30 estate planning keywords you need to know

Estate planning is a critical process that everyone should undertake to ensure their assets are distributed according to their wishes upon their passing. However, it can be a complex process, and understanding the relevant vocabulary is crucial to make informed decisions. In this article, we will explore 30 estate planning vocabulary words and their definitions.

1. Estate: The total value of an individual's assets, including property, investments, and personal belongings, that they leave behind after their passing.
2. Will: A legal document that specifies how an individual's assets will be distributed after their passing.
3. Probate: The legal process of proving the validity of a will in court.
4. Trust: A legal arrangement in which a trustee holds assets on behalf of a beneficiary.
5. Executor: The person appointed in a will to manage the estate's distribution after the individual's passing.
6. Beneficiary: A person or organization designated to receive assets from a will or trust.
7. Power of attorney: A legal document that authorizes someone to act on behalf of another person, usually in case of incapacity or illness.
8. Intestate: Dying without a valid will, resulting in state laws dictating how assets will be distributed.
9. Estate tax: A tax imposed on an estate's value upon the individual's passing.
10. Gift tax: A tax imposed on the transfer of property or assets to another person without any financial consideration.
11. Inheritance tax: A tax imposed on beneficiaries who receive property or assets from an estate.
12. Living will: A legal document that specifies an individual's medical care and end-of-life wishes.
13. Health care proxy: A legal document that authorizes someone to make medical decisions on behalf of another person.
14. Living trust: A trust established during an individual's lifetime that manages assets on their behalf.
15. Revocable trust: A trust that can be modified or revoked during the individual's lifetime.
16. Irrevocable trust: A trust that cannot be modified or revoked once established.
17. Testamentary trust: A trust established in a will that goes into effect upon the individual's passing.
18. Pour-over will: A will that transfers any assets not included in a trust into the trust upon the individual's passing.
19. Trustee: The person responsible for managing assets in a trust on behalf of the beneficiary.
20. Fiduciary: A person or entity responsible for acting in the best interests of another person or entity.
21. Life insurance: An insurance policy that pays out a sum of money upon the individual's passing.
22. Beneficiary designation: A legal document that designates a person or organization to receive the benefits of an insurance policy or retirement account.
23. Advance directive: A legal document that specifies an individual's medical care and end-of-life wishes.
24. Estate planning attorney: A lawyer who specializes in estate planning and can provide guidance on the legal process.
25. Guardian: A person appointed to take care of minor children if both parents pass away.
26. Conservator: A person appointed to manage the financial affairs of an incapacitated individual.
27. Letter of intent: A document that outlines an individual's final wishes and preferences.
28. Per stirpes: A Latin term used in wills that means a beneficiary's share will be divided equally among their descendants if they pass away before the individual.
29. Per capita: A Latin term used in wills that means a beneficiary's share will be divided equally among all beneficiaries.
30. Transfer-on-death: A legal arrangement that designates a beneficiary to receive assets without going through probate.

Estate planning can be a complicated process, but understanding the relevant vocabulary is crucial to make informed decisions. Knowing these estate planning vocabulary words and their definitions can help individuals navigate the legal process and communicate effectively with estate planning professionals. By having a solid understanding of the vocabulary, individuals can ensure that their final wishes are properly documented and executed.

Furthermore, it is important to note that estate planning vocabulary may differ depending on the jurisdiction, and some terms may have specific legal meanings in different areas. Therefore, it is essential to work with an experienced estate planning attorney who can provide guidance on the specific laws and regulations in a particular jurisdiction.

Finally, estate planning is a vital process that involves various legal documents and terms. It is crucial to understand the vocabulary to ensure that an individual's final wishes are executed correctly. By working with a knowledgeable estate planning attorney, individuals can create a comprehensive plan that meets their unique needs and protects their assets for future generations.