Many individuals put off estate planning and are afraid to seek a consultation with a lawyer because they don’t understand the vocabulary of estate planning.
Estate Planning Vocabulary
Many individuals put off estate planning and are afraid to seek a consultation with a lawyer because they don’t understand the vocabulary of estate planning. It is unfortunate. Most qualified lawyers are happy to help in the educational and planning process at the same time.
If you are an individual who is concerned about gaining the vocabulary or knowledge first, or if you want to be certain that you understand an existing plan by now learning the vocabulary, then this article is a good start for you.
“Administration,” “Administrator” and “Administratrix” are terms used to describe the process of a court assisting or supervising in the probate process when there is no Will. An Administrator or Administratrix is simply the person appointed by the court to handle the estate. A generic term for both Administrator or Administratrix is “Personal Representative.”
“Beneficiaries” are individuals and/or organizations that you designate to receive assets or benefit after your death. For example, Beneficiary designations are available on policies of life insurance. Likewise, in a Will, you list the Beneficiaries of your estate.
A “Codicil” is a written change or amendment to a Will. Thus, if you have a very simple change to an existing Will, then a Codicil may be appropriate to make that change without executing an entire new Will.
“Durable Power” for asset management and/or health care. A “Durable Power” is a power that you give to another individual so that they will have authority to make financial decisions for you, or medical decisions for you. If it is a “Durable Power,” then it continues after you become incapacitated and ends only at death.
An “Executor” or “Executrix” is the person nominated in a Will and appointed by the probate court in order to handle the estate. Just as with Administrator or Administratrix, the generic term for an Executor or Executrix is “Personal Representative.”
A “Fiduciary” is a person who has a duty to act for someone else’s benefit. Thus, Trustees have a Fiduciary duty to act on behalf of the Beneficiaries of the Trust. An individual named in a Power of Attorney has a Fiduciary duty to act on behalf of the individual who gave them the power.
A “Grantor” is a person who creates a Trust. This term is interchangeable with “creator,” “settlor,” “trustor” and a few other terms.
An “Heir” is a person who receives a portion of your estate. This term is often used interchangeably with “Beneficiary.”
An “Intervevos” Trust is a Trust that you create during your lifetime.
A “Living” Trust is a type of Trust that you create during your lifetime. Typically, it is used for managing assets during your lifetime as well as for distribution of the same assets after you die.
“Minor” Indiana law provides different ages of adulthood depending on the circumstances. For example, a “Minor” for inheritance purposes is someone under the age of 18.
“Probate” or “Probate Estate” is essentially the process of filing the Will with the court and having it validated. If a Probate Estate is “supervised,” then the court will provide some oversight or supervision of the Personal Representative.
Do not let a lack of understanding prevent you from creating an estate plan. Qualified attorneys at Altman, Poindexter & Wyatt LLC are happy to assist and explain the vocabulary unique to this area of the law.
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