Do you need an appraisal even if you already have one?
Learn something new every day More Info... by email
In law, an estate is the term for an individual’s assets, all of a person's money and property that have an established financial value. This will include intellectual property such as copyrights, patents, and trademarks — anything that can be transferred to another party when necessary. An estate usually comes into effect as such only when a person declares bankruptcy or dies and the property must be distributed to others. Upon a person’s death, this property can be distributed by a will, a legally binding document. If no will exists, the person’s assets will be distributed according to applicable local laws.
Inheritance law is one of the oldest forms of legal establishment. Ancient societies such as Egypt, Rome, and China were concerned with the distribution of a deceased person’s property, at least among the wealthy and powerful classes. Modern inheritance law had its origins in medieval Europe, particularly the common law of nations such as England. In the present day, laws governing the distribution of an estate vary widely from nation to nation and sometimes vary by local regions such as states or provinces.
In the case of bankruptcy, an individual’s estate is the sum of his or her assets that can be sold or distributed to cover outstanding debt. This is usually determined by the legal proceeding governing a bankruptcy case; some personal property is exempt from being seized by creditors. The term estate is not applied to the assets of a business that goes bankrupt.
When people die, their assets are distributed according to local laws. In most nations, these assets are taxable. This is called an estate tax or an inheritance tax and is applied to the estate or the inheritors. If the person left a will, the remaining property is distributed according to the deceased person’s wishes, a process called probate. This is supervised by a person called an executor, usually named as such in the will or other legal documents. While spouses, children, and other family members are the most common beneficiaries, any person or party can be designated to inherit property in a will.
If a person has not left a will, the estate is considered intestate. In these cases, local laws will determine who gets the deceased person’s assets, usually the closest living relatives, called the next of kin. In the United States, the American Bar Association estimates that only 40 percent of all Americans have a valid will. This can often cause conflict, particularly in the case of unmarried romantic partners, who are usually not recognized by probate laws, no matter how long the relationship lasted. Homosexual couples are especially vulnerable to this kind of conflict, as many jurisdictions do not allow them to marry, and family members are often dismissive or outright hostile to a person’s gay partner.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!