Defining an Estate - Simplified

What Is an Estate and What Does It Consist Of?

An Estate Is a Legal Concept Which Defines the Property and Assets That Are Owned by Someone at Their Time of Death. The Specific Meaning Can Vary From State To State So Read on To Learn More!

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If Retirement Has Arrived or Is Around the Corner, It’s Vital That You Know Exactly Where You Stand. To Leave a Lasting Legacy, You Must Know Precisely What You Have and What Constitutes an Estate. We’ve Got the Tea.

Planning for your death can be scary. There’s a reason why over half of UK adults don’t have a will.

As difficult as it may be, understanding exactly what constitutes your estate and proper planning, will leave your beneficiaries with one less thing to worry about when you pass away.

We’ll help you discover:

  • What will be considered a part of your estate?
  • 2 different types of estates.
  • An introduction to writing a will.

As experts in all things retirement, we’ve combed the market and created this simple explanation to assist you in making the most of your assets and leave a long-lasting legacy for your loved ones.

So, what can be considered as a part of your estate? Find out now!

Defining an Estate

To put things simply, your estate is everything that constitutes your net worth1. In other words, all your cash and asset will be included in your estate.

Should you be in a position where you need to declare bankruptcy2, your estate will be assessed, and you might be obligated to use what you have to pay off some of your debts.

assets

4 Assets Included in Your Estate

While anything you own is considered as a part of your estate, here are the 4 most common assets that will be considered:

  • Property Ownership – all properties that are in your name.
  • Jewellery – whether it was bought in your lifetime or a piece of inheritance, your bejeweled assets are part of your estate.
  • Cash – if your bank account has plus numbers, your money will be included in your estate.
  • Financial Securities – which includes stocks, bonds, policies, and mutual fund shares.

2 Types of Estates

Here are the 2 types of estates you must be aware of:

Probate Estate

A probate estate is the most common one for your average chap. It refers to the assets that will go through a probate3 process when you pass away. The probate process is essential whether you have a will or your assets are passed by intestate succession.

Through this process, your assets will be divided between your closest relatives or otherwise given to the beneficiaries of your estate.

Trust Estate

The alternative to this is a trust estate. This is when all your assets fall under a trust and will be handed over to trust beneficiaries when you pass away.

A trust refers to the fiduciary4 arrangement in which the owner gives the trustee rights to the title of property or assets on behalf of the beneficiary.

will

The Importance of Writing a Will

Estate planning is one of the most important financial decisions of one’s life. That’s the division of your assets in determining who’ll get what when you die. If not done, you can leave your loved ones in a sticky position, fighting to determine who gets what.

Let’s be honest.

The one thing in life that’s inevitable is death, and you don’t want to leave your kids to pick up your messy pieces.

That’s the primary goal behind having a will.

It’s never too early or too late to write a will. While we all want to die in our old age, sadly, this isn’t always how things will go. Hence, have your will prepared, no matter what your age.

To simply explain, a will is a legal document that clearly dictates who’ll look after minors and details of the division of your estate when you pass away. In other words, it’s the simplest way to avoid confusion and arguments between family members who may stake claim to your possessions.

The authenticity of your will is determined by a legal process called probate. When you pass away, the custodian of your will shall take it to the probate court or the executor5 named.

writing

In Conclusion

Whether you’re rolling in assets or cash tight, estate planning is vital. That way, you can leave this world knowing that all your possessions are left in the right hands.

Get in touch with a professional financial adviser today who can help you and your family get the most out of your estate. What are you waiting for?

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