What is an Estate?

When someone dies, they leave behind an “estate.” As executor, one of your primary responsibilities involves the estate.  But what exactly does estate mean?  In this post we’ll break this concept, exploring the definition and components of an estate and preview the executor role as it relates to the estate.

What is an Estate? 

The term estate refers to everything a person owns and owes at the time of their death.  From assets like a house or car, to financial obligations like debts or bills that need to be paid, an estate is the starting point for settling a deceased person’s affairs.  

Components of an Estate

At its most basic level, an estate includes assets and liabilities.  

  • Assets are essentially everything the deceased owned. This can be physical assets like personal belongings including, for example, jewelry and artwork, but it can also be property, vehicles, bank accounts, investment portfolios, and even digital assets like cryptocurrencies or online accounts.
  • Liabilities are the debts and financial obligations of the deceased. Mortgages, credit card balances, personal loans, unpaid bills, and taxes owed all fall under this category.

An Executor’s Role as it Relates to an Estate

An executor is the person named in a will to oversee the administration of the deceased’s estate, doing things like finding and protecting assets, paying final bills and distributing assets to beneficiaries according to the instructions in the will.  In short, an executor’s role has everything to do with an estate.  

Conclusion

Understanding what constitutes an estate is crucial for an executor.  It is also important to understand if you are planning your own affairs so you can make the final administration of your estate easier and assist your future executor in the process. 

Serving as an executor is an important role in which the deceased wanted you to serve.  In a way, an executor is allowed to help shepherd the final chapter of their financial and personal legacy.  While this is a big responsibility, you don’t have to do it alone.  Executor.org’s personalized plan and the right team of professionals around you can help you successfully conquer the executor role.

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