Now Booking In-Home Meetings – Get in Touch
Amanda Waltz Law Logo horizontal green
Dictionary of Law Book open to Estate Planning Terms

Glossary of Estate Planning Terms

The world of probate law can feel like entering a maze of unfamiliar estate planning terms and legal jargon. Navigating this terrain shouldn’t be overwhelming. 

At its core, these processes are about safeguarding your legacy, protecting your loved ones, and ensuring your wishes are honored. Yet, understanding the terminology is pretty important to feeling confident in your estate plan. 

I’m Amanda Waltz with Amanda Waltz Law, LLC and my goal with each client is to make them feel heard, informed, and assured when it comes to their estate plan. Never would I want a client to walk away from our meeting confused by all the “legalese”. That’s why I’ve put together this glossary of common estate planning terms to refer to any time. 

So, let’s demystify the legal language, and empower you to navigate these important decisions with confidence and clarity.

In This Post:

Estate Planning Terms:

  • Asset: Any valuable property, item, or resource owned by an individual or entity. Assets can include real estate, financial accounts, investments, personal belongings, intellectual property, and any other possessions or rights with monetary value.
  • Beneficiary: An individual or entity who receives assets or benefits from an estate or trust.
  • Estate Tax: A tax imposed on the transfer of a deceased person’s assets. (There is currently no estate tax in the state of Ohio).
  • Executor: A person or entity appointed in a will to carry out the wishes of the decedent’s last will and testament, managing the estate’s affairs, paying debts, distributing assets to beneficiaries, and handling the probate process.
  • Fiduciary: Someone legally bound to act in the best interests of another party when managing assets or making decisions on their behalf. An executor of an estate is a specific type of fiduciary. 
  • Gifting Limits: The maximum amount you can give to someone without incurring gift tax.
  • Guardianship: The legal responsibility for the care of a minor or incapacitated adult.
  • Grantor: An individual who establishes a trust, transferring assets into the trust and setting its terms and conditions. The grantor initiates the trust and may also be known as the trustor or settlor.
  • Inheritance Tax: A tax on the assets received by heirs. (There is currently no inheritance tax in the state of Ohio).
  • Intestacy: When a person dies without a valid will, and state laws dictate asset distribution.
  • Last Will and Testament: A legal document that outlines an individual’s wishes regarding the distribution of their assets, guardianship of minor children, and other instructions to be carried out after their death. It specifies beneficiaries and an executor responsible for ensuring the wishes outlined in the will are executed as per the deceased person’s intentions.
  • Living Will: A document that outlines a person’s life-sustaining treatment wishes if they become terminally ill or permanently unconscious..
  • Payable on Death (POD): A designation on financial accounts, such as bank accounts or investment accounts, indicating that upon the account holder’s death, the funds in the account will pass directly to the named beneficiary without going through probate.
  • Power of Attorney: A legal document granting someone authority to act on your behalf.
  • Testator: The person who creates and signs a will.
  • Transferable on Death (TOD): A designation used for assets like real estate or securities, allowing the owner to specify a beneficiary who will inherit the asset upon the owner’s death without the need for probate.
  • Trust: A legal arrangement where assets are held by a trustee for the benefit of beneficiaries.
    • Irrevocable Trust: A trust that cannot be easily altered or revoked once established. An individual (the grantor) transfers ownership of assets into the trust and relinquishes the ability to modify, amend, or revoke the trust without the consent of the beneficiaries. Once established, the terms of the trust typically cannot be changed, and the assets are managed by a trustee for the benefit of the beneficiaries according to the trust’s terms.
    • Revocable Living Trust: A legal arrangement that allows the grantor to place assets into a trust during their lifetime. The grantor retains the ability to modify, amend, or revoke the trust and access the assets within it. Upon the grantor’s death, the assets in the trust are distributed according to the terms specified in the trust document, bypassing the probate process for those assets.
  • Trustor: The person who establishes a trust by transferring assets into it and setting its terms and conditions. The trustor initiates the trust for the benefit of beneficiaries and may also be referred to as the grantor or settlor.

Estate Administration Terms:

  • Asset misappropriation: the unauthorized or wrongful use or disposal of assets belonging to an estate, trust, or deceased individual for personal gain or purposes not aligned with the intended distribution outlined in the estate plan.
  • Creditor Claims: Debts or claims filed against the estate by creditors.
  • Decedent: The deceased person whose estate is being administered.
  • Distributing Assets: The process of transferring assets to beneficiaries.
  • EIN (Employer Identification Number): A unique nine-digit number assigned by the IRS (for free) to identify a business entity, estate, or trust for tax purposes. The EIN is used for filing tax returns, opening bank accounts, and managing financial matters related to the estate or trust.
  • Estate Account: A separate bank account used for estate-related transactions.
  • Estate Distribution Schedule: A plan for distributing assets to beneficiaries.
  • Estate Inventory: A list of all assets and liabilities of the deceased.
  • Estate Liquidation: The process of converting assets into cash.
  • Estate Sale: The sale of a deceased person’s personal property.
  • Estate Tax Return: A document detailing the value of the estate for tax purposes. (There is currently no estate tax in the state of Ohio).
  • Fiduciary Duty: A legal obligation to act in the best interests of another party.
  • Letters of Administration: Legal documents granting authority to administer an estate.
  • Per Capita: A method of distributing assets equally among living descendants.
  • Per Stirpes: A method of distributing assets down family lines, even if descendants predecease the decedent.
  • Personal Representative: The person responsible for managing the decedent’s estate.
  • Probate: The legal process of validating a will and administering an estate.
  • Residuary Estate: The portion of the estate not specifically designated for beneficiaries.
  • Trustee:  A person or entity appointed to manage a trust’s assets according to the trust’s terms and for the benefit of the trust’s beneficiaries. The trustee holds legal ownership of the trust assets and is responsible for administering the trust in accordance with the grantor’s instructions or the trust document’s provisions.

Probate Law Terms:

  • Codicil: An amendment or addition to an existing will.
  • Estate Appraisal: The process of determining the value of estate assets.
  • Estate Attorney: A legal professional practicing in estate planning and probate law.
  • Estate Executor Bond: A financial guarantee to protect beneficiaries from the executor’s misconduct.
  • Estate Litigation: Legal disputes arising from will contests or other estate matters.
  • Estate Plan Review: Periodic evaluation and updating of estate planning documents.
  • Estate Planning Documents: Legal papers that include wills, trusts, and powers of attorney.
  • Executor’s Fee or Fiduciary Fee: Compensation for the person administering the estate.
  • Heir: A person legally entitled to inherit from the decedent.
  • Holographic Will: A handwritten and signed will, often subject to specific legal requirements.
  • Lien: A legal claim on property to secure the repayment of a debt.
  • No-Contest Clause or In Terrorem Clause: A provision in a will that disinherits beneficiaries who challenge it.
  • Personal Property Memorandum: A separate document specifying the distribution of personal property not included in the will.
  • Probate Court: The legal entity responsible for overseeing the probate process.
  • Residue Clause: The section of a will that addresses the distribution of remaining assets.
  • Testamentary Capacity: The legal requirement for a person to create a valid will.

Understanding these terms helps you navigate the complex and sometimes intricate world of estate planning, estate administration, and probate law. Whether you’re planning your own estate or assisting with the affairs of a loved one, having a grasp of these terms can help you make informed decisions and ensure a smooth legal process.

If you’re ready to take the next step in your estate planning journey, fill out my contact form or schedule a free 30 minute consultation call to get started.

Leave a Comment

The Comments