ESTATE PLANNING LEGALESE

Sometimes it is hard to understand lawyers because they seem to speak their own language. While WLF|Trust Company tries to speak plain english and avoid speaking in legalese, it is inevitable that legal terms will come up during the estate planning process. Here is a helpful glossary on the most commonly used terms:

Agent: Someone who is authorized by another to act for or in the place of that person. ​

Asset: Anything owned by someone that has a value. ​

Attorney-in-fact: Someone who is appointed to act as an agent for another under a Power of Attorney. ​

Beneficiary: One who benefits from the transfer of property. ​

Codicil: An addition to a Will that changes or replaces part of it. ​

Corporation: Company created by one or more persons based on state laws, owned by shareholders/stockholders, and owners have limited liability. ​

Decedent: Person who has died. ​

Descendant: Someone who descends from a common ancestor. ​

Durable: Type of Power of Attorney that allows it to remain in effect if the principal become incapacitated. ​

Estate: All the property owned by a person. ​

Executor: Person named by the Will to carry out its instructions. ​

Fiduciary: Someone who acts for the benefit of another with trust. ​

Guardian: Someone who has legal authority to care for a minor child or incapacitated person and their assets. ​

Health Care Agent: Someone who is appointed by a Health Care Proxy to make decisions related to healthcare and medical treatments for another who is not able to do so.

Heir: Anyone entitled inherit under the state laws of intestacy when the decedent dies without a Will.

Homestead: Home where owner primarily lives.​ ​

Incapacitated: State when someone can not care for oneself or perform certain tasks. ​

Joint Tenancy: Each tenant owns an equal share of the property and if one tenant passes away the other tenant(s) receives the share. ​

Limited Liability: State law that states the business owner/shareholder is not responsible for the business debts beyond the amount they invested in the business. ​

Net Worth: Value of all of a person’s assets minus his liabilities (what he owes). ​

Partnership: Agreement between two or more people to pool their assets/services to operate a business. ​

Personal Property: Everything a person owns with the exception of real estate. ​

Probate: Court procedure to determine if there is a valid Will and to transfer property. I keep hearing I don’t want this, but what is it? Usually want to avoid it because it is open to the public, takes a long time, and is quite costly. ​

Pro Bono: “For the public good.” Attorney working voluntarily without pay. ​

Revocable Living Trust: Entity created and made effective during a person’s life to hold assets and which can be amended or terminated. ​

Sole Proprietorship: Form of business in which one person owns all the assets and is personally liable for all the debts. ​

Specific Bequest: A gift of a specific item to a named beneficiary of the Will.

Tenancy by the Entirety: Way in which a husband and wife may own real estate so that if one passes away the spouse receives full ownership of the property.

Tenancy in Common: Form of ownership for two or more owners whereby if one passes away their heirs receive their share of the property. ​

Term Life Insurance Policy: Insurance on the life of a person whereby premiums are paid for certain period of time and if the person passes away during that time their beneficiaries receive the death benefit. ​

Trust Agreement: Document that creates an entity to hold assets and is managed by a Trustee for the named beneficiaries. ​

Trustee: Person or institution who cares for and manages property for the benefit of another.