Ancillary Probate
A type of probate that occurs when the decedent owns property in a state other than the state of their legal residence.
Annual Exclusion
The amount of money that one person may give to another person without incurring a gift tax or affecting the unified credit.
Beneficiary
A person or entity that receives assets from a will or trust.
Bypass Trust
A legal arrangement that allows a couple to greatly reduce or avoid estate taxes when passing assets to heirs.
Capital Gains Tax
A tax on the profit made from selling something (an investment or real estate) that was purchased at a lower price.
Charitable Bequest
A gift of money or assets to a charity as part of a will or estate plan.
Charitable Remainder Trust
A type of trust that provides for a specified distribution, at least annually, to at least two beneficiaries.
Codicil
A legal document that changes specific provisions of a will but leaves all the other provisions the same.
Community Property
Property and assets acquired during marriage, which are considered equally owned by both spouses.
Conservatorship
A legal concept where a court appoints a person to manage an incapacitated or minor person's financial and personal affairs.
Contingent Beneficiary
A person who will receive the benefits if the primary beneficiary is unable to do so.
Crummey Rights
The right of a beneficiary to withdraw a gift to a trust for a limited period of time.
Decedent
The person who has died, typically in the context of discussing their estate.
Deed
A legal document that signifies an interest or right in real property.
Disclaimer
A refusal to accept a gift or an inheritance to allow it to pass to the next beneficiary named in the will or trust.
Durable Power of Attorney
A Power of Attorney that remains effective even if the principal becomes incapacitated.
Dynasty Trust
Also known as a 'generation-skipping trust,' this allows for the preservation of wealth for several generations.
Elective Share
The portion of a deceased's estate that a spouse is entitled to claim under state law.
Escheat
The reversion of property to the state in the event the owner dies without leaving a will and has no legal heirs.
Estate Freeze
A strategy used to lock in the current value of the estate for tax purposes, while attributing future growth to others.
Estate Liquidity
The ability of the estate to cover taxes and other costs without selling illiquid assets.
Estate Planning
The preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death.
Estate Recovery
The process by which states recoup, from the estates of deceased Medicaid recipients, the cost of services they used in their lifetime.
Estate Tax
A tax on the transfer of the estate of a deceased person.
Estate
All of an individual's assets, including property, investments, and other possessions.
Executor
The person appointed to administer the estate of a deceased person.
Family Limited Partnership (FLP)
A type of arrangement designed to consolidate a family's wealth management and provide for succession of ownership.
Family Trust
A trust set up to benefit members of the family, which specifies how assets are to be divided among family members.
Fiduciary Duty
A legal obligation of one party to act in the best interest of another.
Fiduciary
A person or organization that has the power and obligation to act for another under circumstances which require total trust, good faith and honesty.
Generation-Skipping Transfer Tax
A tax on both outright gifts and transfers in trust to or for the benefit of individuals two or more generations younger than the donor.
Generation-Skipping Trust
A type of legally binding trust agreement in which the contributed assets are passed down to the grantor's grandchildren, not the grantor's children.
Gift in Contemplation of Death
A gift given when the donor, expecting imminent death, gives it with the intention that it shall take effect only on his death.
Gift Tax
A tax on the transfer of property or money to another person during the giver's lifetime.
Grantor
The individual who transfers ownership of assets into a trust.
GRAT (Grantor Retained Annuity Trust)
An irrevocable trust where the grantor retains the right to an annual income while transferring assets to beneficiaries tax-free.
Gross Estate
The total value of an individual's property and assets before liabilities and debts are deducted.
Guardianship
The legal responsibility for the care of someone who is unable to care for themselves, often a minor or a disabled adult.
Healthcare Proxy
A document that appoints someone to make medical decisions if the person becomes unable to do so.
Heir
A person who is legally entitled to inherit some or all of the estate of another person who has died, especially when there is no will.
Holographic Will
A will that has been entirely handwritten and signed by the testator.
In Terrorem Clause
Also known as a "no-contest" clause, it is a provision in a will that discourages beneficiaries from contesting the will or any of its provisions.
Inheritance
Property or money received from someone after their death.
Intangible Property
Non-physical assets like stocks, bonds, patents, copyrights, etc.
Intestate Succession
The order of who inherits the property if the deceased did not have a will.
Intestate
Dying without a will.
Irrevocable Trust
A trust that cannot be changed or terminated without the permission of the beneficiary.
Joint Tenancy
A type of ownership where two or more people hold an equal share of property. Upon one owner's death, their share automatically passes to the surviving owner(s).
Legacy
A gift of property or money left to someone in a will.
Letter of Instruction
A document left by someone who has passed away, which provides instructions for the disposition of personal property.
Life Estate
A type of property ownership that only lasts for the lifetime of the owner, after which it reverts back to the original owner or another designated party.
Life Insurance Trust
A type of trust that owns a life insurance policy, removing it from the insured's estate to avoid estate taxes.
Life Insurance
A contract with an insurance company that, for premium payments, provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured's death.
Life Interest
A right to enjoy the income or benefits of property during one's life but not the right to dispose of the property.
Limited Power of Appointment
Allows the holder to appoint trust property among a specified class of individuals.
Living Trust
A legal document created by an individual, during their lifetime, that designates a trustee to manage their assets.
Living Will
A legal document that specifies what actions should be taken for a person's health if they are no longer able to make decisions for themselves due to illness or incapacity.
Marital Deduction
A deduction that allows for the unlimited transfer of any or all property from one spouse to the other generally free of estate and gift tax.
Non-probate Assets
Assets that pass to heirs by contract, such as life insurance proceeds and retirement accounts.
Per Capita
A method for distributing an estate where each person in the same generation receives an equal share.
Per Stirpes
A method for distributing an estate where each branch of the family receives an equal share.
Pour-Over Will
A legal document that states that any assets not included in a trust should be placed into the trust after one's death.
Power of Attorney
A legal document giving one person the authority to act on another's behalf in legal matters.
Principal
The assets that comprise the trust, including real estate, bank accounts, stock, etc.
Probate Estate
The portion of a deceased's estate that goes through the probate process.
Probate
The legal process of verifying a will and distributing assets after someone dies.
QDOT (Qualified Domestic Trust)
A trust that allows a non-citizen spouse to take the marital deduction for estate-tax purposes.
QTIP Trust (Qualified Terminal Interest Property Trust)
A type of trust designed to allow a surviving spouse to postpone estate taxes.
Qualified Personal Residence Trust (QPRT)
An irrevocable trust that allows homeowners to potentially reduce estate taxes by removing the value of their home from the taxable estate.
Real Property
Land and anything permanently affixed to it, including buildings, trees, minerals, etc.
Remainderman
The person who inherits or is entitled to inherit property upon the termination of the estate of the former owner.
Residuary Estate
The part of the estate that is left after the payment of debts, funeral expenses, and costs of probate.
Residue
The part of an estate that remains after all specific and monetary bequests have been made and all debts, taxes, and expenses have been paid.
Revocable Trust
A trust that can be changed or terminated by the creator during their lifetime.
Rule Against Perpetuities
A legal principle that requires that a trust must vest within a certain period of time, usually measured by "a life in being plus 21 years".
Self-Proving Will
A will that has been witnessed and verified in the presence of a notary so it will be accepted by the probate court without contacting the witnesses.
Settlor
Another term for the person who creates a trust, also known as a grantor.
Silent Trust
A trust in which beneficiaries are unaware of their beneficiary status or the terms of the trust.
Special Needs Trust
A type of trust that allows a disabled person to receive inheritances, lawsuit settlements, or other funds without losing their eligibility for certain government programs.
Spendthrift Trust
A trust set up for the benefit of someone who the grantor believes would be incapable of managing their own financial affairs.
Springing Power of Attorney
A POA that becomes effective at a future time or upon a specific event, such as the principal's incapacity.
Step-Up in Basis
The readjustment of the value of an appreciated asset for tax purposes upon inheritance.
Successor Trustee
The individual or institution that takes over management of a trust if the initial trustee can no longer serve.
Tangible Personal Property
Physical assets like real estate, vehicles, furniture, etc.
Tenancy by the Entirety
A form of property ownership for married couples where each spouse has equal and undivided interest in the property.
Tenancy in Common
A type of property ownership where multiple individuals own a property together, but with different shares and rights.
Testamentary Capacity
The legal and mental ability to make or alter a valid will.
Testamentary Letter
A letter by the executor of a will to the court of probate asking for the implementation of the will.
Testamentary Trust
A trust set up in a will that only takes effect after the death of the person who created the will.
Testator
The individual who creates a will.
Totten Trust
A type of trust, also known as a "payable-on-death" account, that is payable to a specific beneficiary upon the death of the trust owner.
Trust Company
A legal entity that acts as fiduciary, agent or trustee on behalf of a person or business for the purpose of administration, management and the eventual transfer of assets to a beneficial party.
Trust Protector
A person appointed to watch over a trust that will operate for many years to ensure that it is not adversely affected by any change in law or circumstances.
Trust
A legal arrangement where one person (the trustee) holds property for the benefit of others (the beneficiaries).
Trustee
The individual or institution responsible for managing the assets inside a trust.
Unified Credit
A tax credit given to every estate regardless of its size, which can be used towards gift tax or estate tax.
Uniform Probate Code (UPC)
A set of probate laws which aim to simplify the probate process. Only adopted in full by 17 states.
Unitrust
A trust where the trustee must pay the beneficiary a fixed percentage of the trust's net market value annually.
Will
A legal document outlining how an individual's assets should be distributed after their death.