Glossary of Common Estate Planning Terms
This glossary provides a list of definitions that may allow a non-lawyer person to get a general knowledge of typical Estate Planning Terms. Note, that legal terms may vary to some extent from to state and may have distinctive meanings by the context in which they are used.
Administrator: A person appointed by the court to manage and take charge of the assets and liabilities of a decedent who has died without making a valid will.
Ademption: A situation in which a special gift of property intended for a beneficiary at person’s death can’t be given because the property was given to the beneficiary during the deceased’s lifetime or because the property that was to be given as a special gift has been sold or otherwise disposed of by the owner.
Bequest: Gift of personal property made under the terms of a Last Will and Testament. 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.
Codicil: An amendment or addition to a will executed with all the formalities of the will itself.
Common Disaster Clause: A statement in a will telling how property is to be distributed if would-be devisees die from the same accident.
Devisee: Any person to whom property has been bequeathed in a will.
Estate : Everything you own; all of your assets (whether real property or personal property) and liabilities.
Estate Planning: Process designed to conserve estate assets before and after death, distribute property according to the individual’s wishes, minimize federal and state taxes and provide for the family’s financial needs.
Executor or Executrix: A person who administers the property of a person who dies with a will.
Grantor: A person who sets up or creates the trust; also called a settlor, trust creator, trust maker, or trustor.
Holographic will: A handwritten will that is dated and signed by the person making the will.
Irrevocable trust: A trust created when the grantor permanently transfers trust property to the trustee and given up the power to alter, amend, or terminate the trust either entirely or in part.
Issue: Descendants that include all people in the direct line of inheritance with the decedent.
Intestacy: When a person dies without a legal will and distribution is overseen by a probate court.
Legatee: A recipient of a bequest made in a will.
Letters testamentary: A document issued by the court informing the named executor of his or her appointment and empowering him or her to settle an estate in accordance with the will.
Living (Inter-Vivos) Trust: A trust that is created by the trustor and funded during his or her lifetime.
Partial intestacy: When the will does not make a complete disposition of the estate.
Per Stirpes: A way of distributing an estate so that the surviving descendants will receive only what their immediate ancestor would have received if he or she had been alive at the time of death.
Power of Attorney: A written legal document that gives an individual the authority to act for another.
Probate: The process of the personal representative gathering all the property of someone who died, paying all just debts and taxes, and distributing the balance to the devisees designated in the will or to the heirs as prescribed by the legislature where there is no will or the will is defective.
Probate Court: The court with the authority to recognize a document as a deceased person’s will.
Pour-over will: A will that transfers or pours probate (estate) assets over into a pre-existing trust.
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.
Spendthrift trust: A trust that is designed to protect the trust assets from the beneficiary’s creditors.
Special needs trust: A type of irrevocable trust that is designed to provide for the supplemental needs of a disabled beneficiary who is receiving government benefits, such as SSI (Supplemental Security Income) and Medicaid.
Tangible Personal Property: Property that you can touch, such as cars, dishes, jewelry, tools, guns, sporting equipment, etc.
Testator or testatrix: Decedent (male or female) who has made a legally valid will.
Testate: When a person dies with a valid will.
Trust: An agreement to hold property or assets for the benefit of a beneficiary.
Trustee: A fiduciary who has an obligation to manage property for the beneficiary of the trust.
Undue influence: Exerting extreme pressure and persuasion so as to cause a Testator/Testatrix to lose their own free will and force them to change the terms of their Last Will and Testament in favor of the person or family members of the person exerting the pressure.
Will: Written document that sets out the person’s wishes about how his estate should be taken care of and distributed after death.
