Common Estate Terms & Definitions
1. Will – A legal document that outlines how a person’s assets and property should be distributed after their death.
2. Executor – The person named in a will who is responsible for managing the estate, paying debts, and distributing assets according to the will.
3. Probate – The legal process of validating a will and overseeing the distribution of a deceased person’s estate.
4. Trust – A legal arrangement in which a trustee holds and manages assets on behalf of beneficiaries.
5. Trustee – The person or institution responsible for managing a trust and distributing assets according to its terms.
6. Beneficiary – A person or entity who receives assets or benefits from a will, trust, or insurance policy.
7. Revocable Trust – A trust that can be altered or revoked by the person who created it during their lifetime.
8. Irrevocable Trust – A trust that cannot be changed or revoked once it is established, often used for tax and asset protection purposes.
9. Power of Attorney (POA) – A legal document that grants someone the authority to act on another person’s behalf in financial or legal matters.
10. Durable Power of Attorney – A type of power of attorney that remains in effect even if the person granting it becomes incapacitated.
11. Medical Power of Attorney – A legal document that designates someone to make healthcare decisions on another person’s behalf if they are unable to do so.
12. Advance Directive (Living Will) – A document that outlines a person’s wishes for medical treatment if they become unable to communicate their decisions.
13. Guardianship – A legal arrangement in which a person is appointed to care for a minor or an incapacitated adult.
14. Conservatorship – A legal process where a court appoints someone to manage the financial and personal affairs of an incapacitated individual.
15. Estate Taxes – Taxes imposed on the transfer of a deceased person's assets before distribution to heirs.
16. Inheritance Taxes – Taxes that beneficiaries may have to pay on the assets they receive from an estate.
17. Letter of Intent – A non-binding document that provides instructions or guidance for an executor or trustee on how to handle certain aspects of an estate.
18. Joint Tenancy with Right of Survivorship (JTWROS) – A form of property ownership in which two or more people own an asset together, and when one owner dies, their share automatically transfers to the surviving owner(s).
19. Tenancy in Common – A form of property ownership where two or more people own a share of an asset, and each owner’s share passes to their heirs rather than the other owners upon death.
20. Payable on Death (POD) / Transfer on Death (TOD) – A designation that allows an account or asset to be transferred directly to a named beneficiary without going through probate.