Legal Term Definitions

Below you will find commonly used legal terms with their definitions in plain English:

ATTORNEY IN FACT
This is the name given to the person who you appoint to act for you in a Power of Attorney document. This person is also sometimes called your Agent.

BENEFICIARY
This term is generally used to refer to the person who will inherit assets from you upon your death. It is specifically used to name the person for whose benefit a Trust is created.

CONTESTING A WILL OR TRUST
This refers to the process unhappy beneficiaries of a Will or Trust use to redefine or change the wording used in a document, or to make the entire document null and void, meaning the document would not be used to distribute a person’s estate.

DEVISEE
A person who receives a gift of real property from you by way of your Will or Trust or other distribution of your estate.

ESTATE
Everything that you own. It can include your home, the contents found in your home, your automobiles, money in the bank, retirement plans, real estate, etc.

ESTATE TAX
The Estate Tax is assessed by both the Federal and State governments against the value of your estate when you die. This tax is separate and in addition to the Federal and State income tax.

GUARDIAN/ CONSERVATOR
A person who is appointed and supervised by a Judge to take care of and manage the property, health and safety of a mentally disabled individual.

HEIRS
The individuals and/or organizations named by you to receive your Estate upon your death. Your heirs are commonly named in your Trust or Will.

INTESTATE
When a person dies without creating their own estate plan, they are said to have died “Intestate.” This results in their Estate being distributed using the directions contained in their State Intestate Statutes.

GRANTOR
In the estate planning context, this is the person who creates a Trust or makes a gift. This term is used interchangeably with the words “Trustor” and “Settlor” depending upon the State you live in. In the real estate context, this term refers to the person who conveys real property to another person.

GRANTEE
The person who receives a conveyance of real property.

IRREVOCABLE
In the context of a Trust, it means that the trust cannot be changed, modified or terminated by anyone, even the person who created the Trust.

JOINT TENANCY
When property is owned by two or more owners as “Joint Tenants with right of survivorship,” upon the death of one of the owners, the deceased owner’s interest in the property is automatically split between the surviving owners of the property. Joint Tenancy also requires that all owners agree in writing before the property can be sold or transferred.

LEGATEE
A person who receives a gift of personal property from your Estate by means of your Will or Trust or other distribution of your Estate.

MEDICAID
A State-administered program of health care coverage for people with low income and minimal assets. It is paid for by the Federal Government.

MEDICARE
A form of public health care insurance that is available and free to all people over the age of 65 no matter what their level of income or financial assets.

MEMORANDUM OF TRUST
A document which gives evidence that a Trust has been created. It gives banks and other interested institutions and people the names of your Trustees and Successor Trustees. It gives the outside world around you the information they need, while it keeps the rest of your Trust information private. It can be recorded and is sometimes called a Certificate of Trust.

NO CONTEST CLAUSE
Language placed in a Will or Trust stating that if a Beneficiary goes to Court to Contest or challenge the Will or Trust and loses, that Beneficiary will lose the entire inheritance they would otherwise receive from the Will or Trust.

PERSONAL REPRESENTATIVE
A person appointed by the Court to administer your Estate after your death. This person often is named in your Will. However, if you do not have a Will, or if the person your Will names is unable to serve, the Court will appoint a family member or other trusted member of your community to serve as your Personal Representative. This person is also sometimes called your Executor or Administrator.

PER STIRPES
A method of distributing property from your Estate. It means that should one of your Heirs die before you, the Heirs of that deceased Heir take the share intended for the deceased Heir. As an example, if you left one-half of your Estate to your son and your son died before you leaving two children, then your two grandchildren would divide his share, each receiving one-fourth of your Estate. It is a Latin word which literally means "by roots".

PROBATE
A public proceeding presided over by a Judge who distributes your Estate following the directions found in your Will or the State Intestate Statutes if you do not have a Will. Probate has many requirements that generally take about a year to complete before your Estate can be distributed to your Beneficiaries. The word “Probate” is a Latin word that means “prove the Will.”

REVOCABLE
In the context of a Trust, it means the Trust can be changed, modified or amended anytime by the person who created the trust. A Revocable Trust becomes Irrevocable upon the death or incapacity of the person who created the Trust.

RULE AGAINST PERPETUITIES
An ancient rule of law, still valid today, which states that if you create a trust today, it must terminate no later than the date of death of your latest living heir, plus 21 years.

TESTATOR
A male person who creates a Last Will and Testament.

TESTATRIX
A female person who creates a Last Will and Testament.

TRUST ESTATE
All of the property placed in a Trust. It is also sometimes called the Corpus or the Principal of the trust.

TRUSTEE
The person (sometimes a Bank) who controls and manages a Trust following the directions contained in the Trust Document. The person who creates the Trust is generally the Trustee until he or she dies or becomes incapacitated. At that time, the Successor Trustee (who is usually a family member) will control and manage the assets in the Trust.

SETTLOR
The person or persons who create a Trust. The Settlor is also sometimes called a Grantor or Trustor.

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