Glossary of Estate Planning Terms

On behalf of David Whitlock at Whitlock Canter LLC

Administrator: A person appointed by the Surrogate’s Office who manages your estate if you die without a will. Also, a person appointed by the court if the personal representative(s) named in your will fails or ceases to carry out his/her duties.

Attorney-in-fact: An individual designated in a power of attorney to act as the agent of the person who executed the document.

Advance Health Care Directive: A binding legal document that declares what your wishes are regarding the use of life-sustaining treatment if you should become terminally ill or permanently unconscious. Each state has separate statutory definitions and requirements regarding living wills.

Advance Health Care Proxy: A written document in which an individual designates another person to make health care and health-related decisions in the event that the individual becomes incapacitated.

Beneficiary: A person who receives benefits, funds or personal property from a will, contract, or insurance policy.

Combined Health Care Directive: A legal document that combines all of the provisions of an Advance Health Care Proxy and Advance Health Care Directive (see definitions above).

Decedent: A person who has died.

Durable Power of Attorney: A written document in which an individual designates another person to act as such individual’s agent in financial matters. The document is effective immediately upon execution regardless of incapacity.

Estate: An individual’s property and assets after death.

Estate tax: A tax that is imposed at one’s death and on the transfers of some types of property.

Executor: A person named in a will who settles your estate when you die. The executor collects and distributes your property and pays off any debts according to the terms of your will.

Fiduciary: A person, corporation, or association that is legally responsible for the management, investment, and distribution of funds of another.

Grantor: The person who creates a Trust. Also referred to as a “Settlor”.

Gross estate: The total value of property and assets that an individual has at death before any fees, expenses and estate and inheritance taxes are deducted.

Guardian: A person, corporation or agency with the legal authority (or court ordered responsibility) to care for another.

Incapacity: The lack of mental ability to act on your own behalf with respect to financial matters.

Inter vivos trust: A trust that is created during a person’s lifetime.

Intestate: This is a term used to refer to a person who dies without a will.

Joint tenancy with right of survivorship: A title that is often placed on co-owned property. At the death of one owner, the other owner will be legally entitled to sole possession of the property, regardless of what provisions are made in a will. A husband and wife often use this form of ownership.

Living trust: A revocable trust established during a grantor’s lifetime to provide for the placement of some or all of the grantor’s property during his/her lifetime and how such property should be distributed upon death.

Marital deduction: A federal tax deduction that allows one spouse to pass his or her estate to the other spouse without having to pay estate or gift taxes.

Personal Representative: Person named in a will to manage your estate after you die. Often referred to as the Executor/Executrix.

Power of appointment: A right given to another in a written instrument that allows the other to decide how to distribute your property. A “general” power of appointment places no restrictions on the other. A “limited” or “special” power of appointment places restrictions on who may receive distributions.

Power of Attorney: A written document that allows one person to act on behalf of another.

Probate: A process whereby a court reviews your will to make sure that it is authentic and where an executor or administrator distributes and manages a decedent’s property.

State death or inheritance taxes: A tax on the privilege to acquire property through inheritance.

Trust: A written document providing that your property be held by one (the “trustee”) for the benefit of another (the “beneficiary”). A trust may be created during your lifetime (inter vivos trust) or after your death (“testamentary trust”).

Trustee: A person named in a trust document who will manage the property owned by the trust and distribute the trust income or property according to the terms of the trust document. A trustee may be an individual or an organization.

Will: A document that directs how your property shall be distributed upon your death. Each state has separate requirements regarding how wills are to be drafted and executed.

Disclaimer

This publication and the information included in it are not intended to serve as a substitute for consultation with an attorney. Specific legal issues, concerns and conditions always require the advice of appropriate legal professionals.