Here are some legal terms you may run across as you serve as an executor. For many more definitions, see Nolo's Plain-English Law Dictionary.
Administrator
The person appointed by the court to manage an estate when there is no valid
will; called a personal representative in some states. An administrator has the
same duties as an executor.
Applicable Exemption Amount
A lifetime federal estate and gift tax exemption. Transfer of property up to
the applicable exemption amount generally will be exempt from the unified
estate and gift tax. For deaths in 2011, the applicable exemption amount is $5
million.
Advance Medical Directive
A legal document setting out a person's wishes for end-of-life
healthcare, in case someday the person is unable to communicate those wishes.
Also called a living will.
Attorney-in-Fact
The individual who is given authority, in a document called a power of
attorney, to act on behalf of another.
Beneficiary
Someone who receives benefits or funds under a will, trust, or contract, such
as an insurance policy.
Codicil
An addition to a will, adding to or changing the terms of the will.
Community Property
A system of laws used in nine states (Arizona, California, Idaho, Louisiana,
Nevada, New Mexico, Texas, Washington, and Wisconsin) to determine the ownership
interest of a husband and wife in property acquired during marriage.
Durable Power of Attorney
A legal document that lets someone designate another person, called an agent or attorney-in-fact, to act on his or
her behalf. The agent's authority remains in place even if the person who created the durable power of attorney becomes incapacitated.
Durable Power of Attorney for Health Care
A legal document that gives someone the authority to act on another person's behalf
with regard to health care decisions.
Estate
The property or assets a person owns or has rights to.
Estate Tax
A tax imposed at one's death on the transfer of property. The federal
government imposes estate tax on very large estates; some states also impose an
estate tax.
Executor
The person named in a will to manage the deceased person's estate; called the
personal representative in some states. The executor collects the property,
pays any debt, and distributes the remaining property according to the terms of
the will.
Fiduciary
A person or institution legally responsible for the management, investment, and
distribution of funds. A fiduciary has a legal obligation to act in the best
interest of the person for whom he or she is serving.
Grantor
The person who creates a trust and transfers assets into it for the benefit of
another. Also called settlor or trustor.
Gross Estate
The total property or assets held by an individual at death, as defined for
federal estate tax purposes.
Guardian
The person legally entrusted with the care of a minor child.
Incapacity
The lack of ability to act on your own behalf.
Inter vivos
In Latin, "between the living." Sometimes used instead of
"living trust," a type of trust created by a living settlor to hold
property for the benefit of another.
Intestacy, Intestate
The term applied when an individual dies without a valid will.
Irrevocable
Describing something that cannot be changed or terminated--for example, certain
kinds of trusts.
Joint Tenancy with Right of Survivorship
A way of holding title to co-owned property. At the death of one of the
co-owners, the other will become the sole owner of the property, regardless of
what may the deceased owner's will says.
Living Trust
A revocable trust established by a grantor during his or her lifetime in which
the grantor transfers some or all of his or her property into the trust.
Living Will
A legal document setting out a person's wishes for end-of-life healthcare, in
case someday the person is unable to communicate those wishes. Also called an
advance medical directive.
Marital Deduction
A deduction allowing for the unlimited transfer of property from one spouse to
the other free of federal estate and gift tax.
Minor
A person who has not yet reached the legal age of majority, 18 in most states.
Personal Representative
Another term for executor or administrator.
Power of Appointment
A right given to another in a document, such as a will or trust, that allows
the other to decide how to distribute property. The power of appointment is
"general" if it places no restrictions on who may receive the
property. A power is "limited" or "special" if it limits
the eventual distributees.
Probate
The court-supervised process of wrapping up a deceased person’s financial affairs.
The court appoints an executor, rules on the validity of the will, and
supervises the executor, who pays debts and taxes and eventually distributes
the property to inheritors.
Testamentary Trust
A trust that is created at death, by the terms of a will.
Trust
An arrangement under which one person, the grantor, creates a trust, transfers
property to it, and appoints a trustee. The trustee manages trust property for
the benefit of another, called a beneficiary.
Trustee
The person named in a trust document who manages the property held in trust. A
trustee can be an individual or a corporate fiduciary.
Will
A legal document controlling the disposition of a person’s property at death.
