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Thirteen Estate Planning Terms You Need to Know

Posted by Kevin Martin | Oct 21, 2020 | 0 Comments

Assets

Generally, anything a person owns, including a home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, art, clothing, and collectibles.

Beneficiary

A person or entity (such as a charity) that receives a beneficial interest in something, such as an estate, trust, account, or insurance policy.

Distribution

A payment in cash or asset(s) to the beneficiary, individual, or entity who is entitled to receive it.

Estate

All assets and debts left by an individual at death.

Fiduciary

A person with a legal obligation (duty) to act primarily for another person's benefit, e.g., a trustee or agent under a power of attorney. “Fiduciary” implies great confidence and trust, and a high degree of good faith.

Funding

The process of transferring (re-titling) assets to a living trust. A living trust will only avoid probate at the trustmaker's death if it is fully funded, meaning it contains all of the decedent's assets.

Incapacitated/Incompetent

Unable to manage one's own affairs, either temporarily or permanently; often involves a lack of mental capacity.

Inheritance

The assets received from someone who has died.

Living probate

The court-supervised process of managing the assets of an incapacitated person.  Conservatorship is another term used for this process.

Marital deduction

A deduction on the federal estate tax return, it lets the first spouse to die leave an unlimited amount of assets to the surviving spouse free of estate taxes. However, if no other tax planning is used and the surviving spouse's estate is more than the amount of the federal estate tax exemption in effect at the time of the surviving spouse's death, estate taxes will be due at that time.

Settle an estate

The process of winding down the final affairs (valuation of assets, payment of debts and taxes, distribution of assets to beneficiaries) after someone dies.

Trust

A fiduciary relationship in which one party, known as the trustmaker or settlor, gives another party, known as the trustee, the right to hold property or assets for the benefit of another party, the beneficiary. The trust should be memorialized by a written trust agreement, outlining how the trust assets will be distributed to the beneficiary.

Will

A written document with instructions for disposing of assets after death. A will can only be enforced through a probate court. A will can also contain the nomination of guardian for minor children.

 If you have any additional questions about estate planning, or would like to consult an estate planning professional, please contact my office. I can make sure you have a comprehensive plan that is tailored to your unique needs and goals.

About the Author

Kevin Martin

Kevin Martin is an attorney who practices in Washington, D.C. and the State of Georgia. Kevin focuses his practice on wills, trusts and estate planning. Kevin deeply cares about his community and has an active pro bono practice. Prior to starting his law practice, Kevin served as a career Fore...

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