Estate Planning Glossary: Understanding the Language of Legacy

Advance Directive (Living Will)

A legal document that specifies your wishes regarding medical treatment if you become unable to communicate — for example, whether you want life-sustaining treatment in a terminal condition. Different from a healthcare proxy, which names a person to make decisions; an advance directive states your actual preferences.

Beneficiary

A person or entity designated to receive assets from an estate, trust, or financial account. Beneficiaries named on life insurance policies, IRAs, and retirement accounts receive those assets directly — outside of the will and probate process.

Estate

Everything you own at the time of your death — real estate, bank accounts, investment accounts, retirement accounts, life insurance (in some cases), personal property, and business interests. Your estate is what gets distributed according to your will or, if you have no will, your state's intestacy laws.

Executor (Personal Representative)

The person named in your will to carry out its instructions — gathering assets, paying debts and taxes, and distributing the remainder to your beneficiaries. Being an executor is a significant responsibility; choose someone organized, trustworthy, and willing to serve.

Grantor

The person who creates and funds a trust. Also called the settlor or trustor. In a revocable living trust, the grantor typically also serves as the initial trustee and beneficiary during their lifetime.

Guardian

A person appointed to care for minor children if both parents are deceased or incapacitated. Naming a guardian in your will is one of the most important reasons for parents of young children to have an estate plan. Without a named guardian, the court will make this decision.

Healthcare Proxy (Healthcare Power of Attorney)

A legal document that names someone to make medical decisions on your behalf if you are unable to do so. Your healthcare proxy should understand your values and wishes and be willing to advocate for them under difficult circumstances.

Intestate

Dying without a valid will. When someone dies intestate, their state's default inheritance laws determine who receives their assets. These rules follow a fixed hierarchy and may not reflect the deceased's actual wishes.

Irrevocable Trust

A trust that, once established, generally cannot be changed or revoked by the grantor. Assets transferred to an irrevocable trust are removed from the grantor's taxable estate, which can reduce estate taxes. Common types include irrevocable life insurance trusts (ILITs) and special needs trusts.

Power of Attorney (Durable)

A legal document authorizing someone (your agent) to manage your financial affairs on your behalf. "Durable" means it remains effective even if you become mentally incapacitated. Without a durable power of attorney, your family may need to go to court to manage your affairs if you are incapacitated.

Probate

The court-supervised legal process of validating a will and distributing a deceased person's estate. Probate can be time-consuming, costly, and is a matter of public record. Many estate planning strategies — trusts, beneficiary designations, joint ownership — are designed to help assets pass outside of probate.

Revocable Living Trust

A trust created during your lifetime that you can modify or revoke at any time. Assets held in the trust avoid probate and pass directly to beneficiaries. The grantor typically serves as trustee during their lifetime and names a successor trustee to take over upon death or incapacity.

Successor Trustee

The person or institution named to take over management of a trust when the original trustee dies, resigns, or becomes incapacitated. Choosing a reliable successor trustee is a critical part of trust planning.

Trustee

The person or institution responsible for managing trust assets according to the terms of the trust document. The trustee has a fiduciary duty to act in the best interests of the beneficiaries.

Will (Last Will and Testament)

A legal document that expresses your wishes for the distribution of your assets after death, names a guardian for minor children, and appoints an executor to carry out your instructions. A will must go through probate before your wishes can be carried out.