Glossary

Beneficiary: a generic term that usually refers to a person or entity that is entitled to receive something, for example, a beneficiary of an estate or trust, or a beneficiary of life insurance or retirement benefits.

Bequest: property given as a gift under the terms of a will.

Conservator: an adult person or financial institution appointed by a court, who is responsible for a minor child's or legally incapacitated person’s property until that minor child becomes an adult or the legally incapacitated person becomes competent to be responsible for his or her own property.

Domicile: one's home or permanent residence. The laws of the state of a person's domicile determine what happens to that person's property at death.

Donee/Donor: the recipient of a gift; the giver of a gift.

Estate: this word has a number of meanings depending on the context in which it is used. For federal estate tax purposes, it refers to all of a deceased person's assets that are included in that person's estate for tax purposes (usually everything). It is also used to refer to those items of property that are subject to administration in the probate court. For example, life insurance owned by the decedent and payable to a named beneficiary such as a surviving spouse is not part of the deceased person’s estate that is subject to administration in the probate court, but it is included in the deceased person’s estate for federal estate tax purposes.

Estate Planning: the process of arranging one's personal and financial affairs, including an overall strategy that coordinates the disposition of everything you own -- house, bank accounts, investment portfolios, life insurance and retirement plans.

Executor: the person or financial institution that is appointed to administer the estate of a deceased person who died with a will. The Executor is often referred to as the "personal representative."

Gift Tax Annual Exclusion: the first $11,000 in gifts that an individual can give tax free to another during a calendar year.

Grantor: in a trust context, this refers to a person that established a living trust. It is also used to refer to one who is transferring real estate in a deed.

Guardian: an adult person appointed by a surviving parent in his or her will or by a court, who is responsible for a minor child or legally incapacitated person's personal care and nurturing.

Heir: person, who inherits property from the estate of a deceased person who died.

Intestate: refers to dying without a will.

Irrevocable Trust: a trust that can no longer be amended or revoked by anyone. Most revocable trusts become irrevocable at some time, for example, when the person who established the trust dies.

Joint Ownership: also called joint tenancy, this phrase refers to ownership of property by two or more persons, generally with right of survivorship (upon the death of one owner, the surviving owner or owners assume ownership).

Living Trust: a trust that one establishes during one's lifetime which is not part of one's will, but is usually established by a separate written trust agreement. The same as "inter vivos trust." This type of document is also sometimes referred to as a revocable living trust.

Living Will: a legal document in which an individual states, in advance of final illness or injury, his or her wishes regarding procedures and equipment designed to extend life.

Power of Attorney: a legal document authorizing one individual to act as the agent or "attorney" for another (the "principal"). If the attorney is authorized to act in behalf of another for all matters, he or she has general power of attorney. Authority to act solely regarding specified situations is special power of attorney. If the authority granted extends beyond the disability of the principal, the attorney has durable power of attorney.

Principal: refers to the assets included in a trust that yield income. In an agency relationship, this word refers to the individual who gives authority to the agent to act on his or her behalf.

Probate: the process of determining if the deceased person left a valid will and admitting that will to probate. When a person dies, either with or without a will, that person’s estate will pass through probate proceedings. In California, there are different probate proceedings, depending on the value of the deceased’s estate and marital status prior to death.

"Prudent Investor" Rule: legal term that refers to the duty of the fiduciary to invest and manage assets in the best interests of another.

Revocable Living Trust: a living trust or inter vivos trust that can be amended and revoked, usually by the person who established the trust. This trust may become irrevocable and unamendable when the only person who can amend or revoke the trust dies or becomes incompetent.

Settlor: a person who established a living trust.

Testate: refers to dying with a will.

Testator: a person who makes a will.

Title: Legal ownership of property.

Trust: an arrangement, usually established by a written document, to provide for the management and disposition of assets. It normally involves three parties: the person who establishes the trust (sometimes called a donor, grantor, settlor, or trustor), a trustee, and one or more beneficiaries.

Trustee: an adult individual or financial institution that is designated to be responsible for the administration of a trust. There may be more than one trustee (co-trustees), and an individual and a financial institution may serve as co-trustees.

Trustor: see Settlor.

Trust Fund/Corpus: property held in trust. This term originally applied only to money held in trust, but is frequently used when referring to all property held in trust.

Will: a written document which disposes of one's property at death. The will also is used to nominate personal representatives. It may also be used to express burial and funeral instructions, make anatomical gifts, and designate a guardian and conservator for a minor child or an legally incapacitated adult.