Administrator -A person appointed by the Court to collect and distribute a deceased person's estate when the deceased died instate, his will did not appoint an executor, or the executor refuses to act.

Alternate Beneficiary - Person or organization named to receive your assets if the primary beneficiaries named in your Trust die before you do.

Annual exclusion – The amount an individual may give annually to each of an unlimited number of recipients free of gift or other transfer taxes. In addition, these gifts do not use any of an individual’s gift tax exemption amounts.

Ascertainable standard – A standard, usually relating to an individual’s health, education, support, or maintenance, that defines the permissible reasons for making a distribution from a trust. Use of an ascertainable standard prevents distributions from being included in a trustee/beneficiary’s gross estate for estate tax purposes. Depending on income tax law, the use of an ascertainable standard may provide less protection for a beneficiary from creditors. If the risk of a lawsuit or divorce concerns you, you should discuss distribution standards with your attorney.

Assets - Basically, anything you own, including your home and other real estate, bank accounts, life insurance, investments, furniture, jewellery, art, clothing, and collectibles.

Assignment - A short document that transfers your interest in assets from your name to another. Often used when transferring assets to a trust.

Attorney-in-Fact – The person named as agent under a power of attorney to handle the financial affairs of another.

Basis - What you paid for an asset. The value that is used to determine gain or loss for income tax purposes.

Basic Will- A will that distributes everything to your spouse, if living, otherwise to your children when they reach the age of majority (18 years old).

Beneficiary – A person who will receive the benefit of property from an estate or trust through the right to receive a bequest or to receive income or trust principal over a period of time.

Bequest –A gift by will of property other than land.

Capacity - The legal competence to effectively perform a given act (e.g. to write a Will or Trust, to enter into a binding contract).

Certificate of Trust - A shortened version of a trust that verifies the trust’s existence, explains the powers given to the trustee, and identifies the successor trustee(s). It does not reveal any information about the trust assets, beneficiaries, or their inheritances.

Children’s Trust - A trust included in your living trust. If, when you die, a beneficiary is not of legal age, the child’s inheritance will go into this trust. The inheritance will be managed by the trustee you have named until the child reaches the age at which you want him/her to inherit.

Codicil – A formally executed document that amends the terms of a will so that a complete rewriting of the will is not necessary.

Conservator – An individual or a corporate fiduciary appointed by a court to care for and manage the property of an incapacitated person, in the same way as a guardian cares for and manages the property of a minor.

Conservatorship - Probate proceeding initiated to supervise management of the property of an incapacitated or incompetent person.(Also see Guardianship).

Contest - To dispute or challenge the terms of a will or trust.

Corporate Trustee - An institution, generally a bank or trust company, that specializes in managing trusts.

Creditor - Person or institution to whom money is owed.

Custodian - Person named to manage assets left to a minor.

Deceased - One who has died.

Decedent – An individual who has died.

Deed - A document that lets you transfer title of your real estate to another person(s). Also see warranty deed and quitclaim deed.

Demonstrative Legacy -A demonstrative legacy is payable from a specified fund.

Descendants – An individual’s children, grandchildren, and more remote persons who are related by blood or because of legal adoption. An individual’s spouse, stepchildren, parents, grandparents, brothers, or sisters are not included. The term “descendants” and “issue” have the same meaning.

Devise - A gift by will of real property; the beneficiary is called the devisee.

Disclaim - To refuse to accept a gift or inheritance so it can go to the recipient who is next in line.

Disclaimer – The renunciation or refusal to accept a gift or bequest or the receipt of insurance proceeds, retirement benefits, and the like under a beneficiary designation in order to allow the property to pass to alternate takers.

Disclaimant - the person who makes the disclaimer.

Discretion - It is full or partial power to make a decision or judgment.

Distribution –The process of handing over to the beneficiaries their entitlements under a deceased person's will or on his intestacy.

Disinherit - To prevent someone from inheriting from you.

Distribution - Payment in cash or asset(s) to one who is entitled.

Durable power of attorney – A power of attorney that does not terminate upon the incapacity of the person making the power of attorney.

Equitable Title: Beneficial ownership of an asset; the right to use, spend, consume and/or enjoy an asset or its income.

Estate – An individual’s property and assets—including real estate, bank accounts, life insurance polices, stocks, and personal property such as automobiles and jewellery.

Estate planning – A process by which an individual designs a strategy and executes a will, trust agreement, or other documents to to distribute one’s assets to his/her heirs. It covers financial, legal and tax aspects of wealth in the interest of legal heirs or intended beneficiaries.

Executor (male)/Executrix (female) - The one nominated in a Will and thereafter appointed by the Probate Court to manage and distribute a decedent’s estate in accordance with the terms of the Will. He or She may also be referred to as a Personal Representative. 

Family trust – A trust established to benefit an individual’s spouse, children or other family members.  A family trust is often the bypass trust or credit shelter trust created under a will.

Fiduciary – An individual or a bank or trust company designated to manage money or property for beneficiaries and required to exercise the standard of care set forth in the governing document under which the fiduciary acts and state law. Fiduciaries include executors and trustees.

Fiduciary Responsibility - A serious responsibility of trust imposed upon one by the law, requiring the utmost degree of integrity and prudence in dealing with the property entrusted to the fiduciary (e.g. Trustee, Administrator, Executor, Guardian, Conservator, Agent).

Grantor – A person, including a testator, who creates, or contributes property to, a trust. If more than one person creates or contributes property to a trust, each person is a grantor with respect to the portion of the trust property attributable to that person’s contribution except to the extent another person has the power to revoke or withdraw that portion. The grantor is also sometimes referred to as the “settlor,” the “trustor,” or the “donor.” Contrast with the use of the term “grantor trust” to imply a trust the income of which is taxed to the person considered the “grantor” for income tax purposes.

Guardian – An individual or bank or trust company appointed by a court to act for a minor or incapacitated person (the “ward”). A guardian of the person is empowered to make personal decisions for the ward. A guardian of the property (also called a “committee”) manages the property of the ward.

Heir –  An individual entitled to a distribution of an asset or property interest under applicable state law in the absence of a will. “Heir” and “beneficiary” are not synonymous, although they may refer to the same individual in a particular case.

Holographic Will - A handwritten will.

Homestead Exemption - Portion of your residence (dwelling and surrounding land) that cannot be sold to satisfy a creditor’s claim while you are living.

Incapacity - A person's inability to act on his or her own behalf, i.e. the "sound mind" requirement for drafting a valid will. A court makes a finding of incapacity.

Inheritance –Property that a beneficiary receives from the estate of a deceased person.

Irrevocable trust – A trust that cannot be terminated or revoked or otherwise modified or amended by the grantor. As modern trust law continues to evolve, however, it may be possible to effect changes to irrevocable trusts through court actions or a process called decanting, which allows the assets of an existing irrevocable trust to be transferred to a new trust with different provisions.

Insurance Trust - An irrevocable Trust established to own life insurance on a person, so designed as to exclude the proceeds of the policy – the death benefit – from the insured person’s taxable estate at death.

Interest of a beneficiary – The right to receive income or principal provided in the terms of a trust or will.

Inter vivos trust - trust that is created during a person's lifetime and holds property for the benefit of another.

Intestate/Intestacy - Dying without leaving a valid Will or Trust in effect, such that the decedent’s estate is distributed in accordance with law.

Inventory – A list of the assets of a decedent or trust that is filed with the court.

Legal Title - “Registered ownership” of an asset. It refers to the person(s) whose name is on the deed, signature card, registration certificate, etc. 

Legacy - A gift of personal property effected by will. Specific legacy is a particular identifiable object.

Legatee/Beneficiary -The person to whom a legacy is given.

Life beneficiary – An individual who receives income or principal from a trust or similar arrangement for the duration of his or her lifetime.

Living Trust - A revocable trust established during a grantor's lifetime that is used for the placement of some or all of the grantor's property.

Living Will - Binding legal document that sets forth a person's wishes regarding the use of life-sustaining treatment in the event that he or she becomes terminally ill or permanently unconscious.

No-Contest Clause – A provision in a will or trust agreement that provides that someone who sues to receive more from the estate or trust or overturn the governing document will lose any inheritance rights he or she has.  These clauses are not permissible in all instances or in all states.

No Will – A decedent dies without a valid will, so that his or her estate passes to heirs based on the laws of descent and distribution of his or her state.

Personal representative – Executor or administrator of a decedent’s estate.

Per stirpes – A Latin phrase meaning “per branch” and is a method for distributing property according to the family tree whereby descendants take the share their deceased ancestor would have taken if the ancestor were living. Each branch of the named person’s family is to receive an equal share of the estate. If all children are living, each child would receive a share, but if a child is not living, that child’s share would be divided equally among the deceased child’s children.

Pour over will – A will used in conjunction with a revocable trust to pass title at death to property not transferred to the trust during lifetime.

Power of attorney – Authorization, by a written document, that one individual may act in another's place as agent or attorney-in-fact with respect to some or all legal and financial matters. A power of attorney terminates on the death of the person granting the power (unless “coupled with an interest”) and may terminate on the subsequent disability of the person granting the power .

Power of withdrawal – A presently exercisable power in favour of the power holder other than a power exercisable in a fiduciary capacity limited by an ascertainable standard, or which is exercisable by another person only upon consent of the trustee or a person holding an adverse interest in the trust.

Principal – The property (such as money, stock, and real estate) contributed to or otherwise acquired by a trust to generate income and to be used for the benefit of trust beneficiaries according to the trust’s terms also referred to as trust corpus.

Probate – Probate is an acceptance or approval by the court of law that how testator's assets are to be settled.

Procrastination - Delaying any process or action to be taken. Most common reason people neglect to establish basic estate plan while alive, often resulting in unnecessary expense, and delay, taxes and family friction after death of procrastinator.

Property – Anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein.

Prudent man rule – A legal principle requiring a trustee to manage the trust property with the same care that a prudent, honest, intelligent, and diligent person would use to handle the property under the same circumstances.

Real Property - Land and property that is permanently attached to land (like a building or a house).

Recorded Deed - A deed which has been filed with the district land records. This creates a public record of all changes in ownership of property in the state.

Residue – The property remaining in a decedent’s estate after payment of the estate’s debts, taxes, and expenses and after all specific gifts of property and sums of money have been distributed as directed by the will also called the residuary estate.

Revocable trust – A trust created during lifetime over which the grantor reserves the right to terminate, revoke, modify, or amend.

Separate Property - Generally, all assets you acquire prior to marriage and assets acquired by gift or inheritance during marriage.

Settle an Estate - The process of handling the final affairs (valuation of assets, payment of debts and taxes, distribution of assets to Beneficiaries) after someone dies.

Settlor - Trustor; Grantor.

Special Gifts - A separate listing of special assets that will go to specific individuals or organizations after your incapacity or death, also called special bequests.

Self-dealing – Personally benefiting from a financial transaction carried out on behalf of a trust or other entity, for example, the purchasing of an asset from a trust by the trustee unless specifically authorized by the trust instrument.

Spendthrift provision – A trust provision restricting both voluntary and involuntary transfers of a beneficiary’s interest, frequently in order to protect assets from claims of the beneficiary’s creditors.

Stepped-up Basis - Assets are given a new basis when transferred by inheritance (through a will or trust) and are re-valued as of the date of the owner’s death. If an asset has appreciated above its basis (what the owner paid for it), the new basis is called a stepped-up basis. A stepped-up basis can save a considerable amount in capital gains tax when an asset is later sold by the new owner. 

Surviving Spouse - The spouse who is living after one spouse has died.

Successor Trustee - Person or institution named in the trust document who will take over should the first trustee die, resign, or otherwise become unable to act.

Tangible personal property – Property that is capable of being touched and moved, such as personal effects, furniture, jewellery, and automobiles. Tangible personal property is distinguished from intangible personal property that has no physical substance but represents something of value, such as cash, stock certificates, bonds, and insurance policies. Tangible personal property also is distinguished from real property, such as land and items permanently affixed to land, such as buildings.

Tenancy in common – A co-ownership arrangement under which each owner possesses rights and ownership of an undivided interest in the property, which may be sold or transferred by gift during lifetime or at death.

Tenancy by the entirety – A joint ownership arrangement between a husband and wife, generally with respect to real property, under which the entire property passes to the survivor at the first death and while both are alive, may not be sold without the approval of both.

Testamentary – Relating to a will or other document effective at death.

Testamentary trust – A trust established in a person’s will to come into operation after the will has been probated and the assets have been distributed to it in accordance with the terms of the will.

Testate –Having left, at one's death, a legally valid will.

Testator – A person who makess a will. If a female, may be referred to as the testatrix.

Trust – An arrangement whereby property is legally owned and managed by an individual or corporate fiduciary as trustee for the benefit of another, called a beneficiary, who is the equitable owner of the property.

Trust instrument – A document, including amendments thereto, executed by a grantor that contains terms under which the trust property must be managed and distributed also referred to as a trust agreement or declaration of trust.

Trustee – The individual or bank or trust company designated to hold and administer trust property (also generally referred to as a “fiduciary”). The term usually includes original (initial), additional, and successor trustees. A trustee has the duty to act in the best interests of the trust and its beneficiaries and in accordance with the terms of the trust instrument. A trustee must act personally (unless delegation is expressly permitted in the trust instrument), with the exception of certain administrative functions.

Trustor: - One who establishes a Trust.

Trust Estate (Trust Property) - The assets transferred to the Trustee by re-registering their legal titles in the name of the Trustee. The Trust Estate can include real estate, bank accounts, stocks, bonds, brokerage accounts, partnership interests, tangible personal property, and many other types of financial and legal interests.

Will – A writing specifying the beneficiaries who are to inherit the testator’s assets and naming a representative to administer the estate and be responsible for distributing the assets to the beneficiaries.