What is an estate?
By Sarah Hughes, Staff Writer.
In short, an estate is simply a person’s net worth according to the law. So this can include property, money in bank accounts, vehicles, and even smaller things like jewelry. You can think of an estate, however, as two colors: black and red… This is because an estate is not only about what you own (being in the black), it’s also about what you owe (being in the red). Debts that you left, such as mortgages and credit cards will be deducted from your estate before proceeds are paid out to beneficiaries, such as your children.
This distribution of your estate, that is, what you own, minus what you owe is known as an ‘estate plan’. Estate planning is not only about what you decide to give away, it is also about decisions that need to be made on your behalf when you are still alive, such as whether you would want to be resuscitated or not in hospital. The estate plan is made of documents which have specific purposes. For example, one of these documents might dictate at what age you would like your children to be able to access a trust fund you have set up for them.
A brief summary of the documents included in an estate plan are: