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Understanding Estate Planning legal terms

While you are in the process of planning your estate, you will hear certain terms spoken by your estate planning lawyer or see it referenced in legal documentation. When you work with a lawyer you can feel comfortable knowing that he or she will answer your questions and address your concerns about various legal services. As legal professionals, we understand that the average layperson is unfamiliar with most legal terms and concepts. Our role as your legal representative is to bridge the gap between you and the legal world. We will guide you through the process of planning your estate and provide you with the information you need to make informed choices. Below are some of the terms commonly used when it comes to estate planning:

Administration

This is the process of distributing an estate’s assets after the grantor (the deceased owner of the estate) dies.

Administrator

The court designates this person to represent an estate during the probate process when the deceased left no will, or the will does not specify an administrator.

Alternate Beneficiary

This is the person or organization who the deceased named to inherit one or more assets if the first choice for beneficiary died before the deceased passed away.

Assets

These are the items that you own and that have recognizable value to others, in contrast to items that are only of sentimental value to you and would not sell for much if any money. Examples of assets are a house, land, vehicle, jewelry, gold, silver, and collectable paintings.

Beneficiaries

Those who inherit the trust assets from a living trust after the trust grantor dies.

Children’s Trust

If you have a beneficiary who is a minor, your designated trustee will transfer the child’s inheritance to this trust which is a subset of the main trust. The trustee will be responsible for managing the child’s inheritance until they reach the age you wish for them to receive it.

Codicil

A change in someone’s will.

Contest

When a person challenges a will or trust based on legally recognized criteria.

Estate Taxes

State or federal taxes, also known as inheritance or death taxes, placed on the value of an estate’s assets after the owner (grantor) has passed away.

Executor

The person or institution who is named in a will to carry out its instructions. A female executor is sometimes referred to as the executrix.

Grantor

The individual who created the trust and who owns the assets within it. They are sometimes referred to as the settlor, creator, trustmaker, donor, or trustor.

Irrevocable Trust

This is a type of trust that cannot be changed or terminated after it is created.

Intestate

Not having a will. If someone “dies intestate” it means they died without leaving a will behind that provides instructions to carry out their final wishes.

Living Trust

An entity into which you transfer the ownership of your assets, with instructions on what to do with them while you are alive and how they should be distributed after your death. It allows your heirs to avoid the probate process.

 

If you have questions or concerns about your estate plan, or if you would like to create one, we encourage you to contact our office. An estate planning lawyer will be happy to provide you with a free introductory consultation to let you know more about our legal services and how we can help you.

Thanks to our friends and contributors from Cohen & Cohen, P.C., for their insight into the legal terminology of estate planning.