Attorney-in-fact: A person named in a written power of attorney document to act on the behalf of the principal (the person who signs and authorizes the document). The attorney-in-fact's range of power and responsibilities are stipulated in the power of attorney document.

Benefactor: A person who gives money or other assets to a person, group or organization. These gifts are stipulated in the will of the benefactor.

Beneficiary: In the general sense, person or other legal entity who receives money or other benefits from a benefactor.

Decedent: A person who has died.

Devise: A gift made by a will or a trust. A devise is made to a beneficiary under the terms of the will or trust.

Domicile: A person's permanent legal place of residence. While a person may have more than one residence, he or she can have only one domicile. To clarify, usually, the domicile is the place you use for purposes of voter registration.

Durable Power: A power (usually, a power of attorney) that continues regardless of the mental incompetence of the principal. This relates to Power of Attorney and Attorney-in-Fact.

Durable Power of Attorney for Health Care: A document that grants a person, often referred to as a Health Care Agent, the legal authority to make health care decisions for another person, in the event that the latter is unable to make the decisions for him or herself.

Estate: The total of all assets, all debts and all other obligations of an individual. At the time of death, the total amount of benefits (life insurance, annuity and retirement benefits) to be distributed to beneficiaries are usuaklly also considered part of the estate for the purposes pf the Federal Estate Tax.

Executor (or the feminine, Executrix): A person or institution named in a will and appointed by a court to carry out the will's instructions and to manage the probate estate. The duties of the executor are considerable, including compiling an inventory of all property, paying all debts and expenses, and distributing the remaining estate to the beneficiaries.

Execution: The act of validly signing legal documents, such as a Power of Attorney, a Trust or a Will. This is often more complicated than simply signing the documents with the appropriate witnesses and an estate planning lawyer can help you understand what is needed.  

Exemption Credit: The amount of tax credit, which is some senses is like the personal income tax exemption, applied to the transfer tax due at a the time of a person's death. The exemption credit of $220,550 gives a person the ability to transfer a total of up to $675,000 of property (as of 2000-2001) from his or her estate both during his or her lifetime, as well as after death, without incurring a transfer tax. The estate tax exemption amount rose to $1 million in 2002-2003, $1.5 million in 2004-2005, $2 million in 2006--2008, and will rise to $3.5 million in 2009. The tax is then to be abolished in 2010, and then reinstated in 2011, unless Congress votes to make the abolishment permenant.

Family Limited Partnership: A legal partnership agreement between members of a family for the management and control of property for the benefit of family members. An estate planning lawyer can sometimes use this to minimize transfer taxes.

Federal Estate Taxes: Taxes imposed by the United States Government on the value of a person's estate upon his or her death. An estate planning lawyer can tell you how the current Federal Estate Tax will impact your estate, as well as what State Estate Taxes and Inheritence Taxes will be levied.

Fiduciary: A fiduciary has the legal duty to act in the best interest and benefit of another and is consequently held to the very highest legal standards. Because of this, when choosing a fiduciary, you should select someone in whom you have the utmost confidence in whom you can rely for his or her integrity, trust, and good faith. A trustee is an example of a fiduciary.

Future Interest: An interest in property that occurs in the future, after certain specified events have taken place. This is related to Remainderman.

Gain: The difference between the Tax Basis (the amount originally paid for property with certain adjustments) and the amount received for the property when it was sold. This value is used to determine the amount of capital gains tax due on the income from the sale.

Generation Skipping Transfer Tax (GST Tax): A 55% tax imposed on transfers of assets made during life or at death that skip a generation of family members. The GST tax also applies to transfers to non-family members 37.5 years younger than the person making the transfer. GST taxes apply when the totals of all gifts during lifetime or at death exceed the applicable estate tax exemptions in effect for the calendar year.

Grantor: The person who establishes the trust; also referred to as a Settlor, Trust Creator, Trust Maker, or Trustor.

Gross Estate: The total value of an estate before the debts are paid.

Guardian: The person responsible for the health, education, welfare, and general upbringing of a minor child.

Guardianship: A court-controlled program to manage the affairs of minor children.

Health Care Agent: Person designated to make health care decisions for an individual.

Holographic Will: A handwritten will. They are often poorly written and, on occasion, can be worse than having no Will at all.

Incapacity/Incompetent: Legally unable to manage one's own affairs due to some mental disability, be it temporary or permanent.

Informed Consent: An authorization to proceed with some course of action made by a person who has been given and understands all of the relevant facts. Informed consent is usually used with respect to medical decisions. If and only if the procedures to be used and all the associated risks and benefits of them have been fully explained in a manner than you understand, then you are in a position to give informed consent.

Inheritance Tax: A tax imposed by the state at the time of a person's death that is based upon the total value of the decedent's estate.

Inter-vivos: Made during one's lifetime, such as a living trust. Conversely, a testamentary trust is a trust that takes effect after you have died.

Interlineation: Literally, something written in-between. This is usually a change to a typed document made by crossing out words and entering in replacement words. This is probalematic and you should never change an executed will or trust by interlineation.

In-Terrorum Clause: A provision of a will or trust that disinherits a person in the event that he or she challenges the terms of the will or trust. This is also called a No-Contest Clause.

Intestate: Having died without a valid will or without providing legally binding instructions for the distribution of one's property after death.

Irrevocable: Something that cannot be altered in any way. An irrevocable trust is one that cannot be changed, canceled or revoked once it is established.

Issue: Refers to a person's descendents.

Joint Tenancy: Property owned by two or more people that upon the death of one of the joint owners, all of his or her interest in the property is transferred immediately, by operation of law, to the other surviving owners. If the joint tenancy exists between a husband and wife, it may be called a Tenancy-by-the-Entirety.

Judgment: An official court order regarding the rights or claims of the parties to a legal action or proceeding.

Living Trust (sometimes called an Inter-Vivos Trust): A written legal document, usuaully revocable, set in place during a person's lifetime into which he or she places property. The living trust contains instructions for management and distribution of the trust property during his or her lifetime and upon death or disability.

Living Will (also known as a Natural Death Declaration): A document that defines the circumstances under which health care professionals should withhold or remove artificial life support, or refrain from using heroic measures, if the person is unable to give informed consent due to incapacity.

Minor Child: A child under the legal age of adulthood; this varies from state to state. Unless other plans have been established in a will or trust, any property left to a minor child becomes his or her own property to use, to spend or to give away, once he or she reaches the age of majority.

Natural Death Declaration: A form of Living Will approved in some states, also known as Directive to Physicians.

Net-income Charitable Remainder Unitrust (NICRUT): There is no distribution to the donor until income is earned by the trust.

Net income with Makeup Charitable Remainder Unitrust (NIMCRUT): This is like a NICRUT, however, the income can be deferred by the donor, and credit can accumulate for the unpaid years to be redeemed when assets earn income.

Net Value: The value of an estate once all debts have been paid. Federal estate taxes are based on the net value of an estate not its gross value.

Notary Public: A person who has been authorized to administer oaths. Deeds and other legal documents require use of a Notary Public.

Ownership Interest: The legal right to manage, sell, or give away property.

Per Capita: A method by which a grantor can distribute his or her estate so that each of the surviving descendants will share equally, regardless of generation.

Personal Property: Movable property, including furniture, antiques, artwork, jewelery, automobiles, business equipment, cash and stocks.

Per Stirpes: A method of dividing an estate among one's surviving descendants. Each survivor receives only the amount that his or her immediate ancestor would have received if that ancestor had been alive at the time of the grantor's death.

Pooled-income Fund (PIF): These are funds from several donors that are pooled and invested by charity. Donors recieve tax deduction and annual income prorated. While PIFs escape CRFs cost and administration, there is some loss of control.

Post-Marital Agreement (also called a Post- Nuptial Agreement): An agreement entered into between a husband and wife that defines each spouse's respective rights to property.

Pour Over Will: A short will often used with a living trust that states that any property left out of the living trust will become part of (or "pour over" into) the trust upon death.

Power of Appointment: The legal authority to provide instructions. This is usually used when a person is given the authority to direct the ultimate distribution of property under the terms of another person's will or trust.

Power of Attorney: A legal document that gives another person, the attorney-in-fact, legal authority to act on the principal's behalf. This authority ceases upon the death of either the principal or the attorney-in-fact. However, a durable power of attorney remains valid through the principal's disability. If a power of attorney is unrestricted, it is called a general power of attorney. If there are restrictions, it is called a limited power of attorney, such as one for a very specific purpose (to sell a home, for instance). If the power only becomes effective upon certain conditions, it is considered a springing power of attorney.

Pre-Marital Agreement (Also called a Pre- Nuptial Agreement): An agreement entered into by a couple prior to their marriage that can define the respective legal rights and obligations to property, whether acquired before or after the marriage.

Principal: (1) A person who is the original source of authority, often used when the owner of property authorizes another person, through a power of attorney, to act in his/her stead. (2) Capital or original property as opposed to interest or other earnings derived from that property.

Probate: Probate refers to the legal process of settling the estate of a deceased person, and, more specifically, resolving any and all claims regarding the distribution of the property of the deceased. In states that recgonize the property of married couple's as community property, after a person has died without a valid will or trust, his or her property immediately becomes the property of the spouse, if any, without the need for probate.  However, in the event that the surviving spouse does not automatically succeed to the decedent's property, it is usually necessary to "probate the estate", whether the deceased had a valid will or not. A court having jurisdiction of the decedent's estate, usually called the "probate court," supervises probate, in order to ensure that the property of the deceased is distributed according to the direction of his or her will and according to the laws of the state.

Property: Anything that is owned or possessed. There are two types: Real and Personal.

Real Property: Land and property that is "permanently" attached to the land such as a house or barn.

Remainderman: A person who receives what is left, typically from a will or trust. Children and grandchildren are the most common remaindermen.

Revocable: Able to be altered.

Revocable Trust: A trust in which the person who created the trust keeps the authority to change, cancel, or revoke the trust during his or her lifetime provided that he or she remains competent.

Revocation: The act of terminating some that has been done. This is usually used in connection with the taking back of the authority granted under a power of attorney or the termination of an inter-vivos trust during a person's lifetime.

Separation: The act of taking apart. This is usually used when a married couple chooses to no longer intend to live as husband and wife.

Settlor: A person who the property that is placed into a trust. They are also referred to as a Grantor, Trust Creator, Trust Maker or Trustor.

Sole Ownership: Property that is owned by only one person.

Special Gift: An item of property, such as a home, a ring, antique, or a sum of money, that is specifically identified and earmarked in a will or trust to go to a particular person or charity, before any other distribution is made.

Spouse: A husband or wife.

Springing Power of Attorney: A power of attorney that becomes effective only after a specified occurence, such as if two physicians find that the principal is unable to manage his or her own affairs.

Stepped-up Basis: The revaluation of property upon a person's death for tax purposes.

Tenancy-in-Common: A form of ownership of property in which two or more persons share ownership in equal or unequal shares. Upon the death of a tenant-in-common, his or her share in the property transfers to his or her heirs, rather than to the other surviving owners.

Testamentary Trust: A trust established in a will that takes effect after death.

Testate: A person who dies with a valid will.

Transfer Tax: The combined Federal Estate and Gift tax. A single exemption credit applies whether the property was transferred during a person's lifetime (gift tax) or is held by a person at the time of his/her death (estate tax).

Transmute: The transfer of separate property to community property (or of community property to separate property).

Trust: A legal concept in which some or all property of a Trust Creator is held on behalf of a beneficiary (which may include the trust creator) in the name of the Trustee. This also refers to the legal document for the control, management and distribution of property. The rights of the beneficiaries, and the rights, powers and duties of the trustee, are established in the trust agreement. That is why it is so important that your trust be properly prepared. Speak to an estate planning lawyer for help in this matter.

Trustee: A person or institution responsible for the management and distribution of property held in a Trust. The trustee has the authority to act according to the instructions provided in the trust agreement. A Trustee is a Fiduciary.

Trust Maker or Trustor: A person who owns the property that is placed into a trust. This is also referred to as a Creator, Grantor or Settlor.

Will: A written document that gives instructions for disposing of a person's property upon the person's death. A will generally also names an executor or personal representative to handle the estate. A Will must be signed and (unless it is a holographic will) properly witnessed in order to be valid. Upon the person's death a will must go through the probate process in order to have the instructions carried out.