Estate Planning Terms Defined: So that's what that means!!

February 26, 2016

To a lot of folks, legal terms are just like a mysterious foreign language. See the basics below and at least some of the mystery is solved. When you read a legal document and you come across a term which defies your understanding, ask your lawyer. Or get a head start and try these on for size. Dig in. You will not be tested on these.

Assets—property of all kinds; what you own.

Beneficiary--one who benefits under a will.

Heir--one who benefits from an estate if there is no will.

Estate--total assets in real property (land) and personal property (physical items).

Gross Estate--total assets taxed by the federal estate tax, includes all assets in which you have any element of control.

Probate—legal process of administering someone’s estate after death.

Probate Court –court that oversees the management of someone's estate.

Probate Estate--total assets subject to the probate court’s authority, usually smaller than the gross estate.

Will--legal document in which a person sets out his desired gifts; effective only on death and can be changed during his life.

Trust--a legal entity created by someone (grantor) who gives something (corpus) to someone (trustee) to take care of for someone (beneficiary). One person can serve in multiple roles; a great option for divorces, second marriages, people with special needs, minors, addictions, and large sums of money.

Power of Attorney--a written document authorizing someone to stand in your shoes to handle your business; can save a great deal of time, effort, and money if you become incompetent; lasts until revoked or until the death of the person granting the authority.

Living Will--a written document regarding the withholding or withdrawing of life support in the event of an incurable or irreversible condition that will cause death relatively soon and when that person can no longer express himself.  Terri Schiavo did not have one; Jacqueline Kennedy Onassis and Richard Nixon did.

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