What is an Estate of Deceased?

From bankruptcy estates to probate estates, there are many types of “estates” that appear to meet a general definition. An estate is a separate entity from an individual that holds an individual’s assets. As an example, a bankruptcy estate is to hold an individual’s assets during the process of bankruptcy. An estate of deceased is formed after someone’s death to control their assets though they have passed. A third party who is trusted is in control of an estate; and this person will be able to open a bank account for the estate etc. This may be someone who has been selected for the task (such as an estate of the deceased) or someone assigned by the government (in the case of bankruptcy estates).

There are special income tax forms for estates and trusts, and because they are treated as separate entities, they need to file taxes on their own. This also means that an estate is going to have its own EIN. An estate is usually not permanent, but rather transitional: eventually, funds are disbursed and the estate is dissolved. Trusts, on the other hand, can be an indefinite way of managing and controlling money.

Written by Maurice Mallory