Estate planning can feel overwhelming, especially when faced with complex legal jargon. Whether you’re drafting a will, setting up a trust, or dealing with probate, understanding the essential terms is crucial. This comprehensive estate law glossary breaks down the most important legal definitions to help you navigate the process with confidence.
1. Essential Estate Planning Terms
- Administrator – A court-appointed individual responsible for managing an estate when there is no will or the will fails to name an executor.
- Executor/Executrix – The person named in a will to manage the estate. “Executor” is often used regardless of gender.
- Testator – The person who creates and signs a will.
- Codicil – An amendment or addition to an existing will.
2. Understanding Wills and Probate
- Will – A legally binding document specifying how a person’s assets will be distributed upon their death.
- Probate – The court-supervised process of verifying a will, settling debts, and distributing assets.
- Letters Testamentary – A legal document issued by probate court granting an executor the authority to act on behalf of an estate.
- Probate Court – The specialized court handling estate-related matters, including wills, guardianships, and conservatorships.
- Holographic Will – A handwritten and signed will, valid in some states under specific conditions.
3. Types of Trusts and Their Benefits
- Trust – A legal arrangement where assets are held by a trustee for the benefit of a beneficiary.
- Grantor (or Trustor) – The person who creates a trust.
- Trustee – An individual or entity responsible for managing trust assets.
- Beneficiary – A person entitled to receive assets from a will, trust, or life insurance policy.
- Revocable Trust – A trust that can be altered or revoked by the grantor during their lifetime.
- Irrevocable Trust – A trust that cannot be changed without the beneficiary’s consent.
- Living Trust (Inter Vivos Trust) – A trust created during the grantor’s lifetime, often used to bypass probate.
- Testamentary Trust – A trust established through a will that takes effect after the grantor’s death.
- Spendthrift Trust – A trust that restricts a beneficiary’s ability to access funds, often to protect assets from creditors.
- Charitable Remainder Trust – A trust that allows a donor to retain income benefits while ultimately transferring assets to a charity.
4. Property Ownership & Inheritance Terms
- Joint Tenancy – A form of property ownership where surviving owners automatically inherit a deceased owner’s share.
- Tenancy in Common – A type of property co-ownership where each owner holds a separate share that can be transferred to heirs.
- Life Estate – A type of ownership where an individual has rights to a property only during their lifetime.
- Per Stirpes – A legal term dictating that if a beneficiary predeceases the testator, their share passes to their descendants.
- Per Capita – A method of distributing an estate where each beneficiary receives an equal share.
5. Taxes & Financial Considerations
- Estate Tax – A federal or state tax imposed on a deceased person’s estate before assets are distributed.
- Inheritance Tax – A tax levied on individuals who inherit property or money.
- Gift Tax – A tax applied to assets transferred during a person’s lifetime, beyond exempted amounts.
- Generation-Skipping Transfer Tax – A tax imposed on assets passed to individuals two or more generations younger than the donor.
6. Power of Attorney & Guardianship
- Power of Attorney (POA) – A legal document allowing one person to act on another’s behalf in financial or legal matters.
- Durable Power of Attorney – A POA that remains in effect even if the grantor becomes incapacitated.
- Conservatorship – A court-appointed arrangement where an individual manages another person’s financial affairs due to incapacity.
- Guardianship – A legal relationship granting a person responsibility over a minor or an incapacitated adult.
7. Probate Disputes & Legal Protections
- Escheat – The process where an estate transfers to the state if no legal heirs exist.
- Quiet Title Action – A lawsuit used to settle property ownership disputes.
- Disclaimer – A legal refusal to accept an inheritance or gift.
- Constructive Trust – A court-imposed trust to prevent unjust enrichment due to fraud or wrongdoing.
8. Estate Planning for Peace of Mind
Proper estate planning ensures that your assets are protected, loved ones are provided for, and your final wishes are honored. Whether you’re drafting a will, creating a trust, or preparing for probate, understanding these terms can help you make informed decisions.