Estate planning glossary
To help you better understand what you’re planning for, we created a dictionary of terms and definitions most commonly used by estate planning professionals.
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Advance Healthcare Directive
What an advance directive? An Advance Healthcare Directive is a legal document in which an individual specifies their preferences regarding medical treatment, end-of-life care, and the disposition of their remains. ...
Asset Transfer Letter
In estate planning, an asset transfer letter is a document shared with financial institutions to communicate the transfer of ownership of assets like real estate, bank accounts, personal property, or...
Attorney-in-Fact
An attorney-in-fact is the person designated by a power of attorney document to make decisions for an individual about their legal or financial matters in the event they cannot make...
What is an advanced directive?
Life is unpredictable. Even if you’re at the pinnacle of health, running marathons and doing one-handed pushups, you could find yourself injured in a car wreck tomorrow. That’s why an...
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Charitable Lead Trust
What is a charitable lead trust (CLT)? A charitable lead trust (CLT) is a type of trust established by an individual to provide regular payments to one or more charities...
Charitable Remainder Trust
What is a charitable remainder trust? A charitable remainder trust (CRT) is a type of irrevocable trust that allows an individual (the grantor) to transfer assets to one or more...
Community Property State
A community property state is a state that recognizes assets and debts acquired during a marriage as being jointly owned and belonging equally to both spouses, regardless of which spouse...
Conservator
What is a conservator? A conservator is appointed to manage the financial and/or personal affairs of a person who a court has deemed incapable of doing so themselves. The conservator...
Creditor
A creditor is any party that has delivered a product, service, or loan to another party (the debtor), with the expectation that the debt will be repaid in the future....
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Decanting Provision
A decanting provision is a method by which a trustee may remove or modify the provisions of an irrevocable trust to distribute its assets into a new trust with different...
Deceased Spousal Unused Exemption (DSUE)
What is the DSUE? The Deceased Spousal Unused Exemption (DSUE) is a provision in the United States federal tax law that allows the surviving spouse to utilize any unused federal...
Divisible Pot Trust
A divisible pot trust is a type of trust in which assets are divided into separate shares (or pots) for different beneficiaries. For legal and administrative purposes, each pot is...
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Estate
An estate includes everything that comprises an individual’s net worth at the time of their death, including all real estate, possessions, financial securities, cash, and other assets that the individual...
Estate and Gift Tax Exemption
The estate and gift tax exemption refers to the amount of money or property an individual can transfer to others during their lifetime through gifting or upon their death as...
Estate Planning
Estate planning is the process of making arrangements for how an individual’s assets should be distributed after their death. Typically, the goals of estate planning are to maximize the benefits...
Estate Tax
Estate tax is a tax that may be levied by the federal and/or state government on a person’s estate after their death, which must be paid before any property can...
Executor
The executor of an estate is the person responsible for settling the estate and financial affairs of a deceased person according to the terms of their will. The executor, who...
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Family Trust
What is a family trust? A family trust is one of many different types of trusts to help individuals pass on their assets according to their wishes. The person creating...
Fiduciary
A fiduciary is a person or entity with the legal and ethical obligation to act in the best interest of a beneficiary or principal while managing their assets, finances, or...
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General Assignment of Assets
A document commonly included in California estate plans that establishes the intent for all property, including property without an official title document, to be in the Trust.
Gift Tax
The gift tax is a tax imposed on the transfer of assets from one person to another during the giver’s lifetime. It differs from estate tax, which is a tax...
Grantor
A grantor is an individual or entity that establishes a trust and transfers assets into it. The grantor—also known as the settlor, trustor, or creator—defines the trust’s terms and provisions,...
Guardian
A guardian is an individual or entity appointed to make personal and/or financial decisions on behalf of a minor child or incapacitated adult who cannot make such decisions themselves. The...
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Health Care Agent
A healthcare agent is a person appointed to make medical decisions on behalf of another person, known as the principal, in the event that the principal becomes incapacitated or unable...
Heirs-at-Law
Heirs-at-law are the individuals who inherit a deceased person’s assets when there is no will or estate plan to specify how assets should be distributed. Heirs-at-law are also known as...
Holographic Will
What is a holographic will? A holographic will is a handwritten document that outlines how someone wants their assets to pass upon their death. It is simply a handwritten last...
Homestead Exemption
A homestead exemption is a legal provision that can reduce the assessed value of a homeowner’s primary residence for property tax purposes. The purpose of the homestead exemption is to...
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Inheritance
Inheritance refers to assets or wealth that an individual bequeaths to a person or organization following the individual’s death. The recipient of the inheritance is referred to as an heir...
Inheritance Tax
State taxes that may be levied on inherited assets.
Inter Vivos Trust
What is an inter vivos trust? An inter vivos trust is a type of trust created by an individual or a married couple to hold and manage assets during their...
Irrevocable Trust
An irrevocable trust is a type of trust agreement in which the grantor (the person who established the trust) cannot modify or revoke the trust’s terms or conditions, with rare...
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Letter of Wishes
A Letter of Wishes is a non-binding document that might accompany a person’s will or trust to provide guidance or explanations regarding the distribution of their assets. Unlike a will...
Living Trust
A living trust is a legal arrangement that individuals create during their lifetime to hold and manage assets. Unlike a will, which goes into effect after a person’s death, a...
Living Will
A living will is a legal document that allows individuals to specify their wishes regarding medical treatment and end-of-life care in the event that they become incapacitated and unable to...
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Mandatory Distribution
Mandatory distribution is a provision within a trust document that requires the trustee to distribute the assets according to the specified criteria or schedule, regardless of the beneficiaries’ needs, tax...
Marital Trust
What is a marital trust? A marital trust, also known as a marital deduction trust, is a trust set up by an individual to provide for their surviving spouse upon...
Medical Authorization of Minor Children
Medical authorization of minor children is the legal authority granted to a designated individual to make medical decisions on behalf of a minor child in the event of an emergency....
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Postnuptial Agreement
A postnuptial agreement is a legal contract entered into by a couple after they are already married that outlines the rights and responsibilities of each spouse in the event of...
Pour-over Will
A pour-over will is a legal document that typically works in conjunction with a revocable or irrevocable trust. It is designed to transfer, or “pour over,” an individual’s remaining assets...
Power of Attorney
A power of attorney (POA) is a legal document that grants a person the authority to act on behalf of another person, known as the principal, in legal, financial, or...
Prenuptial Agreement
A prenuptial agreement, often called a prenup, is a legal contract entered into by two people before they get married. The agreement outlines the division of assets and financial responsibilities...
Probate Fees
Probate fees, which can also be called estate or probate taxes, are fees imposed by the court or government for the processing of a deceased person’s estate. Probate fees can...
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Recorded Deed
A recorded deed is a legal document that transfers ownership of property, like a house or land, from one party to another. When a deed is recorded, it means that...
Revocable Trust
A revocable trust, which is also called a living trust or inter vivos trust, is a legal arrangement in which a grantor transfers ownership of assets into a trust for...
Rule Against Perpetuities
The Rule Against Perpetuities is a complex legal principle that limits the duration of certain types of future interests in property. It has been subject to various interpretations and exceptions...
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Settlor
A person or institution that conveys ownership of a property or creates a trust; a.k.a. creator/grantor/trustor.
Situs
Situs refers to the physical location or jurisdiction where property or assets are located for legal or taxation purposes. Situs is important because it can have significant implications in matters...
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Tangible Personal Property Memo
A tangible personal property memo is a legal document that is sometimes used in estate planning to provide instructions for the distribution of certain personal belongings. Often these items include...
Testamentary Trust
A testamentary trust is a type of trust that is created within a person’s will and comes into effect upon the death of the person making the will, known as...
Trust
A trust is a legal arrangement in which one party, known as the settlor, grantor, or trustor, transfers legal ownership of assets to another party, the trustee, for the benefit...
Trust Certification
What is a certificate of trust? A certificate of trust, also known as a trust certificate, certification of trust document, or an affidavit of trust, is used to represent and...
Trustee
A trustee is an individual or entity appointed to manage the assets in a trust and administer the trust according to its specific terms. The trustee has a fiduciary duty...
Trust Protector
A trust protector is a third-party individual or entity appointed within a trust agreement to oversee and protect the interests of the beneficiaries and ensure the trust is administered according...
Trustor
A trustor is the individual who creates a trust, and is also commonly referred to as the settlor or grantor of a trust. A trustor establishes a trust by defining...
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