What Does "Your Estate" Mean When a Relative Has Passed Away?

By River Braun, J.D.

What Does "Your Estate" Mean When a Relative Has Passed Away?

By River Braun, J.D.

Your estate is made up of everything you own. When a relative passes away, their estate includes everything they owned at the time of their death.

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Probating an estate is the legal process of paying a relative's debts and distributing the estate's property. The process depends on several factors, including whether your relative had a will when they died.

Estates Without a Will

A will directs a personal representative or executor to pay any debts and distribute an estate's property to the named heirs. However, if a relative dies without a will, the probate court appoints an administrator for the estate. You can petition the court asking to be named as the estate's executor.

Your state's intestate laws dictate who receives property from an estate when a relative dies without a will. Most states give spouses and children priority to inherit property. If the person did not have a surviving spouse or children, grandchildren, parents, siblings, and other surviving relatives inherit the property in a specific order.

Probate vs. Non-Probate Assets

Your relative's estate may consist of assets that pass through probate and assets that pass outside of probate. The non-probate assets pass directly to the estate's beneficiaries. Examples of non-probate assets include life insurance policies, retirement accounts, and paid-on-death (POD) accounts. In some cases, an asset may be titled so that it passes directly to the joint owner without going through probate.

Other assets might bypass the probate process if your relative placed the assets within a trust. A trust is a legal entity created to hold title to property. The trustee your relative appointed to manage the trust is responsible for distributing any assets, according to the trust's terms. If the trust directs assets to be transferred to the estate, they would then be distributed according to your relative's will.

Probate assets are those that must be distributed in a court-approved process, only after all estate debts are paid. Probate assets can include things like:

  • Individual assets like bank and investment accounts
  • Tenants-in-Common property
  • Assets with no beneficiary designation or a predeceased beneficiary like IRA or 401(k) accounts
  • Any assets left out of a trust

Jointly Owned Property and Community Property States

In community property states, a spouse is entitled to half of all marital assets upon divorce or death. For example, if your uncle was married and lived in a community property state and held an interest in a sailboat with one of his friends, he could pass a half of his interest in the boat to you, while the other half of his interest would go directly to his spouse.

An estate only represents your relative's interest in the property he or she owned at the time of death. For jointly owned property, the estate owns only the share or interest that your relative was entitled to receive for the property. The joint owners retain their interest in the property.

Federal and State Estate Taxes

An estate may be subject to federal estate taxes. However, very few estates have a gross value high enough to be subject to federal estate taxes.

Some states also have estate taxes. States are not required to apply the same laws for estate taxes that apply to federal estate taxes. Therefore, an estate may owe state estate taxes even though it is exempt from federal estate taxes.

Executing an estate can be an overwhelming process. Engaging the help of an online service provider to help execute your relative's estate can ease some of that stress.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.