Click on a term below to jump to that term's definition.
Administrator |
Under the Uniform Probate Code, this term is now personal representative, and refers to the person named in a will to carry out the settlement of the estate. |
Advance medical directive |
Can be three different instruments: A living will, power of attorney for health care, or medical power of attorney and a healthcare proxy. These documents state what kind of treatment you would like in medical emergencies and appoint someone to make medical decisions on your behalf if you are incapacitated and unable to make your own decisions. |
beneficiary |
The person or organization who receives property under a legal document such as a will, trust or insurance policy. |
bequest |
Two types: A specific bequest is a gift by will of an identified type of property, for example, a car or home. A general bequest is a gift from the general assets of the estate. |
Closely-Held business |
A business organization in which the ownership is held by a limited number of people often within the same family rather than owned by the public at large. |
Community property |
Property acquired during marriage in a community-property state, except for property obtained prior to marriage or through gift, inheritance and court award. |
Conservator |
A person appointed by the court to act on behalf of someone who has become mentally or physically incapacitated, or is too young to act alone. Often acts with respect to the ward's property rather than with respect to the ward's personal matters. |
Credit shelter trust |
A way for couples to reduce federal estate taxes when their combined assets exceed the allowable exemptions. A credit shelter trust enables them to take full advantage of the federal estate tax applicable exemption amount. |
Decedent |
The person who has died. |
Deed |
A legal instrument used to transfer title to real property. |
Discretionary trust |
A trust in which the creator, or grantor, grants the trustee license to make specified decisions regarding the trust, including decisions concerning disbursements to the beneficiaries. |
Durable Power of Attorney |
A legal document that allows an individual to appoint someone else (proxy) to make medical or health care decisions, in the event the individual becomes unable to make and/or communicate such decisions personally. If a power of attorney is not specifically made durable, it automatically expires if the principal becomes incapacitated. |
Estate |
All the property one owns or has an interest in at death. |
Estate plan |
A strategy for leaving property to loved ones and minimizing the impact of federal and state estate taxes. |
Estate tax |
Also called the death tax. A tax imposed by the federal government and by some states on the transfer of property at death. |
Executor |
A person chosen by the decedent and named in the will to manage the decedent's affairs and settle the estate. Under the Uniform Probate Code, now referred to as Personal Representative. |
Fiduciary |
A person entrusted and legally and ethically obligated to act in the best interests of someone else. A trustee, personal representative, conservator or guardian is a fiduciary. |
Grantor |
Creator of a trust, also known as the settler or trustor. |
Guardian |
A person legally empowered and charged with the duty of taking care of another who, because of age, intellect, or health, is incapable of managing his or her own affairs. The guardian manages the person. A conservator manages the property of a minor or incapacitated person. A person can be appointed both guardian and conservator. |
Health care proxy |
A type of advance medical directive in which a person is named to act on someone else's behalf in a medical situation. |
Heir |
Either a person legally entitled to receive property from a family member who died without a will, or in the modern usage of the word, anyone who inherits something from a decedent's estate. |
Inheritance |
Property received from someone who has died. |
Inheritance tax |
An assessment on the portion of an estate received by an individual. It differs from an estate tax, which is levied on an entire estate before it is distributed to individuals. The inheritance tax is usually progressive and generally determined by the amount of property received by the beneficiary, as well as by the heir's relationship to the deceased. The U.S. government levies only an estate tax. Some state governments levy inheritance and estate taxes. |
Intestate |
Dying without a will. |
Inter vivos trust |
Inter vivos is another way of saying living, so this refers to a living trust. A trust set up during the trust creator's lifetime. When the creator, also called the grantor, dies, it becomes irrevocable. |
Irrevocable trust |
A trust that cannot be changed or altered. Taxable income from the trust goes to the beneficiaries or to the trust itself. |
Joint Tenancy |
A form of property or account co-ownership. When one of the joint tenants dies, his or her share of the ownership passes automatically to the other owner. Also referred to as Joint Tenancy with Rights of Survivorship or JTWROS. |
Living trust |
A living trust is also known as a revocable living trust or an inter vivos trust. |
Living will |
A legal document that allows a person to make decisions about medical treatment in advance. Living wills also include what medical treatments you would prefer and what sort of life-prolonging efforts should be made. Living wills are often created when a person has a terminal medical condition. |
Marital deduction |
A provision for leaving property and assets to a spouse without incurring estate or inheritance taxes. |
Medical power of attorney |
A power of attorney document that allows you to appoint someone to make medical decisions for you. |
Minor child |
A child who has not reached the age of majority, which varies from state to state. In general, someone under the age of 18. |
Pay on death (POD) account |
A designation on a bank account, retirement account or government bond naming someone to receive the account value upon your death. |
Personal property |
Assets whose ownership arises either out of physical possession of the property, or as the result of a document showing ownership. Examples: livestock, machinery, stored grain, bank deposits, stocks and bonds, checking and savings accounts, automobiles and other transportation and recreational vehicles. |
Pour-over will |
A will that transfers or pours probate (estate) assets over into a pre-existing trust. |
Power of attorney |
A document in which the signer authorizes someone to conduct business in his or her name -- signing title documents and checks, for example. A durable power of attorney goes into effect right away and lasts until the person who grants the power of attorney dies or cancels it. A springing power of attorney goes into effect when the granter can no longer take care of himself and the springing power of attorney will state the circumstances which cause the document to go into effect. |
Probate |
A state court proceeding that verifies the validity of a will or appoints an administrator to settle a decedent's estate and distribute property to heirs if there is no will. |
Qualified domestic trust (QDOT) |
A trust arrangement where a noncitizen spouse can take advantage of the unlimited marital deduction. The assets placed in a QDOT are taxed when the surviving spouse dies or receives a non-hardship distribution of trust assets during his lifetime. |
Qualified personal residence trust (QPRT) |
A trust in which the grantor basically passes ownership of her home to heirs at some future date. If the grantor dies before that time, the house is still included in the estate. If she dies after the term of the trust, then the house is not included in the estate -- and will not be included in calculating the estate tax payable. One condition that may be included in the trust terms is that if the home passes to the beneficiaries at the end of the trust term and the grantor wishes to continue residing in the residence, the child or children will lease the home back to the creator of the trust. |
Qualified Terminable Interest Property trust (QTIP) |
A trust that allows the creator, or grantor, to control what happens to the assets in the trust after the surviving spouse dies. The surviving spouse must receive all trust income and after he or she dies, the trust corpus passes to the beneficiaries chosen by the first spouse that had died. This trust is commonly used in cases where there are children from a previous marriage. |
Real property |
Permanent, nonmovable property, such as land and buildings. |
Residuary estate |
The remaining part of an estate after debts, taxes, fees and special bequests have been paid and other distributions made. |
Revocable trust |
A trust that can be modified and altered by the grantor at any time during life. The grantor can also terminate the trust during his lifetime, with all property reverting to him. A revocable living trust is a trust into which a grantor places his property with instructions for its distribution and management. |
Taxable estate |
All property and property interests owned at death that are subject to estate taxation. |
Tenants in common |
A type of joint ownership without rights of survivorship. If an owner dies, his or her portion of ownership is included in the estate and passes by will or laws of intestacy rather than automatically passing to the other owner(s), or tenants. Ownership interests may be unequal. |
Testamentary trust |
A trust established within a will containing provisions that will continue after the death of the grantor/will maker. |
Trust |
An arrangement for holding, investing and managing property on behalf of one or more beneficiaries. |
Trustee |
A person or entity named in the trust to manage the assets of a trust and distribute them according to the terms of the trust. |
Will |
A legal instrument used to direct the disposition of the will maker's property upon death. Also names an executor and a guardian for dependents. |
Witness |
A person who observes the signing of a will and attests to the signature. |
