ESTATE SETTLEMENT - GLOSSARY OF TERMS
Administrator: The individual or institution appointed by the court to oversee the settlement of an estate of a person who has died without a will.
Alternative Date of Death: The executor or trustee of an estate has the option to appraise or value assets six months after the death of the decedent. Estate tax liabilities may be lower in the event that assets values have declined over this six month period.
Affidavit: The written declaration of facts made voluntarily under oath.
Ancillary Administration The Probate of the decedent’s property located in a different state than which the decedent lived.
Annual Exclusion: The amount of money or value of property (currently $12,000 for an individual and $24,000 for husband and wife) that can be given as a gift to a recipient each year without incurring gift tax.
Appraisal The process of determining the fair market value of property or asset within an estate.
Antecendants The ancestors of a person either alive or deceased such as; parents, grandparents, great-grandparents.
Beneficiary: An individual named in a will or trust document to receive money, property, principal or income from an estate or trust.
Bequest: A Gift of property given under the terms of a will.
Bond Money that backs a promise that an individual will perform a duty.
Capital Gains and Losses: A tax calculation, the difference between the purchase price (cost) and selling price
(proceeds).
Codicil: An addition or other change to an existing will.
Creditor An individual, business or entity which may be owed money by an estate.
Claim Against an Estate: Refers to a charge against an estate to settle an agreement or an outstanding obligation (as in the case of bills unpaid at the time of death).
Contest of a Will: Challenging the validity of a will, through a legal proceeding, to prevent the distribution of estate assets.
Date of, Death: The date the decedent dies.
Decendent: The person who died.
Death Taxes: Federal and state taxes that are due against property or the transfer of assets upon the death of the owner. Often referred to as estate taxes or inheritance taxes.
Deduction: For tax purposes, the portion of an estate that does not generate tax (such as the unlimited marital deduction).
Descendants: Any children or offspring living or deceased including grandchildren.
Domicile: The state and county that the decedents lived (primary residence).
Donee / Donor The recipient of a gift; the giver of a gift.
Executor: The individual or institution named in a will responsible for carrying out the provisions specified in a will. A co-executor serves as executor with one or more named individuals.
Fiduciary The individual or institution responsible for acting in the best interests of another party. Fiduciaries are
bound by law to put aside personal interests and act in good faith when making decisions for the benefit of another.
Grantor: An person who gives property outright or through a trust document.
Guardian: A individual or institution (trust company) determined by a court to manage the property of a individual who is judged incapable of handling his or her affairs.
Heir: A person who inherits funds or property from the estate of a person who has died.
Homestead: Property that is set aside for a specific family member that cannot be transferred to a third party.
Interested person: A person who may have a claim against a decedent’s estate or an interest in a distribution or outcome of an estate.
Intestate: The term for dying without a will. (See beneficiary statutory payout calculator for each state)
Inventory: A list of estate assets, values and liabilities.
Invasion: of a Trust Refers to a distribution of assets made from the principal of a trust.
Irrevocable Trust: A type of trust that cannot be revoked or changed in any way.
Joint Ownership: Also called joint tenancy, this phrase refers to ownership of property by two or more persons, generally
with right of survivorship (upon the death of one owner, the surviving owner or owners assume ownership).
Jurisdiction: The authority of a court to determines legal cases.
Last Will: Literally, the will last executed by an individual, which revokes any former existing wills.
Letters of Administration Documentation signed by the probate court giving a person authority to act on behalf of an
estate.
Living Trust: A trust that takes effect while the settlor is still alive.
Living Will :A legal document in which an individual states, in advance of final illness or injury, his or her wishes regarding
procedures and equipment designed to extend life.
Petition :Documents filed in probate court to request that an action be taken, such as a petition to open an estate for probate.
Power of Appointment: The power given by an individual to another in a will or trust document to determine which persons
will receive an interest in his or her estate.
Power of Attorney: A legal document authorizing one individual to act as the agent or "attorney" for another (the
"principal"). If the attorney is authorized to act on behalf of another for all matters, he or she has general power of attorney.
Authority: to act solely regarding specified situations is special power of attorney. If the authority granted extends
beyond the disability of the principal, the attorney has durable power of attorney.
Preference: The payment of certain types of creditors before other creditors.
Principal: Refers to the assets included in a trust that yield income. In an agency relationship, this word refers to the individual
who gives authority to the agent to act on his or her behalf. Principal also refers to an asset of an estate or trust
which is viewed separately from the income it may provide (as in principal and income accounting).
Probate: The process through which a will is proved to be valid and the legal procedure of settling an estate.
Pro rata: A portion of value based on percentage amount.
"Prudent Investor": Rule Legal term that refers to the duty of the fiduciary to invest and manage assets in the best interests
of another.
Real Property: Land and that which is attached to the land.
Remainderman: In the case of a trust, this term refers to the individual who will receive the principal of a trust when final
distribution takes place.
Revocable Trust: A type of trust that can be terminated by the settlor (the opposite of an irrevocable trust).
SS-4: The application form that is used to apply for a federal tax identification number with the IRS.
Settlor: An individual who establishes a trust in order to transfer property. (See Grantor)
Successor Trustee or Executor: An individual or institution taking the place of a trustee or executor unable to continue
the responsibilities designated in the trust agreement or will.
Summary Administration: A simplified probate proceeding for an estate valued at less than a stipulated amount (see
state statues) and holds no real property.
Testamentary Trust: A type of trust that is established under the will of a deceased individual.
Testate: Making and leaving a valid will; an individual who dies without having made a will is said to have died intestate.
Title: Legal ownership of property.
Trust: A legal, fiduciary relationship in which an individual or institution (the trustee) holds legal title to property with
the responsibility for keeping or managing this property for the benefit of another person or beneficiary.
Trust Agreement: A legal document that establishes a trust and outlines the rules and guidelines affecting its management
and disposition.
Trust Fund: Property held in trust. This term originally applied only to money held in trust, but is frequently used when
referring to all property held in trust.
Trustee: The individual or institution with responsibility for management of property placed in trust for the benefit of another
individual.
Unified Credit: A federal tax credit that offsets gift and estate-tax liability.
Will A legal document expressing the wishes of an individual regarding distribution of his or her property after death.
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