Common Terms

Advance Health Care Directive: A legal document that specifies a person's wishes regarding medical treatment in the event they become incapacitated.

Asset Protection Trust: A trust designed to protect assets from creditors or legal judgments.

Beneficiary: A person or entity designated to receive assets or benefits from a will, trust, or insurance policy.

Blended Family: A family unit composed of a couple and their children from previous relationships.

Codicil: A legal document used to make amendments or additions to an existing will.

Community Property: Property acquired by a married couple during their marriage, typically subject to equal division upon divorce or death.

Conservatorship: Legal proceedings to appoint a guardian or protector for an individual unable to make decisions for themselves.

Decedent: A person who has died.

Digital Estate: Online accounts, digital assets, and electronic communications that comprise a person's digital footprint after death.

Durable Power of Attorney: A legal document that appoints someone to make financial or legal decisions on behalf of another person, which remains valid even if the person becomes incapacitated.

Estate: All of a person's assets, including property, investments, and personal belongings, at the time of their death.

Estate Planning: The process of arranging for the management and disposal of one's estate during their lifetime and after death.

Estate Tax: A tax imposed on the transfer of a person's estate upon their death, if the estate's value exceeds a certain threshold.

Executor: A person appointed in a will to carry out the wishes of the deceased, including managing the estate and distributing assets.

Fiduciary: A person or institution legally entrusted to act in the best interest of another party, such as an executor, trustee, or guardian.

Generation-Skipping Transfer Tax (GSTT): A tax imposed on gifts or bequests to individuals who are two or more generations below the donor, aimed at preventing wealthy individuals from avoiding estate taxes.

Gift Tax: A tax imposed on the transfer of property or assets by one person to another while receiving nothing, or less than full value, in return.

Guardian: A person legally appointed to make decisions for and take care of a minor child or an incapacitated adult.

Guardian ad Litem: A person appointed by the court to represent the interests of a minor or legally incompetent person in legal proceedings.

Health Care Proxy: A legal document that appoints someone to make medical decisions on behalf of another person if they are unable to do so themselves.

Heir: A person who inherits property, assets, or titles from someone who has died.

Inheritance Tax: A tax imposed on the transfer of assets or property inherited by a beneficiary.

Intestate: Dying without a valid will, leading to the distribution of assets according to state laws. Irrevocable Trust: A type of trust that cannot be modified or terminated without the consent of the beneficiaries.

Joint Tenancy: A form of property ownership where two or more people own equal shares of the property, with rights of survivorship.

Letter of Instruction: A non-legal document that provides guidance to the executor or beneficiaries regarding the deceased's wishes for funeral arrangements, asset distribution, and other matters.

Living Trust: A legal arrangement where a person's assets are transferred to a trustee during their lifetime, to be managed for the benefit of the trust's beneficiaries.

Living Will: A legal document that outlines a person's preferences for medical treatment in the event they become incapacitated and unable to communicate their wishes.

Marital Deduction: A provision in tax law that allows an individual to transfer assets to their spouse without incurring gift or estate taxes.

Per Stirpes: A method of distributing an estate where the share of a deceased beneficiary is divided equally among their descendants.

Personal Representative: A person appointed to handle the estate administration process, including probate, if necessary.

Pet Trust: A legal arrangement that provides for the care and maintenance of a pet after the owner's death.

Power of Appointment: Authority granted to a person to designate who will receive certain property or assets.

Power of Attorney: A legal document that grants authority to another person to act on one's behalf in legal, financial, or medical matters.

Probate: The legal process of validating a will, paying debts, and distributing assets of a deceased person's estate under court supervision.

Residuary Estate: The remaining assets of an estate after specific gifts have been distributed and debts and taxes have been paid.

Revocable Trust: A trust that can be modified or terminated by the grantor during their lifetime.

Special Needs Trust: A trust designed to provide for the needs of a beneficiary with disabilities without disqualifying them from receiving government benefits.

Spendthrift Trust: A trust that restricts a beneficiary from accessing the trust funds directly and protects the assets from creditors.

Successor Trustee: A person or institution designated to take over the duties of a trustee if the original trustee is unable or unwilling to fulfill their responsibilities.

Testator: A person who has made a valid will.

Trust: A legal arrangement where assets are held by a trustee for the benefit of one or more beneficiaries.

Trustee: A person or institution appointed to manage assets held in a trust and distribute them according to the trust's terms.

Uniform Transfers to Minors Act (UTMA): Legislation that allows adults to transfer assets to a minor without the need for a formal trust, with a custodian managing the assets until the minor reaches adulthood.

Will: A legal document that specifies how a person's assets should be distributed after their death.

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