Estate Planning Terms and Definitions

In-Terrorum Clause
A provision of a will or trust that disinherits a person in the event that he/she challenges the terms of the will or trust. Sometime called a No-Contest Clause.

Living Trust
Sometimes called an Inter-Vivos Trust--A written legal document established during a person's lifetime into which he/she places property.

Trustee
A person or institution responsible for the management and distribution of property held in a Trust. The trustee has the authority to act according to the instructions provided in the trust agreement. See Fiduciary.

Incapacity / Incompetent
Legally unable to manage one's own affairs due to mental disability. This may be temporary or permanent.

Transfer Tax
The combined Federal Estate and Gift tax. A single exemption credit applies whether the property was transferred during a person's lifetime (gift tax) or is held by a person at the time of his/her death (estate tax).

Estate
The total of all assets, all debts and other obligations of an individual. At the time of death the total amount of benefits (life insurance, annuity and retirement benefits) to be paid to beneficiaries are often also considered part of the estate for Federal Estate Tax purposes

Family Limited Partnership
A legal partnership agreement between members of a family for the management and control of property for the benefit of family members. Sometimes used to minimize transfer taxes.

Devise
A gift made by a will or a trust. A devise is made to a beneficiary under the terms of the will or trust.

Probate
The process through which the legal title to property is transferred from a decedent to the beneficiaries. If a person dies with a will (testate), the probate court determines if the will is valid, hears any objections to the will, orders that creditors be paid and supervises the process to assure that property is distributed by the Personal Representative or Executor according to the terms of the will. If a person dies without a will (intestate) the probate court appoints an Administrator who receives all claims, pays creditors, and then distributes all property according to the laws of the state.

Decedent
A person who has died.