A-B Or A-B-Q TrustThis term refers to the split between the portion of the surviving spouse (A) and the share of the deceased (B) that then goes to a Bypass Trust. An A-B-C trust, on the other hand, adds a marital deduction trust when the share of the decedent exceeds the tax-free allowance that then goes to the Bypass Trust.
AbatementThe act of suspending a case before the estate is closed. This can be due to a lack of adequate financial resources to handle the existing debts.
AbsoluteGiving the inheritance to an heir without any conditions.
AccountingA periodic report that is prepared by the executor, administrator, or a trustee showing the financial activity of the estate or the trust for a defined period.
AcknowledgmentA declaration that is used to confirm the validity of a legal instrument such as a will or a trust.
ActuaryA statistician that computes pension rates and premiums, dividends, and reserves on behalf of someone else.
AdemptionThe failure for a request on the property to go through just because the property isn’t part of the estate of the testator anymore at the time of death.
Administration of an EstateThe process of overseeing the affairs of the decedent’s trust or estate.
Administrator (male)/Administratrix (female)A person or a financial entity that is assigned the task of taking care of the estate of a decedent that died intestate or that failed to name an executor when the named executor cannot handle the tasks assigned to him.
Administrator With Will AnnexedThe administrator that takes the place of an executor in a will. This is possible when the executor isn’t able to perform his duties or isn’t available at the time when he is needed.
AdoptionA judicial act of establishing a legal parental relationship without any genetic linkage.
AdultIn New York, a person that is 18 years of age or older is regarded legally as an adult.
Advance Medical DirectivesA document that the will-maker comes up with to state his wishes concerning life-sustaining treatments or chooses a person to make medical decisions on their behalf.
AffiantThe person that swears to the truthfulness of the statements that are in a sworn statement.
AffidavitA written declaration or assertion that is made of your own accord and confirmed by oath by the affiant before a notary to administer the declaration.
AgentThe person granted the power to act on behalf of another person, as if he was the one making the decisions.
Age-Restrictions Trust/Age Limit TrustA trust that bases on age-defined restrictions to distribute the assets. For instance, the will-maker can come up with a trust to distribute assets after every one year or when the beneficiary attains a certain age, say 25 years.
Agreement For SaleTerms and conditions that define the sale of an asset by a seller to a buyer. The terms also include the sell amount as well as the expected date of final payment. During this time, the seller retains total control over the property.
AlienA person that lives in a country where he is not a legal citizen. See “non-citizen.”
Alimony PaymentsThe legal obligation to make payments to your spouse when a marriage ends.
Alternate Valuation DateA date that falls exactly six months after the death of the will-maker. This is the date when the executor decides to revalue the property for tax purposes or not.
AmortizationA plan to repay a loan in equal payments over a certain period. Each payment comprises the principal and the interest accrued over time.
Anatomical GiftsA donation of all or part of the human body that takes effect after the donor passes away. The donation can be for therapy, transplantation, or research.
AncestorA person that comes before you in a lineage – a parent, grandparent, or great-grandparent.
Ancillary AdministrationProbate proceedings that are held in another state from the state of domicile where the decedent owned real estate. The aim is to pass the estate in the foreign state to a new owner.
Ancillary JurisdictionA law that operates outside the state of residence of the decedent. For instance, if the decedent owned property in Texas but lived in New York, then the law in Texas is considered ancillary jurisdiction.
Annual ExclusionThe amount in the form of assets that can be given to an heir every year free of tax.
AnnuitantThe individual that receives an annuity.
Annuity GiftsAn agreement between the donor and a charitable organization allowing him to transfer assets to the charity in exchange for an income or tax reduction.
Annuity TrustA trust that is made by an annuitant with a third party where he receives a specific amount of money at specific intervals, for a specific term or life. Can be either in cash or in assets.
Ante-nuptial AgreementA contract between a couple that is seeking to get married, which defines the property rights for each spouse and the kids.
Anti-LapseA statute that prevents the property or gifts to relatives from lapsing unless the relative doesn’t have an heir of his own.
Applicable Credit AmountA credit that you get against the federal estate tax. Every person is entitled to a certain amount in credit to use for paying off federal tax that is due.
Applicable Exclusion AmountAn amount transferable at death of a will-maker with federal estate tax-deferred.
Applicable Exemption AmountSee “applicable exclusion amount.”
AppointorThe person with the power to nominate and fire the trustees as per a deed or a will.
Apportionment RuleA statute that ensures all estates are treated equally. For instance, taxes are imposed on the estates according to the size of the estate.
AppraisalsComing up with the value of an estate by use professional appraisers.
AppraiserThe expert that is tasked with determining the value of the asset for tax purposes.
Appreciated PropertyAssets that have attained a higher value over time, usually during the marriage.
Articles Of IncorporationThe document that defines the formation of a corporation. The document states the information about the corporation that is required by law, such as the name, number of directors, purpose, and much more.
Ascertainable StandardThe standard that relates to the health of an individual, education, and support.
Asset Protection Trust (domestic and offshore)An irrevocable trust drafted to allow the trustor to be the beneficiary of the trust as well. This trust protects the assets in the trust against creditors. These trusts are advantageous to people in high-risk professions such as doctors.
Assets subject to administrationThe property that is subject to administration in a probate court, meaning the property that the deceased person owned and remains in the estate because there is no clear designation for a beneficiary.
AssignmentGranting the rights to a property to someone else or an entity.
Attending PhysicianThe physician with the primary responsibility for the treatment and care of a patient with a terminal disease.
AttestationThe act whereby you witness the signing of a legal document by another person and by a witness. For instance, a will requires the signature of the will-maker and attestation by two or more witnesses.
AttorneyA professional that specializes in law practice. The person is responsible for giving legal advice to clients and has the qualifications to prosecute and defend actions in front of a judge.
Attorney-In-FactAn individual assigned the task of handling a person’s financial affairs under a Power of attorney.
Attribution RuleA set of IRS guidelines that prevent the establishment of business ownership structures that are designed to bypass some tax laws.
BankruptcyA legal proceeding that involves a person or entity that is unable to repay their debts.
BasisThe initial acquisition price of an asset.
BeneficiaryA term that denotes a person or entity that is entitled to receive a portion of the property after the will-maker dies. This can include recipients of life insurance, estate, retirement benefits, and more. If there is a will, the beneficiary can take the assets without the need for probate.
Primary BeneficiaryThe main individual in line to receive the inheritance. There can be multiple primary beneficiaries.
Secondary BeneficiaryThe individual set to receive the inheritance when the primary beneficiary passes away before the will-maker.
Contingent BeneficiaryAn individual who inherits the assets only when certain conditions are met.
Beneficiary DesignationA governing agreement that designates the recipient of an annuity policy, insurance policy, POD, or pension.
Beneficiary TrustTrusts that are established for the benefits of children.
BequeathThe first-person term that denotes leaving someone personal property. For example, “I bequeath my house to my son Tim.”
Bequest/Charitable BequestA gift of personal property given through a will. Generally refers to all transfers performed under a will.
BondAn amount of money posted by a personal representative on the condition that the amount is forfeited when the executor doesn’t carry out the matters of the estate appropriately.
Business Buy-OutAn agreement that sets down the rules for purchasing a controlling interest in a company or a business.
Buy-Sell AgreementA legally binding contract that defines how the shares of a partner will be reassigned upon their demise or if they leave a business.
By RepresentationA term used in probate law that spells out how property that dies intestate is to be distributed when the beneficiary is deceased.
By-LawsRules established in a judiciary or a community.
Bypass TrustSee “AB Trust or Credit Shelter Exemption Trust.”
C Corporation (C Corp)A company that operates separately from the owners and shareholders. The shareholders are taxed differently from the entity.
Capital Gain (and losses)The difference between the basis and the selling price when assets are liquidated. This computation is usually used in tax computation. It is a gain when the selling price is higher than the basis and a loss when the opposite is true.
Certificate of Appointment of Estate Trustee (grant of probate)A document that proves that the person has the legal right to handle a decedent’s estate.
Certified CopyThe official copy of a document that can be presented to the court and notated as a complete, true, and authentic representation of the original document.
Charitable GivingThe act of voluntarily giving something you own or money to a charitable organization.
Charitable Lead Trust (CLT)A trust for a fixed period where the charity is the beneficiary, and the remainder of the estate is given to a non-charitable beneficiary.
Charitable Remainder Trust (CRT)Refers to a trust whereby the donor retains the right to the trust for a few years of life, and the charity only receives the property when the person dies. The property isn’t liable to tax at death, even when the donor retained the income stream.
Charity/Charitable OrganizationA trust, organization, or corporation set up in the country as a public foundation, private foundation, or a charitable organization. It works for the benefit of other people, communities, or groups and devotes itself to helping others.
ChattelSee “intangible personal property.”
Checklist For WillA list of requirements that you need to fulfill for a will to be considered valid and admissible to court.
Child SupportSee “alimony.”
Children(1) The biological kids of the will-maker with the current spouse. (2) Children that have been adopted by a will-maker. (3) Step-children, if the will indicates so. (4) Children born out of wedlock.
Children’s TrustA trust that is established as part of the will or out of the will to provide funds for a child over time.
Chose In ActionThe authority to bring a lawsuit to recover money owed, clear debts, or chattels.
Civil UnionA legal relationship that happens between two people that gives legal protections to the partners only at the state level.
ClaimThe obligation of the estate to a third party, such as a creditor, whether it has been incurred before death or as a result of the death of the will-maker. An example is the debts owed to creditors.
ClassA category of people that have qualities or certain attributes in common. For instance, “parents.”
Closely Held BusinessA business organization where the ownership is held among a limited number of people from the same family instead of the public.
Closely Held StockStock that is held by a small number of people, usually family.
CodicilA written modification to the will that either adds clauses or eliminates some aspects of the will.
Co-administratorsTwo or more people named in a will to manage an estate. Usually a bank or an individual such as a lawyer, friend, or a spouse.
CollateralThe property that you give to a lender as security for a loan.
CollectablesAn item with substantial value due to its rarity. These items are usually bought with the expectation that the value will increase over time.
Common DisasterWhen two or more people, usually wife and husband, die due to the same situation, and when the two die within a short period of each other.
Common Pot TrustA trust that holds the assets in a lump sum until the beneficiaries reach a certain age or until a predetermined event occurs.
Common-Law MarriageA marriage without a civil ceremony, usually as a result of an agreement by two people to marry after living together for some time.
Community PropertyA type of ownership between spouses or partners where the couple’s properties are considered community-owned. Therefore, each individual possesses half of the assets that have been acquired during the period they were married. This law is applicable in only a few states.
Community Property With Right Of SurvivorshipThe statute combines the two forms of ownership – “common property” and “right of survivorship.” The statute protects the living spouse by dictating that the will doesn’t give another person community property owned by the couple.
CompensationThe act of paying an equivalent of the damages caused to a person.
Conformed CopyA copy of the original document where, instead of the signatures being made by hand, they are printed or typed out.
ConsanguinityA term denoting the natural bond that exists between people who are of the same lineage.
ConservatorA term that applies to some states, denoting a guardian of an incapacitated person or a minor.
Corporate FiduciaryWhen a trust company or bank exercises fiduciary powers over an estate as per the state rules.
Contemplation Of DeathExpecting to pass away soon, which triggers the process of creating a will to pass on your estate.
ContingencyThe possibility of an event coming to pass; an event that might occur and change the way things are done.
Contingent FiduciaryThe second in line to a fiduciary role, such as an executor or an administrator to an estate. This role comes into play when the designated fiduciary isn’t able to handle the task or cannot be found.
ContractA written agreement that is legally enforceable between two or more people or entities. Each party has a legal obligation they are required to fulfill.
Contractual AssetsA document that spells out how to dispose of the assets by a beneficiary designation.
ConveyTo transfer the titles of assets to a living trust.
Corporate TaxA tax that is imposed on the profits of a firm by the federal government.
Corporate TrusteeA licensed institution that acts as a trustee for different kinds of trusts.
CorporationA legal entity existing to conduct business but remaining separate from owners.
CorpusThe amount of money or assets set aside to produce income for a beneficiary.
Costs Of AdministrationThe necessary costs that you have to incur to collect, administer, and distribute the estate. They include administrative, operating, accounting costs, and more.
Co-TrusteeThe situation where a trust is overseen by more than one trustee with equal rights and powers.
Credit Shelter TrustA process that allows well-to-do couples to avoid estate taxes when distributing their estate to beneficiaries, usually the kids.
CreditorThe person or entity that you owe an obligation to because they gave you something of value in exchange.
Crummy Withdrawal RightThe right of a decedent to withdraw the annual gift put in trust for the beneficiary. Usually, this right is available to the will-maker for 30 days, and when the period ends, the funds have to remain in the trust under the control of the trustor.
CTA (cum testament annexo)The term means that the deceased has left a will without appointing an executor to it. Additionally, it applies when the executor is incompetent to perform what has been assigned to them or refuses to act in the assigned capacity.
CurtseyThe right of a spouse to receive a predetermined portion of the decedent’s assets. Usually, the portion falls between one-third to one-half.
CustodianThe person who is appointed to oversee the management and distribution of funds to a child as per a will.
Cy-Pres DoctrineWhen the initial objective of the will-maker is impossible to perform, the court uses this doctrine to change the terms of the charitable trust to be closer to what the testator wanted.
The benefits arising from the insurance policy, pension, or annuity.
Someone who owes money to a creditor.
A spouse that has passed away.
A person that has died.
A trust that is set up upon the demise of the will-maker to take advantage of tax benefits.
Declaration Of Trust
A trust agreement that evidences, supports, and establishes in writing and is declared to be true and correct. The agreement has to be dated and signed by the trustor and show the name and date of establishment.
An order made by the court to determine the rights of parties in the lawsuit.
A monetary amount the taxpayer is allowed by law to deduct from income when determining the tax.
A real estate instrument that is written and signed by the person selling the property.
Deed Of Trust Or Mortgage
A contract between a debtor and a creditor to give the assets to a third party that will act as the trustee. The aim is for the trustee to retain the assets pending the payment of the debt.
An agreement that permits the trustor to pass the trust to you before their demise.
The will-maker’s lineal descendants across all generations, with the relationship being defined by the definitions of the child-parent found in the probate code.
A person assigned a task in a legal agreement.
To dispose of an estate according to a valid will.
An individual or an entity that has been named in the will to receive a property/devise.
Directive to Physicians
A written instrument that directs the physician on how to deal with life support decisions.
A digital entity that is owned by a company or an individual.
Digital Estate Planning
The act of organizing your digital assets and deciding what happens to them when you pass away.
Property transfer that skips a generation. An example would be a grandfather giving property to a grandchild.
Federal benefits that require the existence of a mental or physical impairment that can end in death or incapacitation to qualify.
The potential heir who rejects the assets that have been passed on to them by the trustor.
The process of legally refusing a devise, whereby the asset then passes to the descendants of the person that rejected the assets in the first place, or to other beneficiaries depending on the law applicable to the situation. Typically, the disclaimers need to be made within nine months of demise to be applicable.
A statute that allows a spouse to add specific assets to the trust by rejecting a part of the estate.
The intended beneficiary set to benefit from a discretionary trust. See “discretionary trust.”
A trust that gives the trustee all discretion concerning the payments for the trust beneficiary.
To cut off someone from an inheritance. A parent is allowed to cut off a child from the inheritance, but they cannot do the same for a spouse.
A clause that specifies the people that can be disinherited, therefore protecting others.
The act of legally bringing a marriage to an end.
A legal termination of a marriage before a court of law.
An ex-spouse, as a result of a divorce.
Domestic Relations Order (QDRO)
A court order that grants a spouse to receive all or part of the benefits of an employee’s retirement plan after a divorce.
The home that you regard as a permanent residence. The laws of the state of domicile determine how your estate is distributed when you pass away.
The person that receives the gift from a donor. See “beneficiary.”
The person who, while still alive, passes on the property to another person using a trust. See “grantor.”
Do-Not-Resuscitate (DNR) Order
A medical order that clarifies when to use and not to use CPR when the patient’s heart stops, or they stop breathing.
A provision of the law that gives rights to a widow to get support from property or land that the husband has left behind. Aimed to use for her care and the care of the children.
Durable Power Of Attorney
A written document enabling an individual (principal) to select someone to act as an attorney-in-fact or agent to make decisions on their behalf. This form of designation doesn’t get terminated when the person becomes incompetent or incapacitated. However, they get terminated when the will-maker dies.
A long-term trust that allows the trustor to pass the estate to beneficiaries without having to pay transfer taxes such as estate and gift tax.
A proceeding for the management of a decedent’s estate where the court is involved to a large extent. It requires various papers to be filed with the court and many hearings to be made before a judge. Usually used in intestacy.
Earned IncomeThe money you are paid as a result of providing a service or due to an investment.
ElderlyBeing of an age that is nearing or surpasses the life expectancy of humans.
Employee BenefitsIndirect, non-cash compensation given to employees. These can be company-based or mandated by the law, for instance, social security benefits.
EncumbranceAny claim or a restriction on the asset’s title.
End-Of-Life CareCare that is provided for the people that are near the end of their lives.
Endowment InsuranceA type of life insurance that pays out the face value of the policy are the end of the period or upon the death of the insured person.
End-Stage ConditionAn advanced, progressive, and irreversible condition due to accident, old age, injury, or illness.
EquityThe difference between the fair market value of all your property and the amount you still owe on the assets, if any.
ERISA (Employee Retirement Income Security Act (1974))The law that establishes a minimum standard that employers offering health, retirement, disability, and life insurance policies to follow.
EscheatThe process of assigning your property to the state when you die without known beneficiaries under a will and no known heirs if the will-maker died intestate.
EstateThis word denotes several things depending on the context in which you use it. Under federal taxes, it refers to all the property of the decedent that can be taxed. Under probate, it refers to the property that is subject to administration in probate court.
Estate PlanningThe process of overseeing a will-maker’s property to reduce taxes while offering the best way to dispose of their wishes.
Estate PlannerA professional, specializing in assisting people through the process of coming up with an estate plan.
Estate AdministrationThe process of locating and collecting the assets of the decedent, paying creditors, and distributing the property to heirs done by the executor under the supervision of the court.
Estate Settlement CostsThe costs that you incur when distributing the assets as per the instructions in the will. These include accounting costs, legal fees, and other expenses.
Estate TaxesA tax that is imposed upon the transfer of property upon demise. This tax is only imposed on the transfers that exceed the exclusion amount.
Estate TrustThe trust a spouse sets up to protect the assets of a surviving spouse.
EthicsPrinciples that conduct the governing of a profession or a career.
ExecuteTo perform, implement, or to make. The term is used legally to mean to implement something, for instance, to execute a deed is to come up with a deed, to execute a contract is to get to the end of a contract.
Executor (male)/Executrix (female)The individual or entity that is named to oversee the estate of a person that died intestate. The executor is supervised by the probate court and submits reports to the court unless you specify as a will-maker that the person will serve as an independent executor.
Exempt PropertyIn New York, this denotes a home, personal effects, or other assets that are exempt from creditors. In the context of the probate process, this is a property that is set aside in favor of a dependent kid or a surviving spouse.
Exempt GiftsA gift that you give to someone else that isn’t subject to gift tax laws.
ExemptionPrivileged freedom from paying tax or any other duty.
Financial PlannerA professional specializing in helping people handle their finances through planning in different financial areas.
Failure To IssueDying without any lineal descendants such as children or parents.
Fair Market ValueThe price at which an informed seller that isn’t forced to sell can be willing to sell the asset to a buyer that isn’t being forced to purchase the asset.
Family AllowanceThe amount of money that the living spouse is entitled to from the estate of a decedent spouse during the period the estate is under probate. The amount is not set; rather, it is a reasonable amount that is payable to the family.
Family Limited Liability Company (FLLC)See “Family limited partnership.”
Family Limited PartnershipA type of business ownership that grants the owners improved protection against the liabilities of the federal and estate tax.
Family TrustA kind of trust that is established to benefit people that are related to each other by blood, law, or affinity. They are established with a primary role of passing the assets to beneficiaries.
Federal Estate TaxTaxes levied by the federal government upon the decedent’s right to pass over the property to successors.
FiduciaryComes from a Latin word denoting trust and confidence. This is a standard term that refers to a person or an entity that represents the decedent in making decisions on the estate. They include a guardian, trustee, or administrator, and other agents that are given powers of attorney.
Fiduciary TaxesTaxes that are imposed on the fiduciary during the administration of the assets.
First-To-Die Policy (Joint Life Insurance Policy)A policy that gives you the kind of coverage you want while saving you money on the premiums. The policy pays out the benefits, the whole of it, when a spouse dies; making sure that your family is adequately taken care of.
Flexible Spending Accounts (FSA)A type of account that gives the account holder tax advantages that they need. You can use the money in the account to pay for some health care costs.
Forced ShareThe part of the deceased person’s estate that the living spouse has rights to.
Form 1040IRS tax form that you use to file federal tax returns.
Form 1041A tax return for a decedent’s estate or living trust after the demise of the will-maker.
Form 706A tax form that is used by the executor to calculate the estate tax that is owed on the estate.
Form 709A form used to report taxable gifts.
Form K-1A form that is used for reporting revenue, losses, and dividends of partners. Also used to report these aspects of shareholders in an S Corporation.
Funding a TrustAn act of transferring assets to a trust, failure which the trust might not be considered valid.
Future ValueThe value of the estate after a certain period, based on factors that affect the change in the valuation of the asset.
General Bequest/Residuary BequestA gift that comes out of the overall estate and not a specific part of the estate.
Generation-Skipping Transfer TaxAn additional tax on transfers to beneficiaries that are more than a generation younger than the will-maker.
Generation-Skipping TrustCreating a trust for members of the lineage that are a generation apart, for instance, creating a trust for your grandkids. The trust helps avoid double taxing.
Gift LeasebackThe act of giving part of your estate to a beneficiary then leasing back the asset for your use.
Gift TaxA tax levied on the gifts you give to an individual that is above the annual exclusion.
GiftA voluntary transfer of your assets.
Going Concern ValueA business that operates without a threat of liquidation soon.
Grant DeedA deed where the grantor confirms by way of signature that the property doesn’t belong to another person and that it doesn’t have a lien other than what has been already noted down on the deed.
GranteeThe person who receives a gift from a grantor.
GrantorIn the context of the trust, refers to the person who establishes the trust. When used in the context of a will, the term refers to the person that is transferring real estate in a deed.
Grantor Retained Annuity Trust (GRAT)When a donor passes away before the end of the term, then the value of the trust is passed down to the beneficiary. The trust aims to reduce taxes.
Grantor Retained Interest TrustsAn irrevocable trust allowing the grantor to save on estate taxes and gift taxes while enjoying income from the trust through the term of the trust.
Grantor TrustsA trust that dictates how the assets of a will-maker to be managed and distributed after the death of the grantor.
Gratuitous TransfersA gift or the transfer of assets that have value for nothing in return.
Gross EstateTo calculate federal tax, the total value of assets, real or personal, that the decedent owned or controlled at the time of demise.
Gross Probate EstateFor federal estate purposes, this is the total value of the property that a decedent owned that goes through probate.
Guardian of an EstateAn adult individual or financial entity that is appointed by the court to manage the property on behalf of an incapacitated person or a minor. The guardian oversees the property until the minor becomes an adult or the incapacitated person becomes competent enough to handle the property on their own.
Guardian of the PersonAn adult that is appointed by the court to care for a minor or an incapacitated person. The will-maker can decide.
GuardianshipA court process that grants authority to the guardian to handle the affairs of the individual that cannot do so by himself.
Health Care Proxy/Agent/SurrogateAn individual authorized by law to make health care decisions for a person who is incapacitated.
Health Care RepresentativeAn individual appointed by the court to make health decisions on your behalf if you cannot do so yourself due to incapacitation.
Heir ApparentA person who is likely to inherit the estate if they outlive the will-maker.
Heir At LawA person who has the legal right to inherit property under intestate succession laws.
Heir TestamentaryAn heir designated in a will drafted in a form prescribed by law.
HeirAn individual who inherits assets either through a will or from a person who died intestate.
Hereditary SuccessionThe process of distributing a person’s estate to relatives in a specific order when they pass away intestate.
Holographic WillA will that is written in the handwriting of the will-maker and is not witnessed by others.
HomesteadAlso known as the dwelling, this refers to the house where you reside and the adjoining land where your family lives.
Honorary TrustA trust that does not specify a clear beneficiary and can be created for charitable purposes or even for animals.
HR-10 Plans (Keoghs)Retirement plans that allow self-employed workers to have similar savings opportunities to those offered by pension plans or IRAs provided by other companies.
In-KindRefers to the return of a similar article to the lender by the borrower.
Incapacitated PersonThe individual that has been determined by the court of being incapable of handling their personal or financial affairs.
Independent AdministrationThe portion of the deceased person’s estate that is administered without supervision from the probate court.
Independent ExecutorAn administrator that is allowed to act independently of provisions of the probate court. The will must provide for this, or all intended beneficiaries must agree to allow the executor to work independently.
Inchoate InterestA property interest that you are set to receive at a later time.
Incidents Of OwnershipThe rights that apply to the ownership interests in an insurance policy. The rights include the ability to change a beneficiary, change types of premiums, and borrow on the policy.
IncomeThis is money or anything of value that you receive as an individual or a business, usually in exchange for a service.
Income BeneficiaryThe heir that holds an interest in the money generated from a trust or another asset.
Income TaxA tax that is imposed by the federal government on income generated from trusts or property.
IncompetenceThe inability to manage one’s affairs, including due to old age, weakness of mind, disease, and other causes.
IncorporationThe legal process that is used to form a company or a corporate entity.
Individual ProprietorA person that owns a business entirely and is responsible for all the debts incurred by the business.
Individual Retirement Account (IRA)A tax-advantaged investing tool that allows individuals to make money from their retirement savings.
Informal WillA will that doesn’t meet all the requirements of a proper will but can still be presented to probate for authentication.
InheritTo receive property from a deceased person as per a will or intestate.
InheritanceAssets or other properties that are passed down to the heir when he passes on.
Inheritance TaxA tax levied on the right to acquire property from a decedent. This is different from estate tax that is levied on the right to transmit tax, and not the right to receive it.
Inherited IRA/ Beneficiary IRAThe account that the service provider sets up when you inherit an IRA account or another policy after the will-maker passes on.
Institutional TrusteesA bank or other financial institution that can serve as a fiduciary.
InstrumentA term that denotes an agreement or a document.
InsuranceA contract whereby one party pays money in the form of premiums and the other party guarantees to cover certain losses.
Insurance TrustA trust that is formed to make a person a beneficiary for an insurance policy.
Intangible Personal PropertyProperty that isn’t physical; rather, it is represented by some paper, such as mutual funds, stocks, cash, or bank accounts.
Intentionally Defective Grantor Trusts (IDGTs)A strategy to transfer the estate to family members when the grantor is still alive.
Inter Vivo Trust/Living TrustA term used to denote agreements that are made while living. So an inter vivo trust denotes a trust made when the trustor is alive.
InterlineationsThe addition of a clause to a document after it has been already signed.
IntestacyDenotes dying without leaving a will behind.
Intrinsic ValueThe essential value of something, recognized everywhere and by all people.
InventoryA formal list of assets that the personal representative submits to the court during the probate hearing.
Irrevocable TrustA trust that cannot be modified or revoked by any person at all. A big percentage of the revocable trusts become irrevocable after a while, especially when the will-maker dies.
IssueA general term that denotes all natural children and their descendants through the generations. Even adopted children fall under this category. See “lineal descendants.”
Joint OwnershipA type of shared property ownership where every owner has an undivided interest in the property. Usually seen in real estate ownership.
Joint PropertyA property that has a co-owner named on the title or deed. Co-owners retain the ownership of the property upon the demise of another owner.
Joint TenancyOwning tangible property by multiple people with the element of survivorship. The law is such that when one tenant dies, the other one owns the interest entirely.
Joint Tenancy With Right Of Survivorship (JTWROS)This code applies to co-owners of property held under joint ownership that entitles the co-owner to take over the entire property when the other tenant passes away.
Joint WillA will that cannot be modified by one party alone. Revoking the will is only done when both will-makers decide to do so.
Judgment CreditorA person or entity that the court of law has decided has authority to receive money from the estate.
JurisdictionThe authority that a court has to rule on legal issues in a dispute, determined by the type of case and the geographic location.
KindredAll the persons that are described as the relatives of the will-maker under the New York probate code. This includes family members such as parents, children, siblings, and other blood relatives.
Leave a LegacyTo make an impressive contribution to society, usually through entrusting, giving, donating, or endowing assets via a will.
LapseThe failure of a property or gift left in a will due to the death of the intended heir and there being no alternative beneficiary named to take over the role.
LawA set of rules that have a binding force and can be enforced by the authority in place, governing the conduct of individuals and society.
Lawful HeirsThe persons that have been designated by the law to receive an inheritance from a deceased person, typically close family members such as parents, children, and siblings.
Lawful IssueRefers to the lineal descendants of an individual, such as children, grandchildren, and so on.
LegacyAn old legal term that means the transfer of personal assets via a will. See “bequest.”
Legal HeirsSee “kindred.”
LegateeA person named in the will to receive a specific property or asset.
LesseeA person to whom the lease of a property or asset is granted.
LessorThe person or entity that grants the lease of a property or asset to a lessee.
Letter Of AttorneySee “power of attorney.”
Letter Of Last InstructionA signed letter that provides a detailed inventory of properties and liabilities, along with personal preferences regarding the transfer of assets, funeral and burial instructions, and other wishes after death.
Letters Of AdministrationThe document issued by the probate court clerk, granting the administrator the legal right to act on behalf of the deceased person.
Letters Testamentary/Letters Of OfficeThe document issued by the probate court clerk, granting the executor the legal authority to manage and distribute the assets of the deceased person’s estate according to the terms of the will.
LiabilityThe legal responsibility or obligation to compensate for damages or debts.
LienAn official claim or legal right against a property or asset to secure payment of a debt or obligation.
Life EstateA condition in which a person has the right to use and enjoy a property during their lifetime, after which the property passes to another beneficiary.
Life Insurance TrustA type of irrevocable trust that shields life insurance policies from being treated as part of the taxable estate upon the death of the insured.
Life Prolonging ProcedureMedical procedures that are used to prevent death when it is likely to occur, such as CPR, mechanical breathing assistance, and drug administration.
Limited Liability Company (LLC)A legal business structure that offers limited liability protection to its owners, known as members, while also allowing flexibility in management and taxation.
Limited Liability Partnership (LLP)A type of partnership where some partners have limited liability, protecting them from the partnership’s debts and obligations, while other partners have unlimited liability.
Limited Power Of AttorneyA form of power of attorney that grants the agent limited powers to act on behalf of the principal. Also known as a special power of attorney.
LiquidityThe degree to which an asset can be quickly and easily converted into cash without significantly affecting its value. Assets with high liquidity can be readily sold or used as collateral.
Living TrustSee “revocable trust, inter vivos trust.”
Living WillA legal document that expresses a person’s wishes regarding medical treatments and life-sustaining measures in case they become incapacitated and unable to communicate their decisions.
Lump-SumPaying a specific amount of money as a single, complete payment, rather than in installments or over time.
MalpracticeAn error due to ignorance or negligence by a professional person, such as a doctor, lawyer, or accountant, resulting in harm or damages to a client or patient.
Marital DeductionA tax code provision allowing a deduction for gifts given to a spouse during the donor’s lifetime or left to the surviving spouse in a will or trust after the donor’s death.
Marital Property AgreementA contract signed between spouses before or during marriage to change the rights of property ownership and distribution under the laws of New York. The agreement can pertain to separate and community property and may address issues related to assets, debts, and spousal support.
Marital ShareThe portion of the deceased person’s estate that a surviving spouse is entitled to receive under the applicable laws of inheritance or the terms of a will.
Marital TrustA trust established for the sole benefit of a surviving spouse with the primary goal of reducing estate taxes on the estate left behind for the surviving spouse. The surviving spouse is entitled to the assets held in the trust and may also receive income generated from the trust assets.
Material ProvisionAn essential provision in a will that is crucial to carry out the testator’s intentions and distribute the assets as intended.
MedicaidA public health insurance program in the United States that provides healthcare coverage to low-income individuals and families, including the elderly and disabled.
Mental CapacityThe legal and mental ability of an individual to understand the nature and consequences of their decisions and to make informed choices.
Minimum Distribution RequirementsA set amount that individuals must withdraw each year from their Individual Retirement Accounts (IRA) and retirement plans sponsored by the federal government once they reach a certain age, typically after turning 72.
MinorsIn New York, individuals who are below 18 years of age. However, certain legal restrictions and limitations on rights may continue until the individual reaches 21 years of age under specific circumstances.
MortgageA loan that individuals obtain by pledging real estate as collateral. The borrower (mortgagor) receives funds from a lender (mortgagee) and agrees to repay the loan over a specified period, with interest.
MotionA formal request made to a court by one of the parties involved in a legal case, seeking a ruling or order on a specific issue or aspect of the case.
Multiple ProbatesSee “ancillary probate.”
Muniment of TitleA probate proceeding that allows the court to accept a will as evidence of title to real property without the need for full estate administration. This procedure is only applicable when the estate has no debts, and no other property administration is required.
Mutual/Reciprocal WillsTwo separate wills executed by partners in a marriage, containing the same provisions and reflecting the reciprocal agreement to dispose of their assets in a particular manner upon their deaths.
Net EarningsThe amount remaining after deducting expenses from the gross earnings of an estate, business, or individual.
Net EstateThe value of an estate at the time of death, calculated by subtracting any outstanding liabilities and debts from the total assets of the estate.
No Contest ClauseA provision in a will or trust that is intended to dissuade disgruntled beneficiaries from challenging the validity of the document. The clause stipulates that if a person contests the will or trust and loses, they forfeit their entire inheritance.
Non-CitizenAn individual who is not a citizen of the country in question. In the context of estate planning and tax laws, non-citizens may be subject to specific rules and regulations.
Non-Grantor TrustAny trust that is not taxed to the person who establishes the trust and transfers assets to it. Instead, the trust itself is responsible for paying taxes on its income and gains.
Non-Marital Share (Separate Property)Property brought into a marriage by each spouse individually, which remains separate from the marital assets and is not subject to division in the event of divorce or death.
Non-Probate PropertyAssets that are not subject to the probate process upon the death of the owner. Non-probate assets may include life insurance benefits, retirement accounts with designated beneficiaries, and property owned jointly with rights of survivorship.
Non-Qualified Retirement AccountA retirement plan that does not meet the requirements for tax-favored treatment under the Internal Revenue Code. Non-qualified retirement accounts offer additional employer benefits and often come with more flexible contribution and withdrawal options.
Notary PublicA public officer with the authority to witness and authenticate legal documents, such as affidavits, deeds, and powers of attorney. The notary public’s signature and official seal lend credibility to the documents.
Nuncupative WillAn oral will, declared verbally by the testator in the presence of witnesses. Nuncupative wills are typically made during a terminal illness when the testator is unable to create a written will. They are subject to specific legal requirements and may not be recognized in all jurisdictions.
OfficerAn individual appointed to fulfill the functions of an office on behalf of the general public or a specific organization. Officers may include executives, directors, or other individuals in positions of authority.
Offshore Asset Protection TrustsA trust established in a foreign country with the primary purpose of safeguarding assets from potential creditors and minimizing tax liabilities.
Omitted HeirAlso known as a “pretermitted heir,” an omitted heir is a person who would have been entitled to inherit from a deceased person’s estate but was not included in the will. In certain situations, pretermitted heirs may still have legal rights to a portion of the estate.
By Operation Of LawThe rights and obligations that are automatically assigned to a person by operation of the law, without the need for a written agreement or explicit intention. These legal rights arise as a result of specific circumstances or events.
Out-Of-State PropertyAssets that are located in a state other than the one where an individual is domiciled or considered their primary place of residence.
Ownership Of PropertyThe legal right of an individual or entity to possess, use, control, and dispose of a specific thing or asset exclusively, without interference from others. Ownership grants the authority to transfer the property to others or convey interests in it as desired.
Palliative CareSpecialized medical care provided to individuals living with a terminal illness, such as cancer, focused on alleviating pain and improving the patient’s quality of life.
Partnership AgreementA written contract that establishes the rules, rights, and responsibilities to be followed in a business partnership.
Payable-On-Death Account (POD)An account that designates a beneficiary to receive a certain amount of money upon the account owner’s death. The account owner retains full control of the account during their lifetime.
PecuniaryRelating to money or monetary matters; consisting of a monetary nature or something that can be valued in terms of money.
Pension PlanA retirement fund, typically sponsored by an employer or government entity, from which regular payments are made to the pensioner after retirement.
Per Capita DistributionA method of distributing assets among the heirs as individuals, regardless of their relationship to the deceased, with each person receiving an equal share.
Per Stirpes DistributionA method of distributing assets where the descendants of a deceased person receive the share that their deceased parent would have received if alive.
Perfect TrustA trust that has been created in full compliance with the laws and regulations of the state.
Persistent Vegetative StateA medical condition where patients with severe brain damage are in a state of partial consciousness and lack true awareness of their surroundings.
Personal EffectsItems owned for personal use, such as jewelry, clothing, and personal belongings.
Personal PropertyProperty owned individually, including assets such as jewelry, vehicles, bank accounts, and stocks. Personal property excludes real estate.
Personal RepresentativeA person or financial entity appointed by the probate court to administer the estate of the deceased.
PetitionA formal request made to a court, typically seeking a legal judgment or action after giving proper notice.
Pickup Tax/Sponge TaxA federal estate tax that some states may collect as part of their inheritance tax.
Pooled Income FundA type of charitable trust where individual gifts are pooled and invested together, and the income from the fund is distributed among the participants based on their contribution percentage.
Pour-Over WillA will that directs assets not part of a living trust to be transferred into the trust upon the testator’s death.
Power Of AppointmentA power granted in a trust document that allows the holder to determine how trust assets are distributed, either through a will or directly under the trust.
Power Of AttorneyA legal document that grants authority to an agent to make decisions on behalf of the principal (the person granting the power) until their death or incapacitation.
Precatory LanguageLanguage in a will or legal document that expresses a wish or desire but does not impose a legally binding obligation.
Predeceased SpouseA spouse who has passed away before the testator (the person making the will) while still married.
Preliminary DistributionA petition seeking court approval to distribute all or part of the deceased’s estate that a rightful heir is entitled to. The court may grant this distribution if it appears that the estate has no outstanding debts or expenses.
Prenuptial AgreementA legal agreement entered into before marriage that outlines how the assets of each spouse will be treated in the event of divorce or death.
Present-Interest GiftsThe transfer of property to a donee (recipient) that immediately grants them the right to take possession of and use the property.
Pretermitted HeirA child or spouse unintentionally left out of a will. If the court determines that the omission was accidental, the pretermitted heir is entitled to inherit from the estate as if the testator had died without a will.
PrincipalThe person who establishes a trust (also known as a “grantor”) and contributes assets to it.
ProbateA court procedure to validate the authenticity of a will or determine the rightful heirs if there is no will. The term is commonly used to refer to the entire legal process of handling a deceased person’s estate, including collecting assets, paying debts, and distributing the estate to heirs.
Probate ProceedingA legal process, often initiated with a petition, that culminates in a hearing before a probate judge to determine whether a will should be admitted to probate.
Probate CodeAlso known as the “uniform probate code,” it refers to a set of state laws that govern the probate process, including rules related to wills, estates, and trusts.
Probate CourtThe state court responsible for overseeing the probate process, managing the deceased’s assets and debts, and determining the distribution of the estate to potential heirs.
Probate Fees Or TaxesThe costs associated with filing a probate case in court, which are typically calculated based on the size of the estate.
Probate PropertyAssets subject to the probate process, including real estate and individual assets owned by the decedent.
PropertyAssets, both tangible and intangible, that an individual or entity owns and has legal rights over.
ProxyAlso known as an “agent,” a proxy is a person authorized to act on behalf of another individual, especially in legal or business matters.
Prudent Man RuleA legal standard that gives discretion to fiduciaries (such as trustees) to manage the affairs of the trustor (the person who established the trust) and invest trust assets in low-risk investments, acting in the best interest of the beneficiaries.
Qualified CharityAn organization that meets specific criteria and qualifies for tax benefits, including tax deductions and income. This can include federal, state, and local government entities if donations to them are made for charitable purposes.
Qualified DisclaimerAn irrevocable refusal to accept a designation in the estate of a decedent, particularly as a surviving spouse.
Qualified Domestic Trust (QDOT)A trust established to allow the assets of a decedent to be transferred to a surviving spouse who is a non-citizen.
Qualified Retirement PlanA retirement plan that complies with the requirements of the Internal Revenue Code (IRC) sections 415 and 414(s).
Real PropertyRefers to land, buildings, and real estate that an individual owns. It includes assets attached to the land, such as minerals.
RecordingThe process of filing a legal document, such as a will or a deed, with the clerk of the court.
RemainderAssets that remain after all the beneficiaries have received their portion and all expenses have been paid off. A pour-over will is used to distribute the assets.
RemaindermanAn individual who has the right to the remainder of the estate after a trust has been dissolved.
RenunciationThe act of declining to act as an administrator of an estate even after being named as one. To renounce the role, you have to sign relevant documents and present them to the court.
ResRefers to the principal or corpus of a trust. The assets held in the trust that generate income or other benefits.
ResidenceA dwelling; the place where a person stays with their family and considers it their home.
Resident AgentA fiduciary who resides in the state where the probate case is taking place and provides notices to other interested parties to the estate.
Residuary BeneficiaryA person or entity that receives assets that remain after every other beneficiary has received their share.
Residuary EstateThe property that remains in an estate after all specific gifts have been distributed to the beneficiaries.
ResidueRefers to the remainder of an estate after all debts, taxes, and specific gifts have been paid.
RestatementA total amendment of a will to make it different. Any previous will is deemed null and void.
- Changing the title of a will-maker’s property to a beneficiary.
- The act of transferring assets from an estate to a living trust.