Trust and Probate Terminology

Trust and Probate Terminology

Administrator: A person, or financial institution, appointed by the court to oversee an estate where there is no Will. The Administrator is also commonly referred to as the Personal Representative.

Administrator With Will Annexed: A person, or financial institution, appointed when a Will does not name an Executor or the named Executor cannot serve.

Beneficiary: A person who is designated to receive property as a result of a legal arrangement or instrument

Charitable Gift Planning: Developing planned giving strategies to benefit both the donor and recipient often reducing income taxes, estate taxes, or capital gains taxes.

Codicil: A document which legally changes a will through supplement or amendment.

Decedent: A person who has passed away.

Educational Trusts: A trust created for the purpose of providing the beneficiary funds to be used for educational expenses.

Estate: A decedent’s total assets, both real and personal, which are managed by the Personal Representative or Executor.

Estate Planning: The preparation for the distribution and management of a person’s estate at death through the use of Wills, Trusts, insurance policies, and other arrangements. Careful, effective estate planning protects your family from unnecessary financial and emotional distress and ensures your assets are protected and passed on according to your wishes.

Executor: A person named in a Will to carry out the directions as set forth in the Will. The Executor is also commonly referred to as the Personal Representative.

Family Business Succession Planning: Planning for ownership succession and management succession of a family business or closely held corporation. For family owned businesses, planning how to leave your business to the next generation is critical. Usually, the process occurs only once in a lifetime and without professional assistance in planning the transfer, the succession process can destroy the business and family relationships.

Guardianship: A legal arrangement in which a person (the guardian) has the legal authority and duty to care for another’s (the ward) person or property because of the other’s incapacity.

Heir: A person who inherits through the laws of intestacy when there is no Will.

Intestate: One who has died without a valid will.

Irrevocable Life Insurance Trusts: irrevocable, non-amendable trust which is both the owner and beneficiary of one or more life insurance policies. The Trustee invests the insurance proceeds upon the death if the insured.

Letters of Administration: The court document issued to a person authorizing them to act as the Administrator of an estate (no will).

Letters Testamentary: The court document issued to a person authorizing them to act as Executor of an estate (named in will)

Personal Representative: A person, or financial institution, appointed to oversee an estate whether as executor, administrator or administrator with will annexed.

Probate: Typically known as the court process that determines the validity of a will but also includes any personal representative’s actions in handling an estate, whether with or without a Will.

Revocable Living Trusts: A trust that can be terminated by the settlor once it is created.

Spendthrift Trusts: a trust that prohibits the beneficiary’s interest from being assigned and also prevents a creditor from attaching an interest.

Tax Planning: The development of legal strategies to avoid or minimize federal estate taxes for large estates. Many legal alternatives exist to minimize or avoid federal estate taxes; the larger your estate, the more imperative it is to obtain the legal expertise necessary to take full advantage of those options.

Testamentary Trust: A trust that is created by a will and takes effect when the settlor (testator) dies.

Testate: Having left a will at death. A person who dies with a valid will or trust dies testate and the estate is distributed according to the will or trust.

Trust: A legal arrangement in which a property interest is held by one person (the trustee) at the request of another (the settlor) for the benefit of a third party (the beneficiary).

Trust Administration: The act of managing and distributing trust assets.

Trust Estate: All of the property held in a Trust.

Trustee: One who holds property for the benefit of another and owes a fiduciary duty to that beneficiary.

Will: A document that requires probate which directs the disposition of a person’s property after death.

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