Useful Terms
Abstract of Title:
A concise history of the title to land.
Administrator:
A person selected by the Court to administer the estate of a person who dies without a will.
Administrator with the Will Annexed:
A person selected by the Court to carry out the duties of the executor when none is named in the will or the person named is not qualified or refuses to act.
Applicable Exclusion Amount and Unified Credit Exemption Equivalent:
The “Applicable Exclusion Amount,” defined in 2010(c) of the Internal Revenue Code of 1986, as amended (the “Code”), is the federal basic exclusion amount for estate, gift, and generation skipping transfer tax purposes and is currently $15,000,000.00. The basic exclusion amount represents the total amount of property that an individual may pass to anyone, through lifetime gifting and upon his or her death, without the imposition of a federal estate, gift or generation skipping transfer tax. The concept of portability allows the surviving spouse of a decedent to use the unused exclusion amount of the first spouse to die in addition to the surviving spouse’s own basic exclusion amount for gift or estate (but not generation skipping transfer) tax, referred to as the “Unified Credit Exemption Equivalent.” Married couples can limit the imposition of taxes on the surviving spouse’s estate by combining the applicable exclusion amount and portability to transfer a total estate of up to $30,000,000.00. The Trustee of your trust is instructed to make transfers to both the Survivor’s Trust and Family Trust as needed for the purpose of limiting the imposition of taxes on the estate of the surviving spouse at his or her death. Thus, a majority of estates will still pass free of estate tax. Under the One Big Beautiful Bill Act (“Act”), this new exemption amount is now “permanent” but will continue to be indexed annually to inflation. Unlike prior legislation that had increased exemption amounts, the Act includes no sunset provisions, meaning that there is no need to rush to take advantage of the new, higher amount. However, any provision of the Act could be amended or repealed at any time in the future.
Ancillary Administration:
Probate or administration in a state where the decedent has property but dies a resident of another state.
Attorney-In-Fact:
A private attorney is authorized by a person to act in his or her place, either for some particular purpose, as to do the particular act, or for the transaction of business in general, not as a legal character. The authority is conferred by an instrument in writing, more commonly, a “power of attorney.” The term is used to designate persons who act under a special agency or a special letter of attorney so that they are appointed in factum for the deed or special act to be performed. In a broader sense, it includes all other agents employed in any business, or who acts “in pais” (without a legal proceeding) for another.
Bequest:
A gift of personal property identified in a will.
Beneficiary:
A person (or persons) for whose benefit a trust is created. A beneficiary receives distributions of assets from the trust. Usually, the beneficiaries are the surviving spouse, children, and/or grandchildren of the person making the trust.
Bylaws:
Self-enacted rules governing an organization or business.
Codicil:
A supplement or addition to a will and must be executed with the same formalities of a will.
Community Spouse:
A term used in federal and state law to indicate the husband or wife who continues to live at home when the other spouse is confined to a nursing home. The person in the nursing home is referred to as the “Institutionalized Spouse.” These are both special terms used when applying for Medicaid or government assistance for payment of nursing home care.
Corporation:
A company or association chartered to act as an individual.
Defendant:
The person who defends a court action.
Devise:
A gift of land in a will.
Easement:
A right to use land of another for a special purpose.
Executor, male – Executrix, female:
A person named in a will to carry out the requests and directions in the will and who selects the attorney to probate the will.
Foreclosure:
To bar or shut out; to take away the right of a mortgagor to redeem.
Guardian:
One who is appointed by law to be responsible for the care of a child or incompetent person.
Heir:
Incapacitated Person:
A person who is unable to take care of his or her personal and business affairs due to physical illness or disability, chemical dependency or mental illness or retardation.
Incompetent Person:
Intestate:
Having made no will; a person who dies without making a will.
Intestate Succession:
Irrevocable:
Never to be revoked, annulled, or withdrawn; unalterable. The Settlor cannot change, modify (i.e. “amend”) or revoke the trust, except under certain circumstances. A trust often becomes irrevocable upon the death of the Settlor or the surviving spouse if it is a joint trust.
Irrevocable Trust:
The Settlor cannot change, modify (i.e. “amend”) or revoke the trust, except under certain circumstances. A trust often becomes irrevocable upon the death of the Settlor or the surviving spouse if it is a joint trust.
Joint Tenancy:
When two or more persons own land with equal rights in all to share in its use during their lives. Generally, if property is owned in joint tenancy at the death of one owner, the title vests in the survivor, which avoids probate.
Lease:
A contract to rent.
Legatee:
An heir to a bequest. A person who inherits personal property through a will.
Lessee:
One to whom a lease is given the person leasing.
Lessor:
One who grants a lease.
Letters Testamentary:
Lineal Descendant:
A person who is descended from another person. For example, a child, a grandchild, and a great–grandchild would be “lineal descendants” of the person making the trust. In our trusts, an adopted descendant is considered to be a lineal descendant; however, a stepchild is not a lineal descendant. In a revocable living trust, “issue” is often used interchangeably with the term lineal descendant and has the same meaning.
Living Trust:
A type of revocable trust created by a person who owns the property to be transferred to the trust and is intended to be used primarily or exclusively for his or her own benefit during their lifetime. The trust contains provisions both for the management of the trust property during the Settlor’s lifetime and for the disposition of the trust property upon the Settlor’s death. In other words, a Settlor uses a trust to hold title to property during the Settlor’s lifetime and to distribute the property to the beneficiaries named in the trust upon the Settlor’s death, which avoids probate.
Mortgage:
Note (Promissory Note):
Personal Representative:
The executor or administrator of a deceased person’s estate. An executor is named in the will to distribute property and to carry out directions according to the instructions contained in the will. The Court appoints an administrator to manage the estate of a deceased person who dies without a will. “Personal Representative” is a fairly new term that is now used to refer to either the administrator or the executor of a deceased person’s estate.
Per Stirpes:
A Latin phrase that translates literally to “by roots” or “by branch” and is used as a legal term meaning “equally by right of representation” with respect to a distribution from a trust. A distribution “per stirpes” means that a beneficiary’s share passes to their lineal descendants if that beneficiary dies before the Settlor. For example, A has three children: B, C and D. B has two children: E and F. Consider if B dies before A: Upon A’s death, A’s children (B, C and D) would collectively obtain the interest of A “equally by right of representation” so that each of the three children would receive a one-third interest from A. Since B died leaving two living children, B’s one-third interest would go equally to B’s two children (E and F), who would each receive one-sixth of A’s interest (one-half of B’s one-third interest) “equally by right of representation” or “per stirpes.”
Petition:
Plaintiff:
The person who brings a court action.
Pour Over Will:
A will that distributes all of the deceased person’s assets to the trust rather than to beneficiaries named in the will, which avoids probate. However, if the person making the trust fails to transfer all of his or her assets into the trust before death and the asset does not have a designated beneficiary, the will must be probated and “pours over” those assets into the trust as part of the probate estate so they can then be distributed according to the terms of the trust. It acts like an insurance policy that we never plan to use, but it is available if needed.
Power of Attorney:
A document appointing another person to act as one’s “Agent.” The person giving the Agent the authority to act is known as the “Principal.” The Agent is often a spouse, child, or family member of the Principal and can transact any personal or business affairs on behalf of the Principal as authorized in the Power of Attorney. The Principal can continue to act even though a Power of Attorney has been given to their Agent and may revoke or change it at any time. A Durable Power of Attorney continues to be effective even if the Principal becomes disabled or incapacitated.
Probate:
Quiet Title
Quit Claim Deed:
A deed of conveyance operating by way of release. It is intended to pass any title, claim, or interest which the Settlor may have in the premises, but not professing that such title is valid, nor containing any warranty or covenants of title.
Release:
Remaining Trustee:
The person still serving when there are two Trustees and one of them dies, becomes disabled, is removed, or resigns.
Residuary:
Revocable:
To make void something that had previously been permitted; a recall; a repudiation. The Settlor may change, modify (i.e., “amend”) or revoke all or part of the trust before his or her incapacity, incompetency, or death.
Revocable Trust:
The Settlor may change, modify (i.e., “amend”) or revoke all or part of the trust before his or her incapacity, incompetency, or death.
Settlor:
The person who sets up, creates, or establishes the trust. Generally, our clients are both the Settlor and the Trustee in their revocable living trust. There can be more than one Settlor.
Shareholder:
One who holds or owns shares in a joint fund; The holder of shares in a corporation.
Successor Trustee:
The person who will take over and carry out the terms of the trust upon the death, disability, removal, or resignation of the original or previous Trustee.
Summons:
A process served upon a defendant for the purpose of securing his or her presence in the action; usually notifying him or her that he or she must appear within a specified time or judgment by default will be taken against them.
Tenancy:
Tenancy in Common:
Tenants who hold the same land together by several and district titles, but by unity of possession, because no one knows his severalty, and therefore they all occupy promiscuously. Where two or more hold the same land, with interests accruing under different titles, or accruing under the same title, but at different periods, or conferred by words of limitation importing that the grantees are to take district shares.
Tenant:
A person who possesses lands by any kind of title; One who has temporary occupancy of real property owned by another under terms of the lease. Tenancy shares.
Testamentary Trust:
A trust created in a will by the Settlor’s will, called the Testator if male and Testatrix if female, effective upon his or her death of the Settlor.
Testate:
A person who dies leaving a will.
Trust:
A fiduciary relationship in which one person holds the title of property for the benefit of another. A Trust Agreement is a document created by the Settlor establishing and governing such a relationship between the Trustee and the Beneficiary.
Trustee:
The person who is appointed or named by the Settlors to carry out the terms of the trust. Generally, our clients are both the Settlor and the Trustee of their revocable living trust. There can be more than one Trustee.