The word Estate, like so many other words, has the same spelling and sound but different meanings. Estate is a simple yet intricate word, especially within the legal space and its meaning is
derived from the context used.
Here are three (3) ways the word Estate may be used in a legal context and the meaning that applies.
1. Real Estate
Most persons are familiar with the term “real estate”. Reading this, you may already know that this speaks to land/property. The word estate, when used in this context, speaks to the property owned by an individual-the actual land or house on the land.
Paul: I want to acquire new real estate to diversify my Passive Income Portfolio.
Paul is indicating his desire to acquire new properties as a means of adding to his other streams of income.
2. ESTATE PLANNING
An estate is a person's net worth-everything an individual owns is part of his or her estate, including their home, car, bank accounts, property, possessions, money-the overall assets owned by that individual.
Estate Planning refers to the systems and arrangements an individual puts in place to manage their assets and obligations should one become incapacitated and to facilitate the transfer/distribution of said assets after death.
Also, Estate, in the context of Estate Planning, may also refer to minors and other dependents (e.g. a sister you have been caring for because of disability) you may need to have cared for should you become incapacitated or sadly pass. They, too, will form part of your Estate and, therefore, must be accounted for in the planning process.
Estate Planning involves documenting and creating legal structures for the management of one’s assets and obligations during your lifetime and distribution or transfer of assets upon death and entrusting certain obligations like caring for a loved one upon death. This may be done by having one or all of the following, Insurance, Wills, Trusts, Powers of Attorney, Court Orders for Guardianship, etc.
2. Probate and Administration of Estate
In the Probate and Administration context, when we speak or often hear the word estate, it’s usually what an individual has died leaving. All their assets acquired during their lifetime, at death, now forms part of their “Estate”. It can only pass to another via the probate process, that is, if the person died leaving a will or under the law of Intestacy/via administration if the person did not leave a will. The Estate of a loved one will have to go through a court process called probate or administration of estate.
The word estate is simple yet dynamic in a legal context; now, when you see and hear the word estate, you will no doubt have an appreciation for its meaning and how it applies.
This Article is for general information purposes only and does not, and is not intended to, constitute legal advice.
By Christine Nunes