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What's included in an estate when someone dies?

The word ‘estate’ has a few different meanings in the UK. It is often used to describe a sprawling country mansion with manicured gardens and a couple of peacocks kicking around or, conversely, a smaller, less lavish area of residential buildings.

If you use the word ‘estate’ in the same sentence as ‘death’, however, it has a completely different meaning and is something we should all know about.

So what is the meaning of estate in UK law and what constitutes an estate after death? Read on to find out all you need to know.

What is an estate when someone dies?

An estate after death is made up of absolutely everything a person owned when they were alive and can include their property (house or land), a registered business, personal possessions, cash kept at home or money held in a building society or bank accounts, shares and bonds, and any debts owed to or by the person that died.

If a deceased person made a will, an estate will be dealt with by the executor(s) and it is usually overseen by a solicitor (who can also be one of the executors).

The solicitor/executors will apply for what is called a grant of probate which is a document that officially gives them legal permission to deal with the deceased’s estate and distrubute it as per the will or intestacy rules ('grant of probate' is referred to as ‘letters of administration’ if the deceased did not make a will).

However, if the person who died jointly owned property, shares or money then these automatically pass to the surviving owner and no probate is needed. This also applies if the deceased only had savings or premium bonds.

Once all debts and liabilities have been paid from an estate including any inheritance tax payable to HMRC, the remaining proceeds (if any) will be distributed to an estate beneficiary or beneficiaries named in the deceased’s will or, if the deceased did not write a will, according to the rules of intestacy.

What items are considered part of an estate?

The following items, if solely owned by the deceased and not individually bequeathed in a will, can all be considered to be part of an estate:

  • Property: meaning a home and/or other property or land solely owned* by the deceased including intangible property such as patents or copyrights.
  • Possessions: meaning any vehicles (cars, vans, motorbikes or RVs), jewellery, pictures, furniture, ornaments, crockery, musical instruments, antiques, collections, books, etc.
  • Business: meaning any business solely owned by the deceased (or partly owned - i.e. a share or shares in a business) that is a Limited Company or LLP registered at Companies House; sadly, sole proprietorship businesses cease to exist when their owner dies.
  • Money: meaning anything from cash stuffed under a mattress or money held in a safe, bank or building society account.
  • Shares and bonds: meaning any shares, unit trusts or investment bonds owned by the deceased.
  • Debts, liabilities and expenses: meaning any loans, credit cards, overdrafts and mortgages owed by the deceased that must be settled from the estate proceeds before any net estate proceeds are distributed or any money owed to the deceased.
  • Digital assets: meaning photographs, Facebook page, crypto-currency, etc. These must be listed and explained separately in your will.
  • Life insurance policies.
  • Assets held abroad.

*if the deceased jointly owned a property as a ‘joint tenant’ then their share in a property or land automatically passess to the surviving owner regardless of what is stipulated in a will and will not form part of their estate.

However, if the deceased owned a property with one or more parties as a ‘tenant in common’ then their share in a property or land will form part of the estate. For more detailed information about property ownership, take a look at our guides: Joint tenants vs tenants in common or What is a deed of trust?

What assets are not part of an estate?

The following assets are not considered to be part of a deceased person's estate:

  • Any property or other assets the deceased owned as a joint tenant (i.e. joint bank accounts).
  • Possessions specifically bequeathed as a gift in a will or if a surviving spouse is still enjoying the use of them.
  • Living trusts.
  • Assets that are continued to be of low value.
  • Policies or pensions that have a named beneficiary (if there is a trust)

Making a will is essential if you want to make sure that your estate is distributed in accordance with your wishes and to help lessen the burden for your loved ones on your passing. To keep costs low, you can now easily make a will online.

To help you decide what to include or exclude from your estate when you die, check out our related guide: Making a will checklist: estate planning. For more tips and advice, read our other handy guides below.

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