Estate Planning contains words and lingo that can be confusing. Here's a "cheat sheet" of definitions to help you.
ADVANCE HEALTH CARE DIRECTIVE
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A document that gives someone else the ability to make health care decisions for the Principal, and gives instructions for making those decisions. |
AGENT
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The person or entity who is authorized to act by the Principal of a Financial Power of Attorney or Advance Health Care Directive. |
ASSIGNMENT |
A way to transfer assets that do not have a title (such as tangible personal property or a promissory note). Also the act of transferring the assets. |
BENEFICIARY
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A person or entity that receives assets. |
CAPACITY
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The mental ability required to make a document or to enter into a legal agreement. The level of capacity required depends on the type of document or the complexity of the agreement. |
DEED
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A document that transfers real property. |
DURABLE POWER OF ATTORNEY FOR HEALTH CARE
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A document that gives someone else the ability to make health care decisions for the Principal. |
EXECUTOR
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The person appointed by a probate court to administer a deceased person’s probate estate. This person is nominated in a Will but cannot serve as Executor until appointed by a judge. |
FIDUCIARY
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A person or entity that is entrusted to manage assets on behalf of someone else. This includes Trustees, Executors, and Agents. |
FINANCIAL POWER OF ATTORNEY
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A Power of Attorney that applies to finances only. |
IRREVOCABLE (TRUST)
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No ability to revoke (terminate) or amend (change). |
LIVING WILL
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A document that sets out your end-of-life wishes. |
PERSONAL PROPERTY
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Any asset that is not real property. This includes tangible personal property as well as bank accounts, copyrights, patents, promissory notes, and business interests. |
POWER OF ATTORNEY
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A document that gives someone else the ability to make decisions for the Principal. |
PRINCIPAL
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The person who sets up a Power of Attorney, Financial Power of Attorney or Advance Health Care Directive. |
REAL PROPERTY
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Land. Real property can be developed (with buildings on it) or undeveloped (no buildings on it). |
REMAINDER DISTRIBUTION
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A gift of everything left over after the specific gifts have been distributed. |
REVOCABLE (TRUST)
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The ability to revoke (terminate) or amend (change). |
REVOCABLE LIVING TRUST
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A Trust that can be revoked or changed and that is established during the Settlor/Trustor’s lifetime. |
SETTLOR
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The person who sets up the Trust. (Also called a Trustor.) |
SPECIFIC GIFT
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A gift of a specific item, such as your wedding ring, your house or a specific dollar amount (ie: $10,000). |
TANGIBLE PERSONAL PROPERTY |
Personal property that you can touch, such as jewelry, vehicles, furniture, collections, art, books, clothes and other household items. |
TESTATOR |
The person who sets up the Will/the person whose Will it is. |
TRUST
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A document that sets out the Settlor/Trustor’s wishes and that appoints a Trustee to administer the Trust estate. |
TRUSTEE
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The person or entity that manages the assets in a Trust and distributes the assets according to the Trust. |
TRUSTOR
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The person who sets up the Trust. (Also called a Settlor.) |
WILL
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A document that nominates an Executor and spells out how probate assets are to be distributed on death. |
WILL, POUROVER |
A Will that gives your estate to your Trust (Estate "pours over" into your Trust). |