Estate Planning Terms
Serving Clients in Bella Vista, Bentonville, Rogers, Springdale, Fayetteville, and all of Northwest Arkansas
Administration:
Process like probate, only no Last Will & Testament.
Administrator:
Name for the personal representative during administrator.
Annual Exclusion:
The amount you can give away in gifts every year, to non-charities, and not pay gift tax.
Applicable Exclusion Amount:
The total amount exempted from Federal gift and estate taxes.
Assets:
Basically, everything you own. Your home, cars, jewelry, money, …
Attorney-in-Fact:
A person authorized to act for another person. Not necessarily licensed to practice law. Must sign a power of attorney document.
Basis:
What you paid for an asset
Beneficiary:
Person receiving the benefit of a trust, life insurance, or other account.
Certificate of Trust:
Shortened version of your Trust that verifies the trust’s existence and outlines the basic powers of the trustee.
Codicil:
An amendment or change to a Last Will and Testament.
Community Property:
In certain states, martial property belongs to the marriage, no matter how titled.
Conservator:
A guardian or protector
Creditor:
Somebody who you owe money to.
Debtor:
Somebody who owes money
Decedent:
A person who has passed away.
Descendants:
children, grandchildren, etc.
Disclaimer:
Not claiming a gift left in a will
Durable Power of Attorney:
A Power of Attorney that continues to be in force even if you are incapable of making your own decisions.
Estate Planning:
The process of protecting yourself during your lifetime, and deciding who gets what and how much.
Estate Tax:
Tax on inheritance
Executor:
Usually a person named in a Last Will and Testament to handle the probate process.
Final Disposition:
A document that tells others how and where you want buried. Can range from very simple to the entire ceremony.
Financial Predator:
person who watches the probate records and preys on the recipients of large inheritances.
Gift Tax:
Tax on gifts over the annual exclusion.
Grantor:
Person granting. Person putting stuff into a trust.
Grantor Trust:
Disregarded for income tax purposes. The grantor is taxed directly at individual rates. The trust does not file a tax return.
Gross Estate:
The value of everything you own, not subtracting out debt.
Guardian:
Person appointed by a Judge who has the legal authority to manage the finances and personal interests of another, the ward.
Healthcare Power of Attorney:
Power of attorney for your healthcare decisions
Heir:
One entitled by law to receive part of your estate.
Holographic Will:
Handwritten Will
Incapacitated:
No longer capable of making rational, informed decisions.
Income:
Money, earned or unearned, from all sources.
Intestate:
Dying without a Last Will and Testament.
Irrevocable Trust:
A trust that is difficult to change or revoke. Occasionally a court may order changes.
Joint Tenancy With Right of Survivorship:
Where multiple own a piece of property and if one deceases, the others automatically get ownership without probate or courts.
Last Will and Testament:
See “Will”
Life Estate:
Ownership of property for your lifetime only. The remainder is owned by another person. The ownership ends automatically at death.
Living Trust:
A trust established while you are alive.
Living Will:
Advance Directive. Your medical instructions.
Payable on Death:
An account with a beneficiary named.
Personal Representative:
Person managing probate or administration of an estate.
Per Stirpes:
Method of inheritance.
Pour Over Will:
A Last Will and Testament that “pours” everything into a trust.
Power of Attorney:
A document giving another authority to act for you financially and legally.
Probate:
Admitting the Last Will and Testament to court, following the instructions in the Will, and distributing the property.
Property:
Thing belonging to somebody. A bundle or rights granted by the government.
Residue:
Property not explicitly given away in a trust or will.
Revocable Living Trust:
A revocable trust created during your lifetime.
Settlor:
Person “Settling” a trust. The person putting stuff into the trust.
Special Needs Trust:
A trust created especially for a person receiving public benefits or who has special needs.
Spendthrift:
A clause in a trust to protect the assets in the trust from creditors.
Tangible Personal Property:
Things you can touch and move. Does not include cash or money.
Tenancy by the Entirety:
Like joint tenancy with right of survivorship, only for married couples.
Tenancy in Common:
Ownership by more than one person, without any ownership changes at death.
Testamentary:
Created in a Last Will and Testament.
Testamentary Trust:
A trust created by a Last Will and Testament.
Testator:
Person creating a Last Will and Testament.
Trust:
A trust is a three-party agreement between the person putting stuff into trust (the grantor), the person managing the stuff (the trustee), and the person getting the benefit of the stuff (the beneficiary).
Trustee:
Person who is responsible for managing the assets in a trust for the beneficiaries.
Will:
A Will is just a set of instructions left for the court to follow. A Will is a written document signed in a manner prescribed by law which disposes of property upon death. It is better than no plan at all, but requires Probate.
