What Is an Estate?

INTRODUCTION

Good estate planning involves the distribution of your assets according to your wishes, as laid out in your Will, in a way that minimises taxes and avoids any potential legal or family disputes.

It also allows the Testator to make informed decisions about the distribution of their Estate after death.

That's why it's crucial to be clear about the term "estate," which has nothing to do with images of a grand mansion sitting on acres of land.

From a legal perspective, 'estate' represents your total net worth at any point in time, irrespective of whether you are still alive or have passed away.

HOW IS YOUR ESTATE MADE UP?

Your estate is the sum of your assets - legal rights, interests, and entitlements to property, money, investments and possessions of any kind - less all liabilities at that time.

Here's how we can break this down:

• Assets: Assets include tangible items such as personal possessions like cars, houses, and jewellery. Assets can also be intangible, such as bank accounts or stocks and shares.
• Entitlement: An entitlement may be a right to a future inheritance or a debt that somebody owes you.
• Rights: You have a legal claim to certain rights, such as a business interest.

HOW TO CALCULATE THE VALUE OF YOUR ESTATE

Once the Testator passes away, their Estate is regarded as the total of all their assets minus liabilities.

What is left over is regarded as the true value of the Estate. This is what will be distributed to Beneficiaries, according to the Testator's wishes (or the rules of intestacy if no Will is in place).

Liabilities will include any debts (loans, mortgages, credit cards etc), as well as other forms of obligation such as child support or alimony.

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