BETA - What is an estate?

What is an estate? So when people ask me what is an estate, it gets confusing because the documents that I named that you should have, a will and the two POAs and a living will, that is estate planning. That's the overall whatever is going on with you. I have my documents, it applies to all of these things. When someone dies, it is probate court in whatever county that they resided in that oversees the estate of Marsha. And that's where people get confused because even on the forms in probate, it says estate of and then the decedent's name. So all probate court is saying is we are looking at all assets of the decedent. That's what we're calling their estate. And so the purpose of probate court is to the court oversees the distribution of a person's assets. So you can die with a will, it's called testate, or you can die without a will, it's called intestate. If you die with a will, the will outlines who gets what, how I want my assets to be distributed. So usually the person, usually an executor is named in the will, that's the person that's going to handle the business along with the lawyer, with the court overseeing everyone. So you file the will in the probate court in whatever county and there are a lot of forms in probate court. Sometimes people will say, do I need a lawyer for probate court? And I say, no, you don't. You can file these, but bless you because I promise you, you will be calling me back because they're complicated. Probate court can be complicated. So if there is a will, there's an executor named, you go through the process in probate court and eventually those assets get distributed to whomever was left as beneficiaries in the will. Another job though is for the executor to find not only the assets, but also the debt of the decedent. So you always have to pay off the debt if there's money and in every state there is an order, a pecking order of the debts and in what order they have to be paid. But you're working with the attorney and the court and that is on that side of there was a will. Everything eventually gets distributed, you close the estate. If you die in test state without a will, then the statute of descendant distribution and every state is going to have one, outlines the order in which people get assets. And that is a whole new ball game. First they'll look, is there a spouse? If no spouse, where are their kids? No, where are their parents? Where are their siblings? That's the pecking order for those things in terms of beneficiaries. But eventually again, you get to distribution and you will close the estate. Let me say one thing about probate. When somebody calls me, the first thing I have to determine though, are they probate assets or non-probate assets? Okay. Probate assets are those that in order to be transferred, they need to come through probate. There are things that are non-probate assets that probate court has no jurisdiction over and one is life insurance. And people should know that. When you have life insurance, say you work at a company, there's life insurance. They will ask you, who do you want your beneficiary to be and who do you want your contingent beneficiary to be? So that is a contract between you and your employer, who you would want to get your life insurance. So that doesn't come through probate nor does annuities, pensions. Again, you've named beneficiaries.