Glossary of Common Trustee and Estate Terms

Glossary of Common Trustee and Estate Terms

Navigating the world of trusts and estates can be challenging, especially with the abundance of legal and financial terminology. This glossary aims to demystify common terms you might encounter as a trustee or when dealing with estate matters.

A

• Appraisal: A professional estimation of the value of an asset or property.
• Assets: Any property or resources with economic value owned by an individual or entity.

B

• Beneficiary: A person or entity designated to receive benefits from a trust, will, or insurance policy.
• Bequest: A gift of personal property or assets made in a will.

C

• Codicil: A legal document that modifies an existing will.
• Corpus: The principal or body of a trust, including all property and assets.

D

• Decedent: A person who has died.
• Discretionary Trust: A trust that gives the trustee discretion over distributions to beneficiaries.

E

• Estate: The total of all possessions owned by an individual at death.
• Executor: The person named in a will to manage the estate and carry out the decedent's wishes.

F

• Fiduciary: A person or entity with a legal obligation to act in the best interest of another.
• Funding a Trust: The process of transferring assets into a trust.

G

• Grantor: The person who creates a trust, also known as the settlor or trustor.
• Guardian: A person appointed to manage the affairs of a minor or incapacitated individual.

H

• Heir: A person entitled to inherit property from a deceased individual.
• Holographic Will: A handwritten will, often not witnessed, which may or may not be valid depending on jurisdiction.

I

• Intestate: Dying without a valid will in place.
• Irrevocable Trust: A trust that cannot be modified or terminated without the beneficiary's permission.

L

• Legacy: A gift of personal property or money to a beneficiary through a will.
• Living Trust: A trust created during the grantor's lifetime, also known as an inter vivos trust.

P

• Power of Attorney: Legal authorization for someone to act on another's behalf in private affairs, business, or legal matters.
• Probate: The legal process of administering a deceased person's estate.

R

• Residuary Estate: The portion of an estate left after all specific bequests and debts have been paid.
• Revocable Trust: A trust that can be altered or canceled by the grantor during their lifetime.

S

• Settlor: Another term for the grantor or creator of a trust.
• Spendthrift Clause: A provision in a trust that prevents beneficiaries from transferring their interests to others.

T

• Testamentary Trust: A trust created by a will that takes effect after the grantor's death.
• Trustee: The person or entity responsible for managing a trust's assets and carrying out its terms.

U

• Unified Tax Credit: A tax credit that reduces the amount of federal estate tax owed.
• Undue Influence: Improper pressure exerted on a person to change their will or trust.

V

• Vested Interest: A beneficiary's right to trust property that is not contingent on any future event.
• Valuation: The process of determining the current worth of an asset or company.

W

• Will: A legal document that specifies how a person's property should be distributed after death.
• Witness: A person who observes the signing of a legal document and can attest to its authenticity.

Understanding these terms can greatly assist in navigating the complexities of trust and estate management. Remember, while this glossary provides a general overview, legal and financial terms can have nuanced meanings depending on the context and jurisdiction. When in doubt, always consult with a legal or financial professional for clarification.

‍