Sometimes talking to a lawyer can be like talking to someone speaking another language. Although we try very hard to make sure the information we are giving you is easy to understand, here is a cheat sheet of common estate planning terms you can refer to if it starts to sound like we are speaking a foreign language.
Administrator - This is the person that carries out the wishes of the deceased. It can also be called the executor or the personal representative. This person is typically named in the will, but he or she can also be appointed by the court.
Beneficiary - A person who benefits from an estate plan is called a beneficiary. People sometimes refer to beneficiaries as heirs, but they actually mean two different things. Heirs are people who are related to the person who died, while beneficiaries can be anyone the person who died wants to benefit.
Codicil - If you want to make a small change to your will without re-doing the whole thing, you can add a codicil.
Estate - All the assets (property, bank accounts, art, etc.) and debts (unpaid bills, loans, etc.) left by someone who has died.
Executor - This is the person that carries out the wishes of the deceased. It can also be called the administrator or the personal representative. This person is typically named in the will, but he or she can also be appointed by the court.
Heir - Heirs are the people who are legally entitled to inherit a deceased person’s estate if the deceased person had no estate plan. If the deceased person had an estate plan, we usually talk about beneficiaries instead of heirs because people often like to leave stuff to people or organizations that the law would not automatically recognize.
Personal Representative - This is the person that carries out the wishes of the deceased. It can also be called the administrator or the executor. This person is typically named in the will, but he or she can also be appointed by the court.
Living Will/Healthcare Directive - This is the document that tells your doctors and your family what you want to have happen if you are too ill to make healthcare decisions for yourself. For example, if you fall into a coma, do you want them to insert a breathing tube?
Power of Attorney - When you give someone power of attorney, they are able to make decisions on your behalf. You can set up a financial power of attorney and a healthcare power of attorney.
Probate - In order for a will to be valid, it must be approved by the courts. Taking a will to court to be validated and then carrying out all the directions in it is known as probating it.
Trust - A trust is a legally created entity that has the power to hold property. Many people use trusts in their estate plans because it can help you avoid the probate process and may reduce taxes.
Trustee - Trusts can’t run themselves! The person who manages the property in a trust and follows the directions laid out by the person that created the trust is known as a trustee. The trustee is legally required to make good decisions for the trust and the people and organizations that are supposed to benefit from the trust.
Will - A will is a written document that lays out a person’s plans for what should happen to their assets and debts after they die.
