Estate

An estate is the complete collection of financial and non-financial assets of someone who has passed away, which will ultimately be distributed according to one's wishes, will, and/or intestate laws.

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Similar to the one's net worth, which is generally used to describe all of one's assets during life, an estate refers to the summation of one's debts, assets and belongings upon their death.

Basically anything and everything someone legally owned, either outright or in part, is classified as part of their estate during probate. That could be a car, a house, collectibles, stocks, bonds, anything. The term may also be used during life or within the context of assessing one's financial condition during the bankruptcy process, which usually involves a similarly rigorous legal and administratively-intensive process.

While pop-culture has familiarized the term estate to be reserved in context of the rich or high net worth, in actuality everyone leaves an estate when they pass — even if it is of lesser or negative financial value.

Common Assets of an Estate

One of the major tasks of an executor, executrix, or personal representative is to create a list of all assets in an estate and separate them into two main categories: probate and non-probate.

Probate Assets

Any assets that are owned by a deceased person (known as the decedent) and which do not have a pre-defined, legally recognized way of transferring to heirs will need to pass through the court-supervised process of probate.

These include:

Individually owned assets like:

• Accounts held or titled in single name
• Bank checking or savings accounts
• Brokerage investment accounts
• Mortgages & lines of credit
• Personal Property/household items
• Clothing, furniture, books, collectibles, family keepsakes
• Photographs, slides, keepsakes
• Military tags, medals, banners
• Diaries & personal notes
• Guns, jewelry, instruments
• Electronics, cell phones, computers, hard drives, digital cameras
• Digital Asset(s) - these days this is literally an ever-growing list, but includes offline assets like hard drives and online assets like royalties or crypto.

Along with property owned via Tenants in Common, any qualified retirement or tax-deferred savings accounts without properly-named beneficiary designations, and assets left outside of a trust.

And many other ones you can see in this list of probate assets.

Non-probate assets

Non-probate assets are any assets that are legally able to pass directly to rightful heirs or beneficiaries via properly completed beneficiary designation forms, payable-on-death accounts, certain types of titling & joint-ownership, a properly funded trust, or perhaps simply even by marital status.

These can include:

• POD and TOD account funds
• Life insurance policies
• Assets owned in a trust and then transferred to the relevant beneficiaries.
• Real estate owned in joint tenancy with Right of Survivorship.
• Community property with Right of Survivorship

And others you can see in this list of non-probate assets.

Here's a helpful way to think about an estate's asset types.

Types of Estates

You may see a few different qualifiers in front of the word estate. Those include probate estates, domicile estates, residuary estates, and ancillary estates.

Probate Estates

When an individual passes away, the government follows a particular set of legal processes, called probate, to ensure one's financial or estate planning wishes are properly carried out... ok, and to calculate any necessary taxes.

Probate estates are any estate discussed within the context of probate.

Because trust & estate laws vary locally, the actual probate process or assets overseen may depend on where one lived or died (domicile estate). It is important to note that while all probate assets are estate assets, not all estate assets are considered probate assets. For a full run down of probate vs. non-probate assets, be sure to 👉 check out our complete guide.

Domicile Estates

Domicile estates are the estates in the jurisdictions where people permanently resided in the eyes of the state, or more technically, where they were domiciled.

Read more: What is Domicile? And How It Applies to Inheritance

Residuary Estates

A residuary estate is essentially everything in a person’s estate that isn’t supposed to go to someone in particular. In other words, it's the leftovers that haven't been assigned after everything else is given away.

Read more: Residuary Estate Definition and Context

Ancillary Estates

Ancillary estates are parts of an estate that exist in a jurisdiction outside of someone's domicile, and therefore are subject to a separate set of local probate laws. Families most commonly encounter this as the result of a vacation home.

Read more: Ancillary Estate Definition and Context

What is an Estate Account?

An estate account is a special account executors open when dissolving an estate. It acts as a sort of temporary business account for the estate, and it is through this account that executors pay bills, funnel money from sold assets into, and distribute monetary inheritances.

For more on why these matter and how to open one, read: What is an Estate Account? When, Why, and How to Open One

James' wife, Julie, died last month, leaving him as the surviving spouse. They have three children, all of whom were named beneficiaries in varying capacities. Julie had quite a number of assets in her estate, including non-probate assets like $75k in a POD account designated to James, a life insurance policy with James as the beneficiary, and probate assets including a solely owned investment property in Florida (which triggered a separate ancillary probate process).

James' first job was to accept his designation as executor of the estate, since Julie had appointed him as her executor in her will. He petitioned the probate court to get his letters testamentary, and then began the work of separating her assets into probate and non-probate assets, along with figuring out which things they owned together, and which ones were her's alone.

Because James lived in Ohio, he was not required to get a probate lawyer. But, he was a bit intimidated by the process. To get around this educational hurdle, he stumbled across Atticus and used it to get an idea of everything he was responsible for along with easy access to any forms he needed. This saved him a ton of time early on, and while he did consult with a lawyer on a few real estate ownership questions, he found the clarity and direction given to him by a combination of DIY tools and hands-on consulting to be the best route for him. While it was still a lot of work, he successfully navigated the process in less time than average and managed to distribute all inheritances and taxes with minimal difficulty.