The Unlawyer Glossary
We know legal terms can be confusing. Below you’ll find an alphabetized list of terms you may encounter in the planning process.
Administered as a whole
This means that the trust will not be broken up into separate pieces for each child until all children have reached a specific age, like 35.
Advance Directive for Health Care (ADHC)
An Advanced Directive for Health Care is a legal document that allows you to make decisions now about how you want to be treated if, in the future, you become terminally ill or injured or your become permanently unconscious. This is sometimes referred to as a “living will.” This document also allows you to appoint a trusted person to represent you if you can’t make health care decisions for yourself. This person is called a “health care proxy.”
Agent
The person who receives the power and authority to act under a power of attorney.
Apportionment/Apportion
To divide.
Artificially provided food and hydration
Artificially provided nutrition and hydration is food and water through a tube or an intravenous line (IV).
Beneficiary
In a trust, the persons and/or organizations who receive the trust income and eventually the assets after the death of the person who created the trust. Beneficiary (life Ins or retirement asset) the person who receives the benefit upon your death.
Bond or surety
The personal representative can request to be bonded. Being bonded gives you a level of insurance for your actions, assuming that you were not intentional or grossly negligent. It is important to note that if you are the personal representative of someone's estate, you have personal liability for your actions.
Bond
A bond is a fixed-interest debt security that represents a loan from the holder of the bond to the company or government entity that borrowed the money.
Commodity
An economic good or service such as grains (corn & soybeans for example), iron ore, crude oil, cotton and sugar, which often trade on the commodities markets.
Compensation
Your personal representative can be paid.
Court reports
This includes documents such as an inventory or appraisal of your assets or copies of any trust created within your will.
Deed of Trust
a deed wherein legal title in real property is transferred to a trustee, which holds it as security for a loan (debt) between a borrower and lender.
Devise
To give away or gift.
Devisee
Someone who receives a gift or inheritance of land.
Digital Assets
Digital assets are a very new phenomenon in the world of estate planning, and your will is designed to deal with that. The digital asset provisions in your will allow your personal representative to be able to deal with your online accounts, social media, Amazon, and other shopping and financial institutions with whom you that you have online accounts.
Disclaim Property
To turn down or reject property or to refuse to accept a gift or inheritance so it can go to the recipient who is next in line.
Disposing Memory
This refers to the mental ability to understand in general what one owns, one's family relationships, and the meaning and effect of the will at the time of making a will.
Execution
To sign and witness.
Executor
This is an older term, but means the same thing as the personal representative. Most states use this term.
Fiduciary
This is the person having the legal duty to act primarily for another’s benefit. Implies great confidence and trust, and a high degree of good faith. Usually associated with a trustee and a personal representative.
First Choice
Most people will name a spouse, parent, sibling, child or trusted friend as their first proxy.
Guardian
A guardian is typically a close relative or a trusted friend who will care for minor children in the event both parents die in a common accident.
Health, education, maintenance, and support
Trusts commonly provide that distributions may be made for the "reasonable maintenance, comfort and support" of the beneficiary. These are often part of the so-called "HEMS" standard -- "health, education, maintenance and support"
Health Care Proxy
This is the person you appoint to make medical or other decisions for you if you become too sick to speak for yourself.
Intestacy
Dying without a will.
Lawfully Enforceable Debts
Debts that the creditor has filed a proper claim against your estate in the court during the claims period, which begins on the day your personal representative is recognized by the court.
Life Sustaining Treatment
Life sustaining treatment includes drugs, machines, or medical procedures that would keep me alive but would not cure me.
Living Lineal Descendants
Children, grandchildren, great grand children, etc.
Living Will
Is a legal document that allows you to make decisions now about how you want to be treated if you become terminally ill or injured or your become permanently unconscious in the future.
Memorandum of disposition of personal property
This is a document you can write, which identifies specific items of personal property, like a set of tools or piece of jewelry, and the person who you want to receive that item.
Mortgage
is used either by purchasers of real property to raise funds to buy real estate, or alternatively by existing property owners to raise funds for any purpose, while putting a lien on the property being mortgaged.
Option
is a contract that gives a buyer (the holder of the option) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on a specified date, depending on the form of the option.
Partial Invalidity Provision
This is a provision in a document that states that if one part of the document is deemed to be invalid, it does not destroy the integrity of the entire document.
Power
Collect income from your assets. Examples include interest from a bank account or dividends from a stock.
Manage any claims people or businesses might make against your estate. Examples include credit card companies filing a claim to be paid for the outstanding balance on a credit card account.
Manage the assets in your estate or trust including keeping or selling parts or all of the assets in the estate. Examples could include selling your house to produce cash to support your children
Invest assets of the estate. Examples include investing cash from bank accounts to earn a higher rate of return.
Purchase property. Examples might include a trustee purchasing an automobile for a child.
Borrow money: Example might include the trustee acting as a co-signor on a loan for a child attempting to purchase a house.
Signing contracts: Example could be a purchase agreement for a house for a child.
Principal
The person giving the power and authority to act.
Real Property
Land and property that is permanently attached to land (like a building or a house).
Residuary Estate, or Residue
The rest of the estate is everything else that you own. This includes things like a house, bank accounts, investment accounts, business interests, etc. that has not been directed elsewhere in the will.
Second Choice
The second choice proxy is called to duty if the first choice is not able, not willing or unavailable to serve. As a second choice, most people will again name a parent, sibling, child or trusted friend, not selected as a first choice.
Security
a fungible, negotiable financial instrument that holds some type of monetary value.
Simultaneous Death
the presumption of who survives whom in the event of an accident where it is difficult to determine which of the two people died first.
Sound Mind
Having the capacity to think, reason, and understand for oneself.
Special Disability Provision
If one of your children is disabled or becomes disabled and qualifies for public assistance, like social security benefits, this provision allows the trustee to manage what distributions it makes to that child so they do not lose their public assistance benefits.
Spendthrift Provision
This provision prohibits the beneficiary of a trust from borrowing money against the trust assets or doing things like selling their interest in the trust It also protects the assets in a trust from the beneficiary’s creditors.
Tangible Personal Property
The things in life that you can literally pick up and move around. They could be household furnishings, automobiles, an aircraft, boats, jewelry, artwork. Personal property also includes cash that you may have on hand. It could even include gold coins or other types of collectibles, even stamps.
Terminally Ill or Terminally Injured
Terminally ill or injured is when your doctor and another doctor decide you have a disease or condition that cannot be cured and that you will likely die in the near future from this condition.
Testator
The person who writes a will.
Trust
A trust is a legal entity set up to hold and manage assets, like cash and stocks, while your children are too young to manage them on their own.
Trustee
the person or entity (like a trust department in a bank) who manages the money held in the trust for your children. The trustee has to follow the rules you set up about how to distribute money to your children, and those terms are set out in the will.
Undivided Interest
refers to the interest in property owned by tenants whereby each tenant has an equal right to enjoy the entire property.