The estate planning learning center for financial advisors

Advance Healthcare Directive

Grants your health care agent the ability to make decisions on your behalf if you are unable to and contains your wishes about medical care, treatment, and the disposition of your remains.

Asset Transfer Letter

To be shared with financial institutions in order to assist in transferring assets to the name of your newly created Trust.

Attorney-in-Fact

Agent designated by your Power of Attorney document to make decisions for you about your non-trust assets in the event you become incapacitated.

Beneficiary

A person or organization who has the right to benefit from the property held in a Trust.

Charitable Lead Trust

An irrevocable trust designed to provide financial support to one or more charities for a period of time with the remaining assets eventually going to family members or other beneficiaries.

Charitable Remainder Trust

Provides a stream of income for family members for the term of the trust before the remaining assets are transferred to one or more charitable organization beneficiaries.

Community Property State

States where all assets acquired during a marriage are owned equally by both spouses.

Conservator

Appointed to supervise the finances of an individual who is found by the court to be incapable of doing so himself or herself.

Creditor

Any party that has delivered a product, service or loan, and is owed money by one or more people.

Decanting Provision

A method by which a trustee may remove or modify trust provisions from an irrevocable trust by pouring/distributing the trust assets from an old trust into a new trust.

Divisible Pot Trust

A single irrevocable trust for all beneficiaries where distributions can be made to any beneficiary at the trustee’s discretion as opposed to separate trusts for each beneficiary.

Estate

Everything comprising the net worth of an individual; including all land and real estate, possessions, financial securities, cash, and other assets that the individual owns or has a controlling interest in.

Estate & Gift Tax Exemption

Under the current administration, an individual can leave up to $11.58M to heirs without incurring federal estate tax, a married couple can leave up to $23.16M.

Estate Planning

The management of how assets will be transferred to beneficiaries when an individual passes away.

Estate Tax

May be levied by the government on the value of one’s estate at death to be paid by the deceased person’s representatives prior to any property being distributed to the intended beneficiaries.

Executor

Responsible for taking the financial actions needed to settle your estate outside of your Trust under the terms of your Will after you die.

Family Trust

An irrevocable trust that allows a portion of your estate to pass to your descendants free of estate tax.

Fiduciary

Responsible for carrying out your wishes and making important decisions when you are unable to act on your own behalf, including after your death.

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

May be levied by the government on the value of a gift made prior to death to be paid by the beneficiary. Giving a gift may reduce the amount of estate tax exemption available upon death.

Grantor

A person or institution that conveys ownership of a property or creates a trust; a.k.a. creator/settlor/trustor.

Guardian

Responsible for taking care of your children in the event that you die while they’re still minors.

Health Care Agent

Designated by your Advance Health Care Directive to help make medical decisions on your behalf at the end of life or any other time you are not able to communicate.

Heirs-at-Law

Your closest relatives that are then living at the time of your death.

Holographic Will

Handwritten and testator-signed document recognized in some states that is an alternative to a will produced by a lawyer.

Homestead Exemption

A legal provision that protects a person’s residence from non-mortgage creditors (including taxing authorities to some degree).

Inheritance

Assets that an individual bequeaths to his or her loved ones after he or she passes away

Inheritance Tax

State taxes that may be levied on inherited assets.

Inter Vivos Trust

Created during your lifetime and put in place to manage your assets during life and after death to avoid probate upon your death; a.k.a. living trust/revocable trust.

Irrevocable Trust

Cannot be modified during the Trustor’s lifetime without the permission of the beneficiaries.

Joint Revocable Trust

Set up by two people (joint grantors) and funded with jointly-owned or separately-owned property.

Letter of Wishes

Can be used in tandem with your Trust document to provide additional guidance to the trustee regarding how the assets should be controlled and distributed.

Living Trust

Created during your lifetime and put in place to manage your assets during life and to avoid probate upon your death; a.k.a. inter vivos trust/revocable trust.

Living Will

Type of advance health care directive which tells your health care provider what types of treatment you want or don’t want should you become incapacitated.

Mandatory Distribution

Distributions of trust income or principal according to a schedule set by the trust document regardless of the beneficiaries’ needs, tax situation, or credit situation.

Marital Trust

Irrevocable trust made up of 50% of shared assets and 100% of any separate assets owned by the first spouse to die.

Medical Authorization of Minor Children

Grants another adult authority to make medical decisions for your minor children in the event of an emergency.

Postnuptial Agreement

Marital agreement executed during marriage to determine the division of a couple’s assets in a divorce or after the death of one spouse.

Pour-over Will

“Pours” assets into your Trust at your death.

Power of Attorney

Designates an “Attorney-in-Fact” or agent who can make decisions for you about your non-trust assets in the event you become incapacitated.

Prenuptial Agreement

Marital agreement executed prior to marriage to determine the division of a couple’s assets in a divorce or after the death of one spouse.

Probate

The legal process of administering a person’s estate after their death; may be avoided if the deceased person properly maintained a trust holding their assets.

Probate Fees

Court costs to be paid by beneficiaries out of estate assets

Recorded Deed

A document showing that you legally own property; must be filed with the appropriate county government office in order to be official.

Revocable Trust

Created during your lifetime and put in place to manage your assets during life and after death to avoid probate upon your death; a.k.a. inter vivos trust/living trust.

Settlor

A person or institution that conveys ownership of a property or creates a trust; a.k.a. creator/grantor/trustor.

Single Settlor Trust

Created and funded by one person as opposed to a joint trust.

Situs

The place to which, for purposes of legal jurisdiction or taxation, a property or Trust belongs

Tangible Personal Property Memo

A letter outlining your wishes in regards to how to dispose of your tangible personal property (e.g., art, jewelry, household goods) as specific gifts to named beneficiaries.

Testamentary Trust

A trust created in a will that goes into effect after the death of the individual as opposed to a living trust.

Trust

An arrangement for owning property where possession of the property is held by one person or organization, but the right to benefit from the property belongs to another.

Trust Certification

A short document used instead of the full Trust document to provide third parties with assurances that the trustees have the power to buy, sell, borrow, or conduct financial transactions in the name of the Trust.

Trust Protector

Person or group (not the settlor, beneficiary, or trustee) appointed to exercise powers affecting a trust and the interest of the beneficiaries to protect beneficiaries from a rogue trustee.

Trustee

A person or organization who holds the possession of property in a Trust arrangement. Trustees are responsible to act in the best interest of the Trust’s beneficiaries.

Trustor

A person or institution that conveys ownership of a property or creates a trust; a.k.a. creator/grantor/settlor.

Unauthorized Practice of Law (UPL)

Criminal laws that protect the public against legal services being provided by unlicensed persons.

Will

Public document subject to probate which distributes property you own at your death that is not in your Trust and assigns custody of minor children.