What It Is:

Estate refers to all of an individual’s property and financial assets at the time of their 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.