Please note that the following definitions are not intended to be legal advice.
ADMINISTRATOR - a person appointed by the court to manage the assets of an intestate decedent
ANNUAL EXCLUSION - the amount an individual can give to one or more other individuals as a gift each year without being subject to the gift tax
ANNUITY - an obligation to pay a defined sum of money periodically to a stated recipient for a definite duration or for the life of the recipient
ASSET - anything of a monetary value such as personal property or real estate than can be readily converted to cash. Assets may also include intangibles like trademarks, rights to market a product or business good will
BENEFICIARY - a person or entity who receives a profit, advantage or benefit, such as someone named to receive something from a will or a person named to receive the proceeds from an insurance policy
CODICIL - a legal document that changes or supplements an existing will, but usually for only minor changes to an original will
CONSERVATOR - a person appointed by the court and entrusted to preserve the assets of a person requiring protection. Conservators generally enjoy latitudes in managing property similar to those of a trustee.
CORPUS - the property that makes up the principal of a trust, as opposed to the interest or income generated by the trust
DEBT OBLIGATIONS - this is money a person owes, for example mortgages, auto loans, home equity loans or credit card debt
DECEDENT - a person who has died
DEVISE - the giving property by a will
DEVISEE - a person designated by a will to receive property
DISABILITY DETERMINATION - a term used by the Social Security Administration; when a person applies for benefits at a SSA field office, personnel there review the application and send the paperwork to the Disability Determination Center. There it is decided whether or not an individual meets the definition of being disabled.
DISCRETIONARY INCOME - the portion of a person’s income that is available to spend after paying the essential needs of shelter, food and clothing
DISINHERITANCE - the act of denying a would-be heir property from an estate to which the heir would otherwise be entitled
DISTRIBUTION - the dissemination of personal property of an intestate decedent. Generally distribution occurs after the payment of claims against the estate.
DIVERSIFICATION - the act of investing in a broad array of ventures to reduce the risk of losses in a single segment of the economy
DOMICILE - the place at which a person has been physically present and that the person considers home. A person’s permanent home, to which that person intends to return and remain even if currently residing elsewhere.
DONEE - a person who receives a gift
DONOR - a person to makes a gift
DURABLE POWER OF ATTORNEY (POA) - this legal document allows one person (principal) to authorize another person (attorney of other appointed ‘agent’) to act on his or her behalf with regard in the event the principal is unable to manage their financial assets
DURABLE POWER OF ATTORNEY FOR HEALTH CARE - this legal document allows a designated person to make decisions on behalf of the principal with regard to health care; may include the right to access medical records or speak to heath care providers, the right to move a patient or authorize treatment, the right to get a second opinion or remove a physician, or the right to have the principal discharged against medical advise (AMA)
ESCHEATS - the transfer of property to the state where the decedent failed to create a will and leaves no legal heirs
ESTATE - all the possessions of one who has died and are subject to probate administration supervised by the court and distributed to heirs and beneficiaries. An estate may also mean all the possessions which a guardian manages for the ward whose protection and administration of affairs they are responsible for. It may also mean the assest a conservator manages for a person with physical or mental lack of competence.
ESTATE TAX - federal or state taxes imposed on the assets left to heirs or other beneficiaries
ESTATE TRUST - such trusts are created by one spouse for the benefit of a surviving spouse
EXECUTOR/EXECUTRIX - an individual or other entity appointed in a will with the legal responsibility to carry out provisions stated in a last will and testament, according to federal and state laws. The executor is male and an executrix is female. The executor often is assisted by an attorney to settle an estate and complete the probate process.
FIDUCIARY - a person who must exercise a high standard of care in managing another’s property. In estate planning, the term includes trustees, personal representatives, guardians, and conservators.
FEDERAL GROSS ESTATE - the total value of all property as defined by the Internal Revenue Code on the date of the decedent’s death. The gross estate includes tangible, intangible, contingent, jointly held property as well as property the decedent had control over at the time of death.
GRANTOR - the person who establishes a trust; this term is also used to describe the conveyor of real property
GUARDIAN (CONSERVATOR) - this is a person appointed by the court to make decisions on behalf on an individual (the ward) who is unable for whatever reason to make decisions on behalf of themselves.
HEALTH CARE PROXY - a document that allows a person to assign another person to make medical decisions for them in the event they are unable to do so.
HEIRS - under the law of intestacy, those individuals who are entitled to the property of the decedent
INHERIT - to receive property from a decedent through the laws of intestacy succession or by a will
INTER VIVOS TRUST - also known as a living trust, this represents a trust that is established and takes effect during the settlor’s lifetime
INTESTACY - if a person dies without a valid will, this creates a situation called intestacy; he or she is said to “have died intestate” so that their assets will be distributed under the probate statutes of the state where the lived prior to their death.
IRREVOCABLE TRUST - one that cannot be changed or terminated by the person who created it without the approval of the beneficiary of the trust
LIFE ESTATE - an interest in property granting a person the right to use the property during that person’s lifetime
LINEAL DESCENDENT - a person who is in a direct line of descent by blood from a descendent; in Massachusetts adopted children are included.
LIVING TRUST - a living trust form is used to prepare your estate while you are still alive and place your property/assets within the trust for the purposes of estate planning and asset protection. The trust then owns and manages the property/assets for the benefit of named beneficiaries.
MARITAL DEDUCTION - allows a person to avoid some of the federal taxes on transfers from a spouse
PAY ON DEATH - a designation that the transfer of property to a beneficiary after the party’s death that avoids probate
POWER OF ATTORNEY - generally a written document granting a person authority to act as an agent or attorney-in-fact for the person who grants the authority
PROBATE - the legal process of administering the estate of a deceased person by resolving all claims/debts and distributing assets and property under a valid will.
REAL PROPERTY - real estate including lands and buildings
REMAINDERMAN - a person who holds or is entitled to a future interest, e.g. an interest in a life estate after the tenant dies
REVOCABLE TRUST - a trust in which the settlor retains the right to amend, alter, or terminate the trust and receive the corpus of the trust from the trustee
TESTAMENTARY TRUST - a trust established in a will that takes effect upon the settlor’s death
TRUST - a property interest established by the settlor and generally held by a trustee for the benefit of another person, the beneficiary
TRUSTEE - a person who hold legal title to property, holds the property for the benefit of another, and owes a fiduciary duty to the beneficiary
WILL - a testamentary document expressing a person’s wishes with respect to the distribution and disposition of that person’s property after death