Common Words Use in Estate Planning and What they Mean
The following are common words used in estate planning:
- Administrator. An administrator is a court appointed person ordered to manage the estate of a deceased person who died intestate.
- Attorney-in-Fact. An attorney-in-fact is a legal document that designates a person or business to act as an agent of the person who executed the document.
- Beneficiary: A beneficiary is a person specifically designated to receive an asset from a will, contract, or insurance policy.
- Bequest. A gift or personal property made at death.
- Decedent. The decedent refers to the person who passed away.
- Durable Power of Attorney for Healthcare. A durable power of attorney for healthcare is a written legal document that designates a person to make health care and health-related decisions in the event a person (designator) becomes incapacitated.
- Durable Power of Attorney for Property. A durable power of attorney for property is a written legal document that designates a person to make property and property-related decisions on behalf of an incapacitated person.
- Estate Tax. The estate tax is a tax that is imposed on very large decedent’s estate.
- Executor. The will designates an Executor to collect the estate’s property, pay bills, and distribute property and assets according to the terms of the will.
- Fiduciary. A fiduciary, also referred to as a trustee, is legally responsible for the management, investment, and distribution of trust funds.
- Grantor. A person who transfers assets into a trust.
- Incapacity. Incapacity refers to the mental state of a person who is unable to act on his/her own behalf. A person must be of sound mind to draft a will. The court determines whether a person is incapacitated to act on his/her own behalf.
- Intestate. Intestate is a common estate planning term that refers to a person who dies without a will. His/her estate assets will be distributed in accordance to California intestate estate laws.
- Irrevocable Trust. An irrevocable trust is created when a person gives up his/her rights to change the terms of a trust once created. The trust grantor cannot change the terms of an irrevocable trust. Most trust become irrevocable upon the death of the trustee.
- Joint Tenancy with Rights of Survivorship. This legal term refers to how people hold property. When one owner dies, the surviving owner automatically assumes the deceased interest in the property through the right of survivorship.
- Last Will & Testament. This type of document directs how property is to be distributed to beneficiaries and heirs upon a person’s death.
- Pour Over Will. A pour over will refer to a will that distributes everything to a trust.
- Power of Attorney. A power of attorney is a written document that provides one person the legal authority to act on behalf of another.
- Probate. Probate is a court administered process in which the court confirms that validity of a will and allows other people the option to challenge the will.
- Revocable Trust. A revocable trust allows the grantor to amend and make changes to the trust after it has been formed.
- Trustee. A trustee is a person or business that administers a trust.
We hope the above definitions have given you a better understanding of common words used in estate planning. If you are looking to put together an estate plan and want to avoid the high cost of expensive estate planning attorneys, we encourage you to contact A People’s Choice. You may want to check our our estate planning checklist. Not only can we help you understand common words used in estate planning, we can prepare all of your estate planning documents at a fraction of the cost an attorney would charge. Call us today at 800-747-2780.
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