It can be emotionally draining to be responsible for the proper allocation of a loved one’s estate, and as such it is recommended that you enlist the services of a qualified lawyer who can help you through the process.
An estate consists primarily of all the property a person owns or controls. The estate property may be in his or her sole name, in a partnership, in a joint ownership arrangement, or through a trust.
Estate property will also include all other income and monies that would be generated upon the person’s death, such as through a life insurance policy.
What is not excluded in the estate?
An estate does not include assets that a person has transitioned into an irrevocable trust during his/her lifetime. Once an asset has been placed in the trust, it cannot be taken back. In essence, once the transfer is made, the person no longer owns or controls those assets.
Property that the deceased has placed in a revocable trust, such as a living trust, irrevocably belongs to the trust when the person who set up the trust (trustor) dies, and all the assets of the trust are no longer part of the decedent’s estate (though they may be considered for tax purposes).
Other property is also excluded from the estate when the property passes automatically to another upon the death of the original owner. For example, insurance policies, pension funds and bank accounts that are set to pass directly to a named party are not considered part of decedent’s estate.
A small estate is one whose gross value of solely owned assets does not exceed $50,000 and the sole beneficiaries are the husband, wife, children or the widowed mother of the deceased; or in which the gross value of solely owned assets does not exceed $100,00 and the beneficiaries and individuals who are not the surviving spouse, children, or widowed mother of the deceased.
The distribution protocols in the case of a small estate differ slightly from those of larger estates, and so it is important to elicit the help of a solicitor or the team at What do I do? to ensure that assets in these cases are distributed expeditiously.