A Look at the “lingo” of Estate Planning, and What All Those Words Mean
Educating yourself about estate planning can be
overwhelming. But when you keep running
into new and unfamiliar words, it can make the learning curve even more
daunting. Here is a list of commonly
used estate planning words, along with their definitions—in plain English.
Administrator. An administrator is the person who “administers” or oversees the distribution of an estate after someone dies without a will. The term can be used interchangeably with the term “personal representative.” The term “administrator” is sometimes confused with the term “executor.” An executor is the person who oversees the distribution of an estate after someone dies with a will.
Beneficiary. Someone named in a legal document, such as a will, trust, or life insurance policy, who derives advantage from something.
Bequeath. To “give,” or to leave property at one’s death.
Bequest. A gift of an item of personal property made at death. This does not include real property.
Bond. A kind of insurance policy that protects inheritors against loss that the personal representative of an estate might cause.
Codicile. A codicil is an amendment that modifies or partially revokes an existing or earlier will.
Degree of kinship. The degree of kinship is a way of calculating how closely related two people are. In estate planning or probate, the calculation begins with the decedent and proceeds by counting “upward” (or through the parents) and then downward to the person in question. The “degree of kinship is equal to the sum of these counts. For example, Don died and was survived by his mother Elizabeth, her sister Alice, and Alice’s son Jeff. To calculate the degree of kinship between Don and Jeff we begin with Don and count up to his mother (1 count), then over to her sister, (1 count), and finally down to Jeff (1 count). Jeff is said to be “three degrees” in relation to Don.
Decedent. Someone who has died.
Devise. A gift of real estate left at death. It is also a verb meaning “to give upon one’s death.”
Devisee. Someone who inherits real estate through a will.
Executor. This is the person who oversees the distribution of an estate after someone dies with a will. The term can be used interchangeably with the term “personal representative.” The term “executor” is sometimes confused with the term “administrator.” An administrator is the person who oversees the distribution of an estate after someone dies without a will.
Executrix. On old-fashioned term for a female executor. Today, most wills use the term executor regardless of the gender of the person.
Estate tax. A tax imposed by the federal government and by some state governments on transfers of property at death.
Failed or lapsed gift. A gift made in a will that cannot be given to the intended recipient because that person has not survived the will maker, and the will does not state what should happen to the gift.
Gift tax. A tax imposed on transfers of property by one individual to another while receiving nothing, or less than full value, in return.
Grantor. Someone who creates a trust. Also known as the settlor or trustor.
Heirs. If a person dies without a will, heirs are the people who are entitled, under the statues of intestate succession, to that person’s real and personal property.
Inheritance tax. A tax imposed on people who inherit property. Only a few states impose inheritance tax. There is no federal inheritance tax.
Intangible property. Assets that can’t be touched, such as ownership interest in a corporation or intellectual property.
Issue. This term refers to all of one’s children and their children, through the generations. It is also called lineal descendants. In Washington, an adopted individual is a lineal descendant of his/her adoptive parents.
Legacy. A gift of personal property at death.
Legatee. Someone who inherits a gift of personal property at someone’s death.
Net estate. This refers to the total value of the real and personal property of someone who has died, minus any exempt property, enforceable claims against, and debts of the deceased.
Nonprobate asset. A nonprobate asset is one that passes on the person’s death through a document or arrangement other than the person’s will. There are many ways to pass property outside a will. For example, joint tenancy with right of survivorship, joint bank account with right of survivorship, transfer on death deed, payable on death or trust bank account, or community property agreement
Personal property. Any kind of asset except real property.
Personal representative. This is a “catch all” phrase that includes the executor, administrator, or guardian. Sometimes abbreviated “PR.”
Probate. The legally supervised process of proving the validity of a will and carrying out its terms.
Real property. Real estate—in other words, land and things permanently attached to it.
Representation. When a person dies without a will, this is the method by which an heir inherits in place of a predecessor. It is often referred to as the “right of representation.”
Residue or residuary estate. All property passed through a will that is not given away specifically in the will. Often, a will leaves certain items to named beneficiaries and the “the residue of my estate” to another beneficiary.
Revocable trust. A trust that the settlor can revoke at any time during his or her lifetime.
Settlor. The person who creates a trust. Also known as the trustor or grantor.
Successor trustee. Someone who takes over as trustee if the original trustee can no longer serve.
Special administrator. This is a personal representative of the estate of a decedent who is appointed for limited purposes. The term “special administrator” is sometimes used in place of the term “personal representative.”
Testamentary. Having to do with or connected to a will. For example, a trust that is formed as a result of a will is called a testamentary trust.
Testator. Someone who executes (or signs) a will.
Trustee. Someone who has legal authority over the assets in a trust.
Trustor. The person who creates a trust.