Glossary of Terms

Frequently used terms in the field of Estate Planning and Elder Law.

Advance Directive

See Durable Power of Attorney for Healthcare.

Ancillary Administration

A probate proceeding necessary when a deceased person owned real estate in a state other than his home state.

Annual Exclusion

An exclusion from taxes for monetary gifts on an annual basis.

Annuity

The payment of a specific amount on a periodic basis for a specific length of time.

Beneficiary

An individual who is, or will be, a recipient of benefits from a trust, gift or bequest.

Codicil

An amendment in writing to a will.

Conservator

A person or institution appointed by a court that is responsible for the assets of an adult who has been deemed unable to look after his or her own financial affairs.

Domicile

A person’s home or permanent residence.

Donee

A person who receives a gift from a Donor.

Donor

A person who gives a gift.

Durable Financial Power of Attorney

A written instrument in which one person (the principal) appoints another to manage financial affairs in the event that the principal becomes unable to handle his or her own affairs.

Durable Power of Attorney for Health Care (POAHC)

A written instrument in which one person (the principal) appoints another to make health care decisions in the event that the principal becomes incapacitated. This instrument can contain instructions about specific medical treatment that should be applied or withheld.

Estate

All of a person’s assets and liabilities.

Estate Tax

Tax levied on an estate valued at more than the excludable amount as determined by the IRS.

Executor

The person appointed in a will, or by a court, to administer an estate.

Fiduciary

A person or institution that serves as a financial representative, such as a trustee or Conservator.

Gift Annuity

A gift in which the donor receives an annuity for life, which is less than the value of the gift given.

Gift Tax

A tax on gratuitous transfers, usually only over $11,000, to non-charitable beneficiaries.

Gift Program

An established program of annual gifts within the amount of Annual Exclusion.

Grantee

A person to whom something is granted or conveyed.

Grantor

The person who grants or conveys something.

Guardianship

A legal proceeding by which one person (the guardian) is appointed by a court and charged with the legal right and duty to care for another person who is unable to care for himself/herself.

Heir

Someone who may possibly inherit assets from an estate of another who has died.

Income Tax Basis

The value of an asset for income tax purposes.

Inheritance Tax

An estate tax assessed by the state.

Intervivos Trust

A trust created during someone’s lifetime.

Intestate

Dying without a will.

Irrevocable Trust

A trust, which, once executed, may not be revoked or changed.

Joint Tenancy

A type of ownership of property by two or more persons in which each owns an interest in the whole. At the death of any joint tenant, his or her interest automatically passes to the surviving joint tenant(s) by law.

Living Trust

A trust created during someone’s lifetime.

Living Will

A written instrument in which one person (the principal) appoints another to make health care decisions in the event that the principal becomes incapacitated. This instrument can contain instructions about specific medical treatment that should be applied or withheld.

Lump Sum Gift

A one-time only gift, as opposed to a program that uses an annual exclusion.

Minimum Distributions

Required withdrawals from a retirement plan usually at age 70-1/2.

Pourover Will

A will used in conjunction with a Revocable Trust so that assets outside of the trust are distributed in accordance with the provisions of the trust.

Probate

The process by which assets controlled by a will are transferred to heirs or beneficiaries.

Revocable Trust

A trust in which a Trustor reserves the right to revoke or change its provisions.

Spousal Rollover

If retirement plans are payable to a surviving spouse, the spouse has an option to place the funds into his or her own retirement plan to defer income tax on the funds.

Survivor

A surviving spouse, co-owner, or beneficiary.

Testate

Dying with a will.

Testator/Textatrix

The person who makes a will.

Trust

A legal tool used to manage and distribute assets.

Trustor

The person who creates a trust.

Trustee

The person who manages the assets in a trust.

Will

An instrument through which a person disposes of property after death.