- Estate (law)
An estate is the
net worthof a person at any point in time. It is the sum of a person's assets- legal rights, interests and entitlements to propertyof any kind - less all liabilitiesat that time. The issue is of special legal significance on a question of bankruptcyand death of the person. (See inheritance.)
Depending on the context, the term is also used in reference to an
estate in landor of a particular kind of property (such as real estate or personal estate). The term is also used to refer to the sum of a person's assets only.
In the context of
probate, the estate of a deceased person consists of all the property, whether real or personal, owned by the person at the time of death. Assets that pass to somebody else by operation of law(for example, property held on a joint tenancybasis), do not form part of the deceased estate, even though the person had rights to that property during his or her lifetime. Also, if the deceased owned life insuranceand nominated a beneficiary of the policy, the proceeds of that policy would not pass into the deceased's estate, but would go directly to the nominated beneficiary. Similarly, superannuationdeath benefits can go directly to a deceased's dependent, bypassing the deceased's estate. (See will and intestacy) The estate (or assets) of a deceased person is administered by an executor(in the case of a will) or administrator (in the case of intestacy). The function of the executor and administrator is to protect the assets of the estate, pay out all expenses and the deceased's liabilities and distribute the balance in accordance with the directions in the will, or as required by law.
Under US bankruptcy law, a person's estate consists of all assets or property of any kind available for distribution to creditors. [Bankruptcy Code usc|11|541.] The estate (or assets) of a bankrupt person is administered by a
trustee in bankruptcy. The legal position in all common lawcountries is similar in this respect.
Legal estate in land
land law, the term "estate" is a remnant of the English feudal system, which created a complex hierarchy of estates and interests in land. The allodialor fee simpleinterest is the most complete ownership that one can have of property in the common law system. An estate can be an estate for years, an estate at will, a life estate(extinguishing at the death of the holder), an estate "pur auter vie" (a life interest for the life of another person) or a fee tailestate (to the heirs of one's body) or some more limited kind of heir (e.g. to heirs male of one's body).
Fee simple estates may be either
fee simple absoluteor defeasible("i.e. subject to future conditions") like fee simple determinable and fee simple subject to condition subsequent; this is the complex system of future interests(q.v.) which allows concepts of trusts and estates to elide into actuarial sciencethrough the use of life contingencies.
Estate in land can also be divided into estates of
inheritanceand other estates that are not of inheritance. The fee simple estate and the fee tail estate are estates of inheritance; they pass to the owner's heirs by operation of law, either without restrictions (in the case of fee simple), or with restrictions (in the case of fee tail). The estate for years and the life estate are estates not of inheritance; the owner owns nothing after the term of years has passed, and cannot pass on anything to his or her heirs.
Legal estates and interests are called rights "in rem", and said to be "good against the world".
Superimposed on the legal estate and interests in land, English courts also created "
equitable interests" over the same legal interests. These obligations are called trusts which will be enforceable in a court. A trusteeis the person who holds the legal titleto property, while the beneficiaryis said to have an equitable interest in the property.
Estate tax (United States)
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