A

Administration: Designing a strategy and implementing that strategy through the execution of wills, trust agreements, or related documents to determine the administration of a person’s assets upon that individual’s death or incapacity. Tax liability and cash needs are integral considerations in this process.

Administrator (see also, “Executor”): A person named in a will and appointed by the court to carry out the terms of the will and to administer the decedent’s estate. Executrix is sometimes used to distinguish female representatives, but the term has fallen out of practice along with other similar Latin root terms, e.g., director.

B

Beneficiary (see also, “Heir”): A person who will receive the benefit of an estate asset or trust. The benefit is granted through a will bequest or trust designation, etc.

C

Codicil: A formally executed document that amends the terms of a previously executed will in order to avoid necessitating a complete rewrite of that will

Community Property (see also, “Separate Property”): A form of property ownership recognized in Texas and a few other states (influenced by Spanish and French legal traditions) wherein any property that is acquired during a marriage is presumed to be jointly owned by both spouses.

Conservator: A person or corporate fiduciary appointed by a court to care for and manage the assets of an incapacitated individual.

D

Descendant: A person’s children, grandchildren, and more remote individuals (excluding ancestors and siblings) related either by blood or legal adoption.

Durable Power of Attorney: An authorization for a person to act in another individual’s place as their agent within the scope of authority specified in the authorizing document where the authorization granted does not terminate upon the incapacity of the person granting that authority.

E

Estate Planning: Designing a strategy and implementing that strategy through the execution of wills, trust agreements, or related documents to determine the administration of a person’s assets upon that individual’s death or incapacity. Tax liability and cash needs are integral considerations in this process.

Executor (or “Personal Representative”): A person named in a will and appointed by the court to carry out the terms of the will and to administer the decedent’s estate. Executrix is sometimes used to distinguish female representatives, but the term has fallen out of practice along with other similar Latin root terms, e.g., director.

F

Fiduciary: A person or entity designated to manage assets for beneficiaries who is required to act with the highest loyalty to the best interests of those beneficiaries.

G

Grantor: A person who creates a trust through the granting or contribution of an asset, i.e., real property.

Guardian: A person or institution appointed by a court to act for a minor or incapacitated person. Guardians can be guardians of the person, of the estate, or both.

H

Heir (see also, “Beneficiary”): A person entitled to a distribution of an asset belonging to the estate of the deceased according to state law rather than a will.

I

Irrevocable Trust: A trust that cannot be terminated, revoked, or otherwise modified by the grantor.

J

Joint Tenancy: An ownership arrangement between two or more persons or institutions. Arrangement can include the right of any one party to automatically inherit the ownership share of other tenants upon their death, i.e., right of survivorship.

L

Life Estate: Where a person 1) grants an ownership interest in a property to another individual or institution but 2) retains all of the rights of a tenant in that property (i.e., a “life estate”) until the time of the person’s death. In other words, the individual’s ownership interest is not fully vested until the grantor’s death.

Living Trust: A trust created by a person during their lifetime which can be either revocable or irrevocable.

M

Medical (or Health) Power of Attorney: An appointment of an agent to make health care decisions for the grantor when the grantor is incapacitated.

N

No-Contest Clause: A provision in a will (or a trust agreement) that anyone who sues to receive more from the decedent (or grantor) than had been designated would then lose any inheritance rights they had under the relevant will (or trust agreement).

O

Operation of Law: Legal term of art that refers to the distribution of a decedent’s estate assets in accordance with the state laws rather than the terms of your will.

P

Personal Representative (see also “Administrator” and “Executor”): An executor or administrator of a decedent’s estate.

Per Stirpes: Latin for “per branch.” It is a legal term of art for describing the distribution of assets proportionally through each generation of descendants. If a given descendant heir died before the decedent, the inheritance would then go proportionately to that descendant’s children and so on until a living heir is found.

Pour Over Will: A will used to pass title to property not already transferred to a revocable trust during the grantor’s lifetime.

Power of Appointment: Power that is given to a person to determine who will be the owner or recipient (to hold in trust, etc.) of specified assets, e.g., a decedent may have given power of appointment to their son to pass title to their property to the son’s children.

Principal: Assets acquired by a trust to generate income and to be used for the benefit of the trust’s beneficiaries.

Probate: Process of proving the validity of a will and distributing property under the terms o ftheat will or in accodance with a state’s intestacy law, if a will is not found.

R

Residue: Property that is left over in the decedent’s estate after payment of the estate’s debts, taxes, and expenses and after all specified gifts of property and cash directed in the will have been distributed.

Revocable Trust: A trust created during the grantor’s lifetime over which the grantor reserves the right to terminate, recoke, modify, or amend.

S

Self-dealing: Any transaction where the person executing the transaction on behalf of a trust or other entity benefits directly from that transaction, e.g., a trustee buys an asset from the trust (including where the trustee pays fair market value).

Settlor (see also, “trustor” or “grantor”): Person or entity who establishes (or settles) a trust.

Special Needs Trust: A trust established for the benefit of an individual with disabilities that is designed to allow that individual to be eligible for public benefits (i.e., Social Security Supplemental Security Income (SSI)) by limiting the use of trust assets for purposes other than the beneficiary’s basic care.

Spendthrift Provision: A provision restricting both voluntary and involuntary transfers of a beneficiary’s interest as a way of protecting the assets from the beneficiary’s creditors.

T

Testamentary Trust: A trust established in a person’s will to come into operation after the will has been probated.

Testator: Person who legally authors and executes a will.

Transfer on Death Designation (TODD): The designation of a beneficiary that automatically passes title to an asset at death over to either a named person or revocable trust without needing to go through probate.

Trust: Arrangement 1) where assets are legally owned and managed by a trustee for the benefit of another and 2) where the beneficiary has equitable ownership of that asset.

Trustee: Person or institution designated to hold and administer the trust property.

U

Uniform Transfers to Minors Act (UTMA): Enacted by some states, UTMA allows for the designation of custodian that receives and manages property for the benefit of a minor.

W

Will: A writing that specifies beneficiaries who the testator intends to receive their assets and can also name an administrator.