When you hear the word “estate,” most people think about a person living in a huge mansion, with rolling hills, having lots of money and living a life of leisure.
But you don’t have to be wealthy to have an estate.
With regard to estate planning, the definition of an “estate” is an individual’s interest in all property owned at the time of death, whether real or personal, tangible or intangible.
Let’s break that definition down piece by piece to see what it means:
- Real property is land and all the things that are attached to it. For example, if you own land with a house on it, that is real property. The things that are dug into or built onto the land are also real property. Your dining room and bedroom set are not real property.
- Personal property is anything that is moveable and not attached to your real property. If it can be removed from your real property without doing damage; for example, a storage shed, or even a mobile home is personal property. Other personal property may include cash, bank accounts, stocks, bonds, a gun collection, a stamp collection, paintings, jewelry, etc.
- A tangible asset is anything that can be touched or felt. An example would be money (currency), buildings, real estate, equipment, inventories, precious stones, and vehicles, just to name a few.
- An intangible asset is difficult to evaluate because it lacks physical substance. You can’t touch it. Intangible assets include copyrights, patents, franchises, goodwill, trade names, trademarks, etc.
As you can see, there are many elements that make up an estate. From the plot of land that you own in East Texas to the antique diamond necklace you acquired from your grandmother, many items can be listed within your Will.