Estate Planning Terms You Should Know

On Behalf of | Aug 3, 2019 | Firm News

Whether you are just getting started thinking about your future, or you are ready to prepare your estate plans, there are some terms you should know that will help you throughout the process. Of course, your estate planning lawyer will be available to help guide you along the way and answer any questions that come up, but if you know some of the basic terminology before you begin, it could save you time and money.

The attorneys at Galanti and Copenhaver have many years of experience handling different types of estate plans for their clients in California. Give us a call today to set up a consultation to discuss your estate planning needs with one of our skilled attorneys. We are here to help you plan for your future at any stage in the process.

Basic Estate Planning Terminology

Below you will find some of the definitions for some of the basic estate planning terms that are important to understand before you begin the process. This will help you ensure that you are creating the best estate plan for your needs.

Assets – Assets are any type of property with value that can be used to satisfy debts or commitments.

Beneficiary – A beneficiary is the person or organization that is to receive a distribution from your estate. There can be more than one beneficiary in your estate plan.

Durable Power of Attorney – A durable power of attorney is a document establishing that a person (the principal) has granted another person (the agent) the authority and the right to handle financial, and potentially other types of decisions on behalf of the principal.

Estate – This is a term for the combined assets and debts that were owned by a person during his or her life, or at the time of their death.

Heir – A heir is similar to a beneficiary, but the term heir specifically refers to a person who is entitled to inherit a portion of a person’s estate who has died without a will.

Irrevocable Trust – A trust that cannot be modified or canceled after it has been set up. The main benefit to an irrevocable trust is that the assets placed in it are legally owned by the trust, and creditors are not able to go after the trust assets if they are seeking to have debts paid by the creator of the trust.

Living Trust – A living trust is a form of revocable trust that is used in estate planning to avoid probate proceedings and to help in situations involving incompetency. It also allows for a smoother way of managing assets when the death of the grantor occurs. It can also be beneficial for estate tax purposes for married couples. This type of trust is established while the grantor is still alive and maintains legal rights to the assets in the trust, and it can be modified.

Probate – Probate is the legal process that can occur to facilitate the transfer of a deceased person’s assets if they die without a will, and in some cases if they leave a will. Your estate planning attorney may be able to help you prepare your estate in such a way that you can avoid probate proceedings for your beneficiaries.

Trust – A trust is a legal document in which property is maintained and managed by a trustee for the benefit of a beneficiary (or beneficiaries). There are different types of trusts, and your attorney can help you decide what is right for you and your estate.

Trustee – A trustee is the person or institution that is responsible for managing the trust property and assets under the terms set forth in the trust. You will want to carefully choose a trustee that you trust to take on this role, as there may be substantial responsibilities required by someone fulfilling this role.

Will – A will, or a last will and testament is a legal document that is drafted for the purpose of distribution of a person’s property upon their death, including personal property and real estate. In the terms of the will, the person drafting it will specify how they want their assets to be distributed when they pass.

The terms defined above should help you to have a basic understanding of what estate planning entails before you meet with your estate lawyer. It is helpful to have a general idea of what you are looking to accomplish in mind prior to your meeting, and then your lawyer can help you fine-tune your plans to meet your goals.