Definitions of Estate Planning Terms
We know that legal terms can be confusing. In plain English, here are definitions of some commonly used estate planning terms:
ATTORNEY IN FACT
This is the name given to a person who you appoint to act for you in a power of attorney. This person is also sometimes called your AGENT.
BENEFICIARY
The person or persons for whose benefit a trust is created.
CORPUS
The property placed within a trust.
DEVISEE
A person who receives a gift of real property from you by way of your will or trust or other distribution of your estate.
ESTATE
Everything that you own.
ESTATE TAX
A tax, assessed by both the federal and state taxing authorities, against the value of the transfer of things in which you own an interest at the time of your death to your beneficiaries. This is different from an income tax.
GUARDIAN
A person appointed by a Court to take care of and manage the property and person of an individual.
HEIRS
The individuals and organizations named in your trust, will or determined by law who receive your ESTATE.
GRANTOR
In the estate planning context, the person who creates a trust or makes a gift. In the real estate context, the person who conveys real property.
GRANTEE
The person who receives a conveyance of real property.
IRREVOCABLE
In the context of a trust, it means that the trust cannot be changed, modified or terminated.
LEGATEE
A person who receives a gift of personal property from your ESTATE by virtue of your will or trust or other distribution of your ESTATE.
MEDICAID
A state-administered program of health care coverage for people with low income and assets. It is subsidized by the federal government.
MEDICARE
A form of public health care insurance that is available to people over 65 or to people who receive Social Security benefits because they are disabled. Medicare Part A helps pay for medically necessary inpatient care in a hospital, skilled nursing facility or psychiatric hospital, and for hospice and home health care. Medicare Part B helps pay for medically necessary doctor services and many other medical services and supplies.
MEMORANDUM OF TRUST
A document, usually recorded, which shows that a trust has been created, names the TRUSTEES and successor trustees, and states their powers, and lists the property subject to the trust. It is sometimes called a Certificate of Trust.
PERSONAL REPRESENTATIVE
The person appointed by the Court, either as a result of nomination by your will or by virtue of law, to administer your ESTATE after your death. This person is also sometimes called your EXECUTOR or ADMINISTRATOR or GUARDIAN or TRUSTEE.
PER STIRPES
A method of dividing property from your ESTATE. It means that should one of your HEIRS die before you, the heirs of that deceased heir take the share intended for the deceased heir. As an example, if you left one-half of your ESTATE to your son and your son died before you leaving two children, then your two grandchildren would divide his share, each receiving one-fourth of your ESTATE. It is a Latin term which literally means "by roots."
REVOCABLE
In the context of a trust, it means the trust can be changed, modified or amended.
RULE AGAINST PERPETUITIES
An ancient rule of law, still valid today, which states that no interest in property is good unless it vests, if at all, not later than 21 years, plus period of gestation, after some life or lives in being at the time of the creation of the interest. In simple terms, if you create a trust today, it must terminate no later than the date of death of all of your now living heirs, plus 21 years.
TESTATOR
A person who signs a LAST WILL AND TESTAMENT.
TESTATRIX
A female TESTATOR.
TRUST ESTATE
All of the property placed in a trust. It is also sometimes called the CORPUS or the PRINCIPAL of the trust.
TRUSTEE
The person or persons who control and manage a TRUST.
TRUSTOR
Also called a GRANTOR. This is the person or persons who create a trust.
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