Common Terms and Definitions
Estate Planning and Probate Administration are two areas of law that have a significant amount of terms and definitions. Here are some of the most common terms:
Will/Last Will and Testament: A legal document that expresses a person's wishes as to how their property is to be distributed after their death and nominates a person to manage the property until the final distribution.
"Pour Over" Will: A Will that leaves all assets in the Testator's name to a previously created Trust. It is a "catch all" document that allows anything that was not titled in the name of the Trust prior to the death of the Testator/Grantor to be included in the Trust assets and governed by the Trust instructions. The assets will still have to go through the probate administration process, however, in order to placed in the Trust.
Testator: A person who creates a Will/Last Will and Testament
Decedent: A person who has passed away.
Executor: A person or entity (such a a bank or other financial institution) that is nominated within a Will to serve as the manager of a decedent's probate estate once approved by the Probate Court.
Administrator: A person or entity (such as a bank or other financial institution) that is approved to manage a decedent's probate estate by the Probate Court when there is no Will.
Probate: The process by which a Will is proved be authentic, properly created in accordance with State rules, and signed while the Testator had the necessary mental capacity to fully understand his/her actions.
Trust: An estate planning tool in which a Grantor/Settlor entitles another party, the trustee, to hold title to property or assets owned by the grantor/settlor for the benefit of a third party, the beneficiary.
Grantor/Settlor: A person who creates a Trust or a Deed to property.
Trustee: A person or entity (such as a bank or financial institution) that is nominated by the Grantor/Settlor to hold and manage the assets that are titled in the name of a Trust.
Principal: The person that creates a Power of Attorney, Living Will, or HIPAA Release.
Agent: The person that is given the ability to act on behalf of another through a Power of Attorney, Living Will, or HIPAA Release.
Financial Power of Attorney: A legal document created by one party, the Principal, granting another trusted party, the Agent, the authority to act on behalf of the Principal in financial matters. This is also referred to as a General Power of Attorney or a General Durable Power of Attorney.
Healthcare Power of Attorney: A legal document created by one party, the Principal, granting another trusted party, the Agent, the authority to act on behalf of or make decisions for the Principal in medical or health-care matters. This is also referred to as an Advanced Healthcare Directive when included in the same document as the Living Will.
Living Will: A legal document that dictates a person's desires regarding the medical treatments that they would or would not want to be used to keep them alive in the case of a terminal illness or injury, as well as other medical decisions such as pain management and organ donation.
HIPAA Release: HIPAA stands for the Health Insurance Portability and Accountability Act, which requires the protection of sensitive patient health information from being disclosed without the patient's permission or knowledge. A HIPAA Release is a medical directive that allows the Agent to receive medical records and information from medical professionals on the care of the Principal.