Estate Planning Glossary

Administrator

The individual assigned to act in the place of an executor for a deceased individual lacking a will.

Advance Decision

Also known as a living will, personal directive, advance directive, medical directive, or advanced healthcare directive, an advance decision is a legal document specifying how medical treatment should be administered in the event that someone can’t make a decision.

Advanced Healthcare Directive

Also known as a living will, personal directive, advance directive, medical directive, or advance decision, an advanced healthcare directive is a legal document specifying how medical treatment should be administered in the event that someone can’t make a decision.

Asset

A valuable item.

Attorney-in-Fact

An individual authorized to make business decisions on behalf of another.

Beneficiary

An individual, organization, or entity that receives assets from an estate, trust, retirement account, life insurance policy, or account with a transfer on death (TOD) designation.

Bequest

Assigning ownership of an asset to a person, organization, or charity through a will.

Buyout Agreement

A document describing what affected parties can and can’t do when a partner dies or leaves a business. Also called a “buy-sell agreement.”

Capital

The current value of an asset or group of assets.

Crypto Will

A smart contract that controls how assets may be distributed once proof-of-death is generated.

Deed

A legal document used to transfer ownership of an interest in property or land.

Durable Power-of-Attorney

Durable power-of-attorney gives an individual the authority to make decisions on behalf of another person and stays in effect if the individual becomes incapacitated.

Estate

Refers to both the assets, and the total value of the assets minus any loans, debts, or liabilities, left by an individual upon their death.

Estate Planning

The process of arranging the management and distribution of an individual’s assets during their life and after death, typically with the goal of minimizing tax liability.

Estate Tax

A tax on the right to transfer property at death, typically only affecting a small number of individuals whose wealth exceeds the legal exclusion limit.

Executor

An individual, organization, or entity appointed in a will to administer an estate.

Family Trust

A legal document enabling family members to inherit assets while avoiding probate and avoiding or delaying taxes.

Funeral Prepayment Plan

An agreement to pay the costs associated with services like viewings, burial, or cremation in advance.

Healthcare Directive

A document outlining an individual’s wishes with regard to medical treatment and enabling the individual to appoint someone to make decisions on their behalf.

Heir

An individual, organization, or entity eligible to receive assets from an estate, trust, retirement account, life insurance policy, or account with a transfer on death (TOD) designation.

Inheritance

Assets from an estate, trust, retirement account, life insurance policy, or account with a transfer on death (TOD) designation.

Inheritance Tax

A levy paid by an individual who inherits assets. Often confused with an estate tax, which is paid by the estate of the deceased.

Illiquid

Describes an asset that can’t easily be sold or exchanged for another asset.

Legacy

The assets distributed to beneficiaries after a person dies.

Liabilities

Debts that must be paid by an individual’s estate before assets can be dispersed.

Liquid

Describes an asset that can easily be sold or exchanged for another asset.

Living Will

Also known as an advanced healthcare directive, personal directive, advance directive, medical directive, or advance decision, a living will is a legal document specifying how medical treatment should be administered in the event that someone can’t make a decision.

Medical Directive

Also known as a living will, personal directive, advance directive, or advance decision, a medical directive is a legal document specifying how medical treatment should be administered in the event that someone can’t make a decision.

Next of Kin

The person closest to a deceased individual, typically a spouse, the closest blood relative, or the beneficiary of the individual’s estate.

Obituary

A news article detailing the life and legacy of a deceased individual.

Payable-on-Death Account

A financial account with a designated beneficiary who receives ownership of the assets if the owner dies.

Per Capita

Distributing the assets of an estate such that each child receives the same proportion of assets.

Per Stirpes

Distributing the assets of an estate such that each branch of a family, however defined, receives the same proportion of the assets.

Power of Attorney (POA)

The authority to make decisions on behalf of another person. POA ends when the person granting it revokes it, becomes incapacitated, or dies. Durable POA ends when the person granting it revokes it or dies.

Private Foundation

A tax-exempt organization that enables ongoing charitable giving.

Probate

The legal process of settling an estate. The process involves establishing the validity of the will, collecting and accounting for the deceased’s assets, paying debts and taxes, and distributing the remaining assets.

Probate Inventory

A list of assets and liabilities relating to the deceased’s estate.

Probate Registry

The legal office, often located in a courthouse, where an executor may apply to administer a deceased individual’s estate.

Revocable Trust

A trust that enables assets to be distributed to beneficiaries without the delay or expense of probate but may be changed or terminated prior to death. Also referred to as a living trust.

Statutory Notice

A notification required by law, typically within a specified period of time.

Succession Plan

Also known as a buyout agreement, a succession plan is a legal document outlining what happens when a partner leaves a business or dies.

Trust

A legal arrangement enabling one person or entity to hold assets on behalf of another.

Trustee

The person or organization responsible for managing a trust.

Will

A legal document describing how a person wants their assets to be distributed after death.