An estate encompasses all real property, personal belongings, financial accounts, and liabilities of an individual upon their passing. When a person dies, their estate is evaluated to determine its total value, which includes assets such as real estate, vehicles, and investments, as well as liabilities like debts and mortgages. The distribution of the estate is carried out according to the deceased’s will, if one exists, or according to state laws if there is no will. This process often involves probate, where the estate is settled and assets are transferred to beneficiaries after settling any outstanding debts and taxes.
Estate Example
For example, if someone dies owning a house worth $400,000, a car valued at $25,000, and having $100,000 in savings but with $50,000 in credit card debt, their estate would be calculated as $475,000. After paying off the debts, the net estate available for distribution would be $425,000.