An estate, in
common law, is the
net worth of a person at any point in time, alive or dead. It is the sum of a person's
assets – legal rights, interests and entitlements to
property of any kind – less all
liabilities at that time. The issue is of special legal significance on a question of
bankruptcy
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...
and death of the person. (See
inheritance.)
Depending on the particular context, the term is also used in reference to an
estate in land or of a particular kind of property (such as
real estate or
personal estate). The term is also used to refer to the sum of a person's assets only.
The equivalent in
civil law legal systems is
patrimony.
Bankruptcy
Under
United States bankruptcy law
In the United States, bankruptcy is largely governed by federal law, commonly referred to as the "Bankruptcy Code" ("Code"). The United States Constitution (Article 1, Section 8, Clause 4) authorizes Congress to enact "uniform Laws on the subj ...
, a person's estate consists of all assets or property of any kind available for distribution to creditors. However, some assets are recognized as
exempt to allow a person significant resources to restart his or her financial life. In the
United States, asset exemptions depend on various factors, including state and federal law. The estate (or assets) of a bankrupt person is administered by a
trustee in bankruptcy. The legal position in all
common law countries is similar in this respect.
Legal estate in land
In
land law, the term "estate" is a remnant of the English
feudal system
Feudalism, also known as the feudal system, was the combination of the legal, economic, military, cultural and political customs that flourished in medieval Europe between the 9th and 15th centuries. Broadly defined, it was a way of structur ...
, which created a complex hierarchy of estates and interests in land. The
allodial
Allodial title constitutes ownership of real property (land, buildings, and fixtures) that is independent of any superior landlord. Allodial title is related to the concept of land held "in allodium", or land ownership by occupancy and defens ...
or
fee simple
In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time (i.e., per ...
interest is the most complete ownership that one can have of property in the common law system. An estate can be an estate for years, an estate at will, a
life estate (extinguishing at the death of the holder), an estate ''pur auter vie'' (a life interest for the life of another person) or a
fee tail
In English common law, fee tail or entail is a form of trust established by deed or settlement which restricts the sale or inheritance of an estate in real property and prevents the property from being sold, devised by will, or otherwise alie ...
estate (to the heirs of one's body) or some more limited kind of heir (e.g. to heirs male of one's body).
Fee simple estates may be either
fee simple absolute or
defeasible (''i.e. subject to future conditions'') like fee simple determinable and fee simple subject to condition subsequent; this is the complex system of
future interests (q.v.) which allows concepts of trusts and estates to elide into
actuarial science through the use of life contingencies.
Estate in land can also be divided into estates of
inheritance and other estates that are not of inheritance. The fee simple estate and the fee tail estate are estates of inheritance; they pass to the owner's heirs
by operation of law, either without restrictions (in the case of fee simple), or with restrictions (in the case of fee tail). The estate for years and the life estate are estates not of inheritance; the owner owns nothing after the term of years has passed, and cannot pass on anything to his or her heirs.
[ Wednesday, 16 December 2020 ]
Legal estates and interests are called rights "in rem", and said to be "good against the world".
Equitable estates
Superimposed on the legal estate and interests in land, English courts created "
equitable interests" over the same legal interests. These obligations are called
trusts which will be enforceable in a
court
A court is any person or institution, often as a government institution, with the authority to adjudicate legal disputes between parties and carry out the administration of justice in civil, criminal, and administrative matters in accordance ...
. A
trustee
Trustee (or the holding of a trusteeship) is a legal term which, in its broadest sense, is a synonym for anyone in a position of trust and so can refer to any individual who holds property, authority, or a position of trust or responsibility to ...
is the person who holds the
legal title to property, while the
beneficiary
A beneficiary (also, in trust law, '' cestui que use'') in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. For example, the beneficiary of a life insurance policy is the pers ...
is said to have an equitable interest in the property.
See also
*
Estate tax
*
Estate tax in the United States
*
Estate planning
*
Literary executor
References
{{Authority control
Inheritance
Real property law