If you're like most people, the basic terminology of probates and estates probably sounds pretty confusing. But don't worry - we're here to help! In this blog post, we'll break down some of the key terms you need to know, and explain what they mean in plain English. So grab a cup of coffee and settle in!
Probate: The legal process of administering a deceased person's estate, which includes distributing their assets and settling any debts.
Estate: All the property and assets owned by a person at the time of their death.
Executor: The person named in a will who is responsible for carrying out the instructions in the will, including managing the estate during probate.
Administrator: The person appointed by a court to manage an estate if there is no will or if the named executor is unable or unwilling to serve.
Beneficiary: A person or entity that receives property or assets from an estate or trust.
Intestate: When someone dies without a valid will, their estate is distributed according to state law, rather than their wishes.
Will: A legal document that outlines how a person's assets should be distributed after they die, as well as naming an executor to manage the estate during probate.
Trust: A legal arrangement where a trustee holds and manages assets for beneficiaries according to specific instructions outlined in the trust document.
Estate tax: A tax on the transfer of property and assets after someone dies that exceeds certain thresholds set by law.
Letters Testamentary/Letters of Administration: Legal documents issued by a court that give authority to an executor or administrator to act on behalf of an estate during probate.
Personal property: encompasses all of the possessions that a person may own and can be moved around or transferred. This includes tangible objects like cars, jewelry, antiques and art pieces as well as intangible assets like stocks and bonds, money, and intellectual property. For tangible items to be considered personal property, they must be moveable and transferable without damage to the object itself. Many people are unaware that their possessions can also include digital content such as domain names, website content, photographs and films. In addition to tangible objects and digital content, personal property may also refer to rights or contracts such as life insurance policies or copyrights.
Real property: used to describe immovable items that are considered to be owned by an individual or organization. These include land, the structures and buildings attached to the land (i.e. houses, garages, barns etc.), any fixtures on or in the structure (i.e. lighting fixtures, appliances etc.), minerals or natural resources located on the property (i.e. water, oil reserves) and any other rights associated with owning said property (such as hunting, fishing or grazing rights). Real property can also refer to things growing on the land such as trees, crops and plants as well as any personal property included in the sale of the real estate like furniture. Any assets that have been attached to a piece of real estate become part of it and remain with it until it is sold unless otherwise stipulated in a contract of sale.
Probate terms and definitions can be tricky to understand. Luckily, there are a variety of online tools, such as legal dictionaries and forums, that can help make the process easier. As you navigate through the complexities of probate terminology, remember to take your time, ask questions when needed, and review any contracts carefully. Fortunately, with the right resources and understanding of these terms and definitions, you can ensure that the estate is managed in a way that best supports your loved one’s wishes.
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