ESTATE PLANNING BASICS: A VOCABULARY

The legal profession has its own, specialized vocabulary. This is especially true when dealing with estates, estate planning, wills or trusts. What follows is a glossary, or vocabulary, of common terms used in estate planning. It should be useful if you come across unfamiliar words or terms as you read this series. Beneficiary: A person or institution who derives benefits from the creation of a trust, proceeds of an insurance policy, bond, or retirement fund when the owner dies. There can be one or more beneficiaries. Codicil: An amendment to a will. Common Disaster Clause: A statement in a will telling how property is to be distributed if both devisees die in the same accident. Conservator: A person who is appointed by a court to manage the estate of a person who, because of age, health, or intellect is incapable of managing his or her own affairs. See Guardian. Decedent: The person who died. Deed: A legal instrument used to transfer title of real property in the eyes of the law. Devisee: A person to whom real property (real estate and the buildings attached to it) or personal property is transferred by will. Durable Power of Attorney: A document by which a person appoints a legal representative to manage affairs if he or she is unable to do so. Estate: The real and personal property that a person owns. Estate Tax (Federal): Taxes assessed by the federal government upon a decedent’s right to transfer property. Executor: A person or institution (e.g., a bank or credit union) named in a will to carry out the settlement of an estate. This person (institution) pays the debts, manages the property and later distributes it according to the provisions of the will. Also known as a Personal Representative. Fiduciary: Someone entrusted with managing an estate; includes executor, guardian, conservator and trustee. Gift: A lifetime transfer of property without receiving payment