What It Is:
An estate is all of an individual’s property and financial assets and liabilities at the time of his or her death.
How It Works/Example:
An estate might include a home and other real estate owned by an individual, as well as valuables such as jewelry
Why It Matters:
The contents of an estate are distributed according to the owner’s will upon death. If the total value of the estate exceeds a certain limit, then assets passed on to heirs may be subject to an estate tax.