Estate LawMagazine
Get Your Plan →
Home

Estate Planning Glossary

Plain-English definitions of estate planning, trust, and tax law terms.

ABCDEFGHIJLMPQRSTUW

A

Administrator
A person appointed by a court to manage the estate of someone who died without a will (intestate).

B

Beneficiary
A person or organization designated to receive assets from a will, trust, life insurance policy, or retirement account.
Bypass Trust (Credit Shelter Trust)
A trust designed to use the estate tax exemption of the first spouse to die, keeping assets out of the surviving spouse's taxable estate.

C

Charitable Lead Trust (CLT)
A trust that provides income to a charity for a period of time, after which the remaining assets pass to non-charitable beneficiaries.
Charitable Remainder Trust (CRT)
A trust that provides income to the grantor or other beneficiaries for a period of time, after which the remaining assets pass to charity.
Codicil
A legal document that amends or modifies an existing will without replacing it entirely.

D

Decedent
A person who has died.
Disclaimer
A refusal to accept an inheritance, which causes the assets to pass as if the disclaimant had predeceased the decedent.
Durable Power of Attorney
A legal document authorizing someone to act on your behalf in financial matters, even if you become incapacitated.
Dynasty Trust
A long-term trust designed to pass wealth from generation to generation while minimizing estate and generation-skipping transfer taxes.

E

Estate Tax
A federal and sometimes state tax imposed on the transfer of assets at death. The federal exemption is currently over $13 million per person.
Executor (Personal Representative)
The person named in a will to carry out its instructions and administer the estate.

F

Family Limited Partnership (FLP)
A partnership used to transfer business or investment assets to family members, often with valuation discounts for estate planning purposes.
Fiduciary
A person or institution with a legal duty to act in the best interests of another, such as a trustee or executor.

G

Generation-Skipping Transfer (GST) Tax
A federal tax on transfers to grandchildren or other 'skip persons' that are more than one generation below the transferor.
Gift Tax
A federal tax on transfers of property during life. The annual exclusion is $18,000 per recipient (2024).
Grantor
The person who creates and funds a trust.
Grantor Retained Annuity Trust (GRAT)
A trust in which the grantor retains an annuity payment for a fixed term, with any remaining assets passing to beneficiaries free of gift tax.

H

Healthcare Proxy (Healthcare Power of Attorney)
A document designating someone to make medical decisions on your behalf if you are unable to do so.

I

Intestate
Dying without a valid will. State intestacy laws determine how assets are distributed.
Irrevocable Trust
A trust that generally cannot be changed or revoked after it is created. Used for asset protection and estate tax planning.

J

Joint Tenancy with Right of Survivorship
A form of co-ownership in which the surviving owner automatically inherits the deceased owner's share.

L

Letters Testamentary
A court document authorizing an executor to act on behalf of an estate.
Living Trust (Revocable Trust)
A trust created during your lifetime that can be changed or revoked. Avoids probate but does not provide estate tax benefits.
Living Will (Advance Directive)
A document stating your wishes regarding medical treatment if you become incapacitated.

M

Marital Deduction
An unlimited deduction allowing married couples to transfer any amount of assets between them free of estate and gift tax.
Medicaid Planning
Strategies to qualify for Medicaid long-term care benefits while preserving assets for a spouse or heirs.

P

Per Stirpes
A method of distributing assets in which a deceased beneficiary's share passes to their descendants.
Pour-Over Will
A will that directs any assets not already in a trust to be transferred ('poured over') into a trust at death.
Private Foundation
A nonprofit organization funded by a single individual, family, or corporation, used for charitable giving and tax planning.
Probate
The legal process of validating a will and administering an estate under court supervision.

Q

Qualified Personal Residence Trust (QPRT)
A trust that removes a home from your taxable estate while allowing you to continue living in it for a fixed term.

R

Revocable Trust
See Living Trust.

S

Special Needs Trust (Supplemental Needs Trust)
A trust designed to benefit a person with disabilities without disqualifying them from government benefits.
Spendthrift Trust
A trust that protects beneficiaries from their own financial mismanagement by restricting their access to trust assets.
Step-Up in Basis
The adjustment of an inherited asset's cost basis to its fair market value at the date of the decedent's death, reducing capital gains tax.

T

Testamentary Trust
A trust created by a will that takes effect at death.
Testator
A person who has made a will.
Trustee
The person or institution responsible for managing a trust according to its terms.

U

Unified Credit
A credit against federal estate and gift taxes equal to the tax on the basic exclusion amount.

W

Will (Last Will and Testament)
A legal document expressing a person's wishes regarding the distribution of their assets and the care of minor children after death.
Note: Definitions are for educational purposes only and may not reflect the most current legal interpretations. Laws vary by state. Consult a qualified attorney for legal advice.