Estate Planning 101 (Part 2)

Key Points

  • Estate Planning sounds like a daunting endeavor, but it doesn’t need to be.
  • Often what’s involved is simple steps, but wrapped in complicated jargon.
  • Use this resource as a guide to understanding estate planning terminology.

Finance is often simple concepts and easy math wrapped around complicated lingo and terminology. The same goes for Estate Planing. This post will break down some of the most commonly used terms and phrases that you might encounter as you build and create your Estate Plan.

Estate Planning Terms

We covered some basics of Wills and Trusts in Part 1 of this series, but don’t let the jargon get you down. Use these terms as a reference as you navigate your personal Estate Plan.*

Beneficiary – One entitled to profit, benefit, or advantage from a contract or estate.

Codicil – A written addition or amendment to a will. 

Conservatorship – A formal proceeding in which the court appoints a conservator to act on behalf of another in business and or personal matters. 

Contingent Beneficiary – One entitled to profit from a contract or estate only upon the occurrence of a specific event, usually one who received assets at the death of the primary or lifetime beneficiary. 

Decedent – A deceased person. 

Descendants – Persons who follow decedent in line of descent. 

Estate – The assets and liabilities, real and personal property, left by a decedent. 

Estate Tax – Inheritance Tax. 

Execute – The act of signing and notarizing trust documents. 

Executor/Executrix – Person or institution named in a will to carry out the will’s instructions. 

Gift Tax – Tax levied on gifts of property, to supplement estate and inheritance tax. 

Grantor – One who creates a trust; the trustor, the settlor. 

Intervivos – “Between the living” or “while living”. 

Intestate – One who dies without a will. 

Issue – Lineal descendants. 

Joint Tenancy – A holding of property by several persons in such a way that any one of them can act as owner of the whole and take the property by survivorship. 

Last Will and Testament – An instrument whereby one makes a disposition of his property to take effect after his death. 

Life Interest/Life Estate – An interest in property which is to terminate upon the death of the holder (or some other designated person) of the interest. 

Living Will – A document which formally expresses your wish to forgo extraordinary medical treatment when you become terminally ill. 

Marital Deduction – Exempts from estate tax all property passing from one spouse to the other by reason of gift or death. 

Pour Over Will – Instrument which provided that property not previously transferred into a revocable living trust is to be transferred to the trust at the death of the Grantor. 

Powers of Appointment – Power vested in an individual to make decisions affecting disposition on distribution of assets. 

Power of Attorney – Formal instrument by which an agent is appointed to act on your behalf. 

Principle of Representation – Permits the descendants of a deceased beneficiary to receive the same share collectively that the deceased beneficiary would have taken if he had been living. 

Probate – The process of proving a will. 

Probate Court – Court established for the administration of the estates of decedents, and the control of the adoption and guardianship of minors. 

Revocable Trust – A trust in which a contingent interest is given to another and in which the Grantor retains a present interest, ownership, and control. 

Sprinkling Power – The power vested in a trustee to distribute income to others over time. 

Successor Trustee – Individual who succeeds to the power to manage trust assets. 

Trust – A right of property, real or personal, held by one party for the benefit of another. 

Trustee – One appointed to manage a trust. 

Unified Credit – The dollar amount an individual can transfer free of tax. The credit is $11.58 million per individual.  A married couple will be able to shield $23.16 million from taxation. (as of 2020)

In Part 3 of this series, we’ll dig into why a Revocable Living Trust is a sensible path for many people, and for perhaps even you.

Need More Help?

At Investing Forever Advisory, we have Will and Trust Packages, as part of our Estate Planning Service. You don’t have to make these important decisions on your own. Each estate planning session starts with a series of questions specifically designed by our attorneys. Your answers to these questions give the attorney the information they need to make a document recommendation to craft an estate plan that aligns with your wishes and intentions.

If you’re ever in need of guidance, these blog posts may be of help. But be sure to contact a financial, tax, or legal professional for guidance and information specific to your individual situation. And as always you can reach out to me directly here with questions or concerns about your personal situation.

Finally, if you want to see how your risk appetite stacks up, check out my free risk assessment here.

The End.

* Blog content used with permission from

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