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  • Marjorie E. Wolasky, P.A.

Estate Planning Glossary

Updated: Aug 26, 2019

A

Administration: Process during which the executor or personal representative collects the decedent's assets, pays all debts and claims, and distributes the reside of the estate according to the will or the state law intestacy rules (when there is no will).

Advance Directives: Legal documents that allow you to make decisions about end-of-life care ahead of time

Attorney-in-fact: The person named as agent under a power of attorney to handle the financial affairs of another.

B

Beneficiary: A person who will receive the property from an estate or trust.

Bypass Trust: Trust that is sheltered from the federal estate tax in the decedent's estate tax exemption amount.

C

Certificate of Trust: A shortened version of a Trust that verifies the Trust's existence, explains the powers given to Trustee, and identifies the successor Trustees, it does not reveal any of the information about Trust assets or beneficiaries.

Codicil: A formally executed document that amends a Will so that a complete re-writing is not necessary

Co-Grantors: Two or more persons who establish one living trust together.

Co-Trustees: Two or more individuals who have been named to act together in managing a trust's assets. Can also be a corporate Trustee.

Contest: To dispute or challenge the terms of a Will or Trust.

Corporate Trustee: An institution, generally a bank or Trust company, that specializes in managing Trusts.

Creditor: Person or institution to whom money is owed.

D

Deceased: One who has died

Deed: A document that lets you transfer title of your real estate to another person(s). See Warranty Deed and Quit Claim Deed.

Distribution: Payments in cash or assets to one who is entitled to receive them.

Durable Power of Attorney: A legal document that gives another person full or limited legal authority to sign your name on your behalf in your absence. Valid through incapacity, ends at death.

E

Estate: Assets and debts left by an individual after death.

Executor: Person or institution named in a Will to carry out its instructions. Also called personal representative.

F

Fiduciary: Person having the legal duty to act primarily for another's benefit. Implies great confidence and trust, usually associated with a Trustee.

Funding: The process of transferring assets to your living trust.


G

Generation Skipping Transfer Tax (GSTT): A steep tax on assets that "skip" a generation and are left directly to grandchildren and younger generations.

Grantor: The person who sets up or creates the trust. Also called Settlor.

Guardianship: A court-controlled legal relationship created when a person is assigned to take care of children or incompetent adults. Also called a conservatorship.

H

Homestead Exemption: Portion of your residence that cannot be sold to satisfy a creditor's claim while you are living.

I

Incompetent: Unable to manage one's own affairs, either temporarily or permanently.

Inter vivos: A trust that is created while you are living rather than when you die, i.e. a revocable living trust.

Irrevocable Trust: A trust that cannot be changed (revoked) or cancelled once it is set up.

Inteste: Without a will.

J

Joint Ownership: A form of ownership in which two or more persons own the same asset together. Types of joint ownership include joint tenants with rights of survivorship, tenants in common, and tenants by entirety.

Joint Tenants with Rights of Survivorship: A form of joint ownership in which the deceased owner's share automatically and immediately transfers to the surviving joint tenant(s).

L

Liquid Assets: Cash and other assets that can be easily converted into cash.

Living Probate: The court supervised process of managing assets of one who is incapacitated.

Living Trust: A written legal document that creates an entity to which you transfer ownership of your assets. Contains your instructions for managing your assets during your lifetime and for their distribution upon your incapacity or death. Avoids probate at death and court control of assets at incapacity. Also called a revocable inter vivos trust and is created during ones lifetime.

Living Will: A written document that states you do not wish to be kept alive by artificial means when the illness or injury is terminal.

M

Medicaid: A federally-funded health care program for the poor and minor children.

Medicare: A federally-funded health care program, primarily for Americans over age 65 who are covered by Social Security.

Minor: One who is under the legal age for an adult, which varies by state.

N

Net Estate: The value of an estate after all debts have been paid.


O

P

Payable-on-Death Account: A bank account that will transfer to the beneficiary who was named when the account was established.

Per Capita: A way of distributing your estate so that surviving descendants will share equally, regardless of their generation.

Per Stirpes: A way of distributing your estate so that your surviving descendants will receive only what their immediate ancestor would have received if he/she had been living at your death.

Personal Property: Movable property, such as furniture, cash, stocks, etc.

Pour-Over Will: Often used with a living Trust. It states that any assets left out of your living trust will become part of your living trust upon death.

Probate: The legal process validating a will, paying debts, and distributing assets after death.

Probate Estate: The assets that go through probate after you die, such as assets in your name and those paid to your estate.

Probate Fees: Legal, executor, appraisal, and court costs associated with the probate process. These are paid from the assets in the estate before the assets are fully distributed.

Q

Quit Claim Deed: Document that allows you to transfer title to real estate, with this deed, the person transferring makes no guarantees, but transfers all of his/her interest in the property.

R

Real Property: Land and property that is permanently attached to land.

Recorded Deed: A deed that has been filed with the county land records to create public record of all changes of ownership.

Revocable Trust: A Trust in which the person setting it up retains the power to change (revoke) or cancel during their lifetime.

S

Special Gifts: A separate listing of special assets that will go to individuals or organizations after your incapacity or death.

Special Needs Trust: Allows you to provide for a disabled loved one without interfering with government benefits.

Spendthrift Clause: Protects assets in a trust from a beneficiary's creditors.

T

Tenants-in-Common: A form of joint ownership in which two or more personas own the same property, at the death of the tenant in common, his/her share is transferred to his/her heirs.

Tenants-by-Entirety: A form of joint ownership in some states between husband and wife. When one spouse dies, his/her share of the asset automatically transfers to the surviving spouse.

Testamentary Trust: A trust in a will, can only go into effect at death and does not avoid probate.

Testate: Someone who dies with a valid will.

Trust: An entity that holds assets for the benefit of certain other persons or entities.

U

Uniform Transfer to Minors Act (UTMA): Law enacted that lets you leave assets to a minor by appointing a custodian, then minors receive the assets at legal age.

V

W

Warranty Deed: Document that allows you to transfer title to real estate, the person guarantees that the title is being transferred clear, and if it isn't the person making the transfer is liable.

Will: A written document with instructions for disposing of assets after death, can only be enforced through probate court.

X

Y

Z

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