Estate Planning Glossary

INTRODUCTION

This is an Estate Planning glossary by the Bress Law Firm of legal terms that are essential to understanding the estate planning process. Many of the terms included contain other terms included in this glossary. Most of these terms are capitalized when used in other entries, indicating that you can cross-reference their meaning from other entries in this glossary. Also keep in mind, some of these terms may have a different meaning outside of the estate planning context.

ADMINISTRATOR: The person(s) or entity appointed by a court to carry out the administration of a decedent’s Probate Estate when there is no will or designated Executor. The administrator has the same duties and responsibilities as an Executor. These include the collection, preservation, and management of the estate, the paying off of debts and claims against the estate, and the distribution of what remains to the estate’s beneficiaries. See Probate, Probate Estate, Intestate, Executor, Personal Representative.

ADVANCED DIRECTIVES: See Living Will.

ASSET: Property, tangible and intangible, that has value.

BENEFICIARY: A person who is entitled to an interest in property by virtue of a legal instrument or arrangement such as a will, trust, insurance policy, or by other legal disposition.

BENEFICIARY DESIGNATION: A Beneficiary Designation is a legal document that designates who will receive the proceeds or benefits of a financial asset after the owner’s death. Beneficiary designations are a popular estate planning tool that allows a grantor to minimize certain assets may otherwise be subject to the probate process.

CODICIL: A written amendment to a will that modifies the will. A codicil does not require re-execution of the will, but it must be executed with the same formalities the applicable jurisdiction requires to execute a valid will. Upon execution, the codicil becomes a part of the will.

COLLATERAL HEIR: A relative of a Decedent who is not an ancestor or direct descendent of the Decedent, which includes brothers, sisters, aunts, nieces, nephews, and cousins. See Heir, Probate, Intestate.

DECEDENT: A person who has died.

DEVISE: To devise property is to dispose of property by will. The term is also used as a noun to describe such property. Historically, “Devise” was limited to refer to only real property but is now generally used to refer to any property that is disposed of by will. Similar terms are “Bequest” and “Legacy,” but these terms do not include real property.

DURABLE POWER OF ATTORNEY FOR HEALTHCARE: A legal document in which a person grants another the power to make medical decisions on their behalf in the event they require medical care and either cannot express or have not expressed their own preferences regarding medical care. Also known as a Healthcare Proxy. There are two types of durable powers of attorney: 1) “Immediate,” which is effective upon its execution, and 2) “Springing,” which springs into effect in the event of the principal’s incapacity. See Power of Attorney, Living Will, Incapacity.

ESTATE: The entirety of property owned by a person. Estate also includes interests in property. Probate Estate refers to a decedent’s property that is subject to the probate court’s jurisdiction. See Probate, Probate Estate.

ESTATE PLANNING: An area of law concerning the planning, arrangement, management, and disposal of a person’s assets during and after their lifetime. Estate Planning also includes expressing one’s funereal wishes, and medical preferences in the event of their incapacity.

ESTATE PLANNING OBJECTIVES: Common Estate Planning Objectives include Taking care of loved ones; Probate avoidance or mitigation, Minimizing estate taxes, Asset management, Retirement planning, Healthcare planning, Charitable giving, Providing for the orderly administration of your estate, and Establishing and implementing a prudent estate plan that accomplishes your various goals in a flexible and efficient manner. Estate Planning goals and objectives are not limited to the above, and depend on the person, their situation, and their wishes as to the distribution of their estate.

EXECUTOR: The person or entity appointed by a testator to administer the testator’s estate according to the provisions of the testator’s will. See Administrator, Estate, Probate Estate.

FIDUCIARY: A person or institution (e.g., a bank or trust company) required to act for the benefit of another within the scope of their relationship. For example, some of the duties of a Trustee are the duties of good faith, loyalty, and prudent administration. A Trustee’s duties are more rigorous than those of most fiduciaries.

GUARDIAN: A person appointed by a court to make decisions for either a minor or an adult who is incapable of making such decisions. See also Fla. Stat. § 736.0103.

HEIR: A person who is entitled to a distribution of Intestate property under the applicable state law of descent and distribution. In Florida, Intestate property is distributed according to the Per Stirpes scheme of distribution. See Intestate, Per Stirpes.

INCAPACITY: Lack of physical ability or mental capacity to make legal decisions.

INTESTATE: Of or relating to a decedent who died without a valid will. “Intestacy” is the state or condition of the same. The word intestate is sometimes used as a noun to refer to a person who died without a valid will. The intestate’s property is distributed according to the applicable laws of intestacy. See Heir.

IRREVOCABLE TRUST: A trust that upon creation cannot be altered or revoked. An irrevocable trust is popular estate planning device because it limits estate taxes and can shield assets from creditors.

LADY BIRD DEED: A Lady Bird Deed, also called an Enhanced Life-Estate Deed, is a deed that allows the owner of real property to transfer ownership of the property while retaining the right to use and occupy the property, as if the transferor were still the sole owner of the property. Lady Bird Deeds are only valid in a few states, including Florida. This type of deed was named after President Lyndon Johnson's wife, after he used this estate planning device to transfer real property to his wife, Lady Bird. Lady Bird Deeds are a popular estate planning tool in Florida because it enables the transferor to avoid probate and avoid estate taxes.

LIVING TRUST: A trust created by a trustor that commences during the trustor’s lifetime. It is distinguished from a “Testamentary Trust,” which is created by the terms of a will and commences after testator’s death. A Living Trust is also known as an “inter vivos trust”. See Trust, Testamentary Trust.

LIVING WILL: A document specifying a person’s preferences for medical care in the event they require urgent care and are unable to make their own decisions. A living will may also include a Durable Power of Attorney, in which a person designates another to make medical decisions on their behalf in the event of their incapacity. See Incapacity, Durable Power of Attorney.

MARITAL TRUST: A type of Trust that transfers property to a surviving spouse. It is typically used to minimize gift and estate taxes.

MUTUAL WILL: Separate wills made by two persons, usually spouses, who have mutual or identical provisions in favor of the other. Unless there is a valid contract showing mutual provisions were “in consideration” of each other (i.e., a contractually valid promise in return for a promise, induced by a bargained-for exchange), the signatories are not prevented from amending or revoking their will.

NONPROBATE ASSET: Assets for which title is transferred during a person’s lifetime through what is known as a will substitute, thus are not subject to the probate court’s jurisdiction. This is because prior to or upon the decedent’s death, non-probate assets are no longer a part of the decedent’s estate. Because of the popularity of will substitutes, most property these days is transferred “outside of probate.”

PER STIRPES: Under the Per Stirpes scheme of intestate distribution, the state distributes a decedent’s assets proportionally according to the share of the beneficiary’s predecessor-ancestor’s share. Usually, the inheritor’s ancestor is a parent, but if the parent predeceases their own parent, the inheritor’s ancestor may be a grandparent or other ancestor. Florida follows the Per Stirpes scheme of distribution. Other states may distribute the intestate share of a decedent’s estate according to what is known as the Per Capita scheme of intestate distribution. See Intestate.

PERSONAL REPRESENTATIVE: An executor or administrator of decedent’s estate. See Administrator, Executor, Probate.

POWER OF ATTORNEY: A legal instrument in which a person (the principal) grants another the authority to act on their behalf as their agent or attorney-in-fact. There are two types of power of attorney, general and specific, which respectively grant general or specific powers to the principal’s agent or attorney-in-fact. Compare with Durable Power of Attorney.

POUR-OVER TRUST: A trust that distributes assets to another trust or that receives assets from either another trust or a legal instrument such as a Pour-over Will.

POUR-OVER WILL: A will or provision in a will declaring that property is to be distributed into a previously established trust (i.e., a Pour-over Trust).

PROBATE: From the Latin, meaning “to prove.” The process whereby a decedent’s estate (also Probate Estate or probate property) is admitted to the probate court to be administered under the court’s supervision; and, is ultimately distributed according to the terms of a will, if any, and the state’s laws of intestacy. The phrase “to probate” means to admit to the probate court a will to prove its terms, and where a Personal Representative administers the decedent’s Probate Estate. See Will, Probate Estate, Intestate, Personal Representative.

REMOTE ONLINE NOTARIZATION: The process of notarizing documents online according to the formal execution requirements of the state. The state-licensed notaries who are allowed to facilitate such executions are called “remote online notaries.” In response to Covid-19, most states, including Florida, passed bills authorizing remote online notarization.

RESIDUARY ESTATE: The part of a decedent's estate remaining after payment of all debts, expenses, statutory claims, taxes, and testamentary gifts have been made. Also called residue.

REVOCABLE TRUST: A trust in which the Settlor reserves the right to terminate the trust and reclaim the trust property and any undistributed income.

SETTLOR: A person who sets up a trust. Also called a trustor; grantor; creator; founder. See also Fla. Stat. § 736.0103.

SPECIAL NEEDS TRUST: A Trust created for the benefit of a disabled person. One advantage of such a trust is that it places limits on the use of its assets so that its beneficiary remains eligible for certain governmental assistance.

SPENDTHRIFT TRUST: A trust designed to protect the beneficiary from creditors and their own financial imprudence. A Spendthrift Provision in a Trust restricts the beneficiary’s ability to transfer their interest. The key to such a trust or provision being able to shield the beneficiary from creditors is that it restricts both voluntary and involuntary transfers of interest. See also Fla. Stat. § 736.0502.

TESTAMENTARY: Of or relating to a will.

TESTAMENTARY GIFT: Technically there is no such thing as a “testamentary gift.” A gift is a present, intentional, and voluntary transfer of a property interest without consideration. This is not possible if the grantor is deceased. The latest a grantor can grant a gift is on the grantor’s death bed, is called a “gift casua mortis.” Property transferred after one’s death is called “testamentary property.” Confusing this fundamental distinction has led to some desired beneficiaries to not inherit. For a famous case involving such a “gift,” see King v. Trustees of Boston University, 420 Mass. 52, 647 N.E.2nd 1196 (Mass. 1995).

TESTAMENTARY TRUST: A trust that is created by a will and takes effect when the Settlor dies. See Settlor. Compare with Living Trust.

TOTTEN TRUST: A bank account in the depositor’s name “as a trustee for” a named beneficiary. Is really a will substitute that has little in common with an ordinary trust.

TRUST: An entity created to hold assets for the benefit of certain persons or entities. Whereas a trust is managed by a Trustee, who hold “legal title” to the trust property, the beneficiaries hold “equitable title” to the same. As such, the Trustee must manage the trust according to the terms of the trust and applicable law solely for the benefit of its beneficiaries.

TRUSTEE: A person who is named by a will, trust declaration, or court to carry out the provisions of a trust. A trustee can be an individual or entity such as a bank or trust company. Once a trustee accepts the position, the trustee is bound by the provisions of the Trust and applicable law, including certain Fiduciary duties and obligations. See Trust, Fiduciary. See also Fla. Stat. § 736.0103.

WILL: A legal instrument expressing a person’s intent regarding the disposition of their property after their death.

WILL SUBSTITUTE: A Will Substitute is an estate planning document, instrument, or devise that allows a person to dispose of part or all of their estate “outside of probate” (meaning without having to go through the probate process). Will substitutes are popular tools in estate planning.

Last updated May 13, 2023.

By Michael N. Bress, Attorney at Law

© 2023 Bress Law Firm, PLLC

BRESS LAW FIRM, PLLC. Estate Planning (Wills, Trusts, & Estates), Business Law, and Landlord Tenant Law. The Bress Law Firm is the sole practice of Michael N. Bress, Attorney at Law. We are located at 2980 NE 207th St. #300, Aventura FL, 33180, but serve clients through Miami-Dade and Broward. Appointments are by appointment only. If you require the services of an estate planning attorney, to Schedule a Free Legal Consultation, contact the Bress Law Firm by phone 954-336-8049, email michael@bresslaw.com, contact form, or visit our homepage at www.bresslaw.com.

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