For the Family
Estate Settlement Glossary of Terms
See Estate Settlement Frequently Asked Questions
Administrator The individual or institution appointed by the court to oversee the settlement of an estate of a person who has died without a will.
Alternative Date of Death The executor or trustee of an estate has the option to appraise or value assets six months after the death of the decedent. Estate tax liabilities may be lower in the event that assets values have declined over this six month period.
Affidavit The written declaration of facts made voluntarily under oath.
Ancillary Administration The Probate of the decedent’s property located in a different state than which the decedent lived.
Annual Exclusion The amount of money or value of property (currently $12,000 for an individual and $24,000 for husband and wife) that can be given as a gift to a recipient each year without incurring gift tax.
Appraisal The process of determining the fair market value of property or asset within an estate.
Ascendants The ancestors of a person either alive or deceased such as; parents, grandparents, great-grandparents.
Beneficiary An individual named in a will or trust document to receive money, property, principal or income from an estate or trust.
Bequest A Gift of property given under the terms of a will.
Bond Money that backs a promise that an individual will perform a duty.
Capital Gains and Losses A tax calculation, the difference between the purchase price (cost) and selling price (proceeds).
Codicil An addition or other change to an existing will.
Creditor A individual, business or entity which may be owed money by an estate.
Claim Against an Estate Refers to a charge against an estate to settle an agreement or an outstanding obligation (as in the case of bills unpaid at the time of death).
Contest of a Will Challenging the validity of a will, through a legal proceeding, to prevent the distribution of estate assets.
Date of Death The date the decedents dies. (see step up on death article)
Descedent The person who died.
Death Taxes Federal and state taxes that are due against property or the transfer of assets upon the death of the owner. Often referred to as estate taxes or inheritance taxes. (estate tax calculator)
Deduction For tax purposes, the portion of an estate that does not generate tax (such as the unlimited marital deduction).
Descendants Any children or offspring leaving or deceased including grandchildren.
Domicile The state and county that the decedents lived (primary residence).
Donee / Donor The recipient of a gift; the giver of a gift.
Executor The individual or institution named in a will responsible for carrying out the provisions specified in a will. A co-executor serves as executor with one or more named individuals. (see word of caution)
Fiduciary The individual or institution responsible for acting in the best interests of another party. Fiduciaries are bound by law to put aside personal interests and act in good faith when making decisions for the benefit of another. (see fiduciary duties article)
Grantor An person who gives property outright or through a trust document.
Guardian A individual or institution (trust company) determined by a court to manage the property of a individual who is judged incapable of handling their affairs.
Heir A person inherits funds or property from the estate of a person who has died.
Homestead Property that is set aside for a specific family member that cannot be transferred to a third party.
Interested person A person who may have a claim against a decedent’s estate or an interest in a distribution or outcome of an estate.
Intestate The term for dying without a will. (see beneficiary statutory payout calculator for each state)
Inventory A list of estate assets values and liabilities. (see getting organized checklist)
Invasion of a Trust Refers to a distribution of assets made from the principal of a trust.
Irrevocable Trust A type of trust that cannot be revoked or changed in any way.
Joint Ownership Also called joint tenancy, this phrase refers to ownership of property by two or more persons, generally with right of survivorship (upon the death of one owner, the surviving owner or owners assume ownership). (see transfer of property article)
Jurisdiction The authority of a court to determines legal cases.
Last Will Literally, the will last executed by an individual, which revokes any former existing wills.
Letters of Administration Documentation signed by the probate court give a person authority to act on behalf of an estate.
Living Trust A trust that takes effect while the settlor is still alive.
Living Will A legal document in which an individual states, in advance of final illness or injury, his or her wishes regarding procedures and equipment designed to extend life.
Petition Documents filed in probate court to request that an action be taken, such as a petition to open an estate for probate.
Power of Appointment The power given by an individual to another in a will or trust document to determine which persons will receive an interest in his or her estate.
Power of Attorney A legal document authorizing one individual to act as the agent or "attorney" for another (the "principal"). If the attorney is authorized to act in behalf of another for all matters, he or she has general power of attorney. Authority to act solely regarding specified situations is special power of attorney. If the authority granted extends beyond the disability of the principal, the attorney has durable power of attorney.
Preference The payment of certain types of creditors before other creditors.
Principal Refers to the assets included in a trust that yield income. In an agency relationship, this word refers to the individual who gives authority to the agent to act on his or her behalf. Principal also refers to an asset of an estate or trust which is viewed separately from the income it may provide (as in principal and income accounting).
Probate The process through which a will is proved to be valid and the legal procedure of settling an estate.
Pro rata A portion of value based on percentage amount.
"Prudent Investor" Rule Legal term that refers to the duty of the fiduciary to invest and manage assets in the best interests of another.
Real Property Land and that which is attached to the land.
Remainderman In the case of a trust, this term refers to the individual who will receive the principal of a trust when final distribution takes place.
Revocable Trust A type of trust that can be terminated by the settlor (the opposite of an irrevocable trust).
SS-4 The application form that is used to apply for a federal tax identification number with the IRS. (get SS-4 form)
Settlor An individual who establishes a trust in order to transfer property. (See Grantor)
Successor Trustee or Executor An individual or institution taking the place of a trustee or executor unable to continue the responsibilities designated in the trust agreement or will.
Summary Administration A simplified probate proceeding for estate valued at less than a stipulated amount (see state statues) and holds no real property.
Testamentary Trust A type of trust that is established under the will of a deceased individual.
Testate Making and leaving a valid will; an individual who dies without having made a will is said to have died intestate.
Title Legal ownership of property. (see transfer by title article)
Trust A legal, fiduciary relationship in which an individual or institution (the trustee) holds legal title to property with the responsibility for keeping or managing this property for the benefit of another person or beneficiary.
Trust Agreement A legal document that establishes a trust and outlines the rules and guidelines affecting its management and disposition.
Trust Fund Property held in trust. This term originally applied only to money held in trust, but is frequently used when referring to all property held in trust.
Trustee The individual or institution with responsibility for management of property placed in trust for the benefit of another individual.
Unified Credit A federal tax credit that offsets gift and estate-tax liability. (see unified Credit & estate tax charts)
Will A legal document expressing the wishes of an individual regarding distribution of his or her property after death. (reading the will)
Estate Settlement frequently asked questions
Steps in Estate Settlement