1. Estate Planning 101

Estate Planning Terminology

A/B Trust 

An A-B trust is a joint trust created by a married couple; upon one spouse's death, the trust splits into a survivor portion (the A trust) and a bypass portion (the decedent's trust, or B trust).


One who is entitled to profit, benefit, or advantage from a contract or estate.

Certification of Trust

A legal document that can be used to certify both the existence of a Trust, as well as to prove a Trustee's legal authority to act. 


A written addition or amendment to a will. 

Comprehensive Transfer Document

The comprehensive transfer document is a precautionary document stating your intent is to transfer all assets you own to your newly created revocable trust.


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

Contingent Beneficiary

A contingent beneficiary is entitled to profit from a contract or estate only upon the occurrence of a specific event, which is commonly when a primary beneficiary dies or refuses payment prior to the payout.  


A deceased person. 


Persons who follow decedent in line of descent.


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

Estate Tax

Inheritance Tax. 


The act of signing and notarizing trust documents. 


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. 


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


One who dies without a will. 


Lineal descendants. 

Joint Tenancy

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

Last Will and Testament

An instrument whereby one makes a disposition of their property to take effect after his death. 

Life Interest/Life Estate

An interest in property that is to terminate upon the holder’s death (or some other designated person) of the interest.

Living Will

A written statement detailing a person's desires regarding their medical treatment in circumstances in which they are no longer able to express informed consent, especially an advance directive.

Marital Deduction

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

Personal Letter of Direction

A personal letter of direction is a letter that you write to your loved ones. It contains detailed instructions for distributing your personal property upon your death. You may include burial instructions and other personal instructions as desired.

Pour-Over Will

An instrument that ensures that property not previously transferred into a revocable living trust will be transferred into the trust at the Grantor’s death. 

Powers of Appointment

The power vested in an individual to make decisions affecting disposition on the distribution of assets. 

Power of Attorney

A 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 they had been living. 


The legal process for validating wills and administering estates. In general, property is distributed according to the decedent's Last Will and Testament, if there is one, or according to state law if no Will exists. 

Probate Court

The legal system established to administer the estates of descendants and oversee the adoption and guardianship of minors. 

Revocable Living Trust

A revocable living trust is a legal entity created to hold ownership of a person's assets and describe how and to whom those assets are to be distributed when the grantor passes away. The person who creates the trust is called the grantor, and in most cases, also serves as the trustee, controlling and managing the assets placed there during their lifetime. The grantor retains control of the trust and can modify or terminate the trust at any time. 

Schedule of Assets 

The Schedule of Assets specifically identifies assets to be transferred to the Trust. It should include real property and financial account information. 

Sprinkling Power

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

Successor Trustee

An individual who gains the authority to manage a trust after the death or resignation of a trustee.


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


One appointed to manage a trust. A trustee does not have any duties until the grantor can no longer perform their duties. Once the trustee has assumed control, they will be responsible for ensuring that your property is distributed to your beneficiaries according to the trust terms. Ideally, a trustee will be someone you know and trust.

Unified Credit

The dollar amount an individual can transfer free of tax. The credit is $11.2 million per individual.  A married couple will be able to shield 22.4 million from taxation. (2018)