Estate Planning Vocabulary
Do you speak legalese? Whether you do or you don’t, you’ll be happy to know that English is still the preferred language of American attorneys. Communication is key when it comes to estate planning, so if your attorney isn’t willing to explain unfamiliar terms to you and speak in clear language, it’s time to find a new attorney! However, if you want to get a head start and impress your attorney with your knowledge of basic estate planning vocabulary, we’ve compiled a list of useful terms for you to know. Read through these terms and definitions, study them, and bookmark this page for quick access. You don’t need to understand legalese to create a thorough and effective estate plan; you just need to find the right attorney!
Estate Planning Vocabulary
Beneficiary: a person or institution who benefits from the creation of a trust, will, retirement plan, and/or an insurance policy, etc. Contingency: a future event that may occur. Also, a provision for an unforeseen event. Decedent: a deceased person. Irrevocable and Revocable Trusts: an irrevocable trust cannot be changed or terminated without the approval of everyone involved (this includes the beneficiaries). Revocable trusts, on the other hand, can be altered, rewritten, or revoked by the person who created the trust at any time. Last Will and Testament: a legal document in which a person communicates their final wishes. It might include how the testator would like their property to be distributed after their death (there are better ways and less expensive ways to distribute one’s property than under a Last Will and Testament), who they would like to take responsibility for their dependents (Guardians), instructions for their funeral arrangements, and permission for their body to be used for medical research, amongst other important directives. Living Will: a legal document in which a person states what they would like to happen (or not happen) if they become incapacitated and are not able to communicate their wishes concerning their health care. Power of Attorney: a document in which one person gives another person the power to make decisions and do certain things (specified legal, financial, and medical matters) on his or her behalf. Probate: the legal process in which a deceased person’s estate is settled. This includes validating the will (if there is a will), paying debts, and distributing assets. The process can be lengthy and expensive, so many people try to avoid probate if possible. Probate is also involved if you become disabled and/or incapacitated and have not made plans on who would care for your person and your assets. Testator: a person who creates a will. Trust: an agreement that states how a person would like to manage and distribute their property during their lifetime and after their death. Trustee: a person who holds the title to the property in their fiduciary capacity of a trust and manages it according to the terms of the trust agreement. Trustmaker (also, Grantor, Settlor, and Trustor): a person who creates a trust.
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Now that you have some basic estate planning vocabulary under your belt, you should feel more confident heading in to meet your attorney for the first time. If he or she does mention terms that you’re unfamiliar with, don’t be afraid to ask questions! Your attorney should be more than happy to answer your questions, explain the process in more detail, and clear up any lingering doubts you might have. Do you need help creating or updating your estate plan? If you live in southwest Missouri, contact the attorneys at LifeGen Law Group. We would be happy to help. Give us a call at 417-823-9898 or click here to schedule a free consultation.