of trust assets in a grantor's estate for estate tax purposes.
In two recent private letter rulings (9015001 and 9016002), the Internal Revenue Service said gifts made from a revocable trust within three years of the grantor's death are part of the grantor's estate for federal estate tax purpose.
For instance, half of the reversion is payable to the grantor's estate and half to the remaindermen.
Additionally, the AFR interest paid under the installment note, which flows back into the grantor's estate, is less than the 120%-of-AFR annuity payment required under the GRAT rules.
According to Example 5, if any amount of the annuity could be payable to a grantor's estate, the value of that contingent annuity interest had to reduce the amount of the grantor's retained trust value.
Future appreciation (above the note rate) on property sold to an IDIT is removed from a grantor's estate.
In addition, CRATs can reduce a grantor's estate tax and increase the heirs' inheritance.
Trust property is included in a grantor's estate if he or she dies during the trust term;