Glossary of will creation terms

How To

Understanding The Terms When Creating A Will

Jul-08 2021

Glossary of Terms for Creating a Will

Appraisal - A professional who estimated the value of an asset.

Assets - Assets include everything a person owns, from bank accounts to life insurance.

Beneficiary - A person who receives benefits from a will, trust or insurance in the form of money or any kind of other asset.

Certificate of Trust - An official document that states a person (Trustor) has developed a trust for themselves and all of their assets.

Common Trust - Similar to a normal trust, a common trust is a joint trust that is developed by two or more people (usually married couples). 

Custodian - An appointed guardian that manages the assets of a minor (under the age of 18)  after they receive benefits from a trust.

Durable Power of Attorney - Gives the attorney the power to manage your assets if you become unable to think for yourself. This power lasts as long as the client is incapacitated, and ends once the person has passed away.

Estate - All the assets including property, money and also debt owned by a person at the time of their death.

Estate Planning - Developing a plan for assets and important documents, as well as a will, trust, funeral and medical directive in case of a person's death.

Executor - A person appointed in a will that takes care of the distribution of all of their assets and debts as well as wishes.

Gift - A transfer to an individual or organization without any compensation in return.

Grantor - Also known as trustmaker: the person who creates the trust.

Guardianship - A person appointed by the parent as a guardian to take responsibility for any minor children of the passed person.

Irrevocable Trust - A type of trust that can not be changed or revoked while the grantor/trustmaker is still alive.

Joint Ownership - An ownership where two or more people possess an asset.

Non-contestant clause - Clause in a will or trust with the purpose of discouraging beneficiaries from contesting the will. The clause usually threatens to disinherit the beneficiaries from the will if they contest it.

Per Capita - A distribution method in estate planning; if the assets in the will are distributed per capita, every individual in one defined group (e.g. generation, family) receives an equal share.

Primary Beneficiary - The primary beneficiary is an individual or organization that is naturally first in line to receive benefits in a will, trust, life insurance, etc in case of death.

Pour-Over Will - A legal document that ensures a person's remaining assets will automatically transfer to a previously established trust upon their death.

Residual Trust Property - Is applied when there are left over assets that are not distributed in the will. In that case, the court decides who will receive the benefits following the law of intestacy.

Residuary Distribution - The distribution of any assets that are not assigned to any individual in the will. 

Revocable Trust - A trust that can be revoked or changed during the life of the trustmaker or grantor. 

Secondary Beneficiary - A person who receives assets or benefits from a trust only under a certain circumstance that was specified in the will, for example if the primary beneficiary has passed. 

Successor  - Alternate individual named in a Will or Trust that becomes the executor or trustee in the event that the initial person fails or refuses to act in such capacity. 

Successor Trustees - See Successor.

Tertiary Beneficiary - The Individual specifically designated to receive the assets from a will where both the primary beneficiary and the secondary beneficiary are also deceased at the time of the grantor's death.

Trust - A trust is a legal document that allows a third party, or trustee, to hold assets on behalf of  beneficiaries. Trusts can be arranged in many ways and are often connected to a will that specifies the distribution.  

Will - Legal document that contains a person's wishes and directions regarding the distribution of assets, properties and legacy.

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