Equity refers to an individual’s net worth, calculated by subtracting their total liabilities from the total value of their assets.
This figure represents the actual value of what a person owns after accounting for debts and obligations. At the time of a person’s death, their equity becomes particularly important in estate planning and the probate process, as it determines the value of their estate to be distributed to heirs or beneficiaries. Equity can include property, investments, savings, and other assets, minus mortgages, loans, and other debts.
It provides a clear picture of a person’s financial position and legacy.