Common Estate Planning Terms in Wills and Trusts
Estate planning is an area of the law with plenty of legalese. The placement of certain in documents like Missouri wills and especially special needs trusts attorney St.Common Estate Planning Terms in Wills and Trusts
Estate planning is an area of the law with plenty of legalese. The placement of certain in documents like Missouri wills and especially special needs trusts attorney St. Peters, Missouri can make a huge difference in the document.
Here are some commonly used estate planning terms in wills and trusts.
Wills
Testator / Testatrix: The person creating the will. Formally, a male creating a will is a testator, whereas a female is referred to as a testatrix.
Executor: The person or persons named in a will who will administer the estate when the testator dies. The person in charge. In Missouri and other states, an executor is called a personal representative.
Beneficiary: The person(s) named in a will that the testator wants to inherit their property. In a trust, this person is also referred to as a beneficiary.
Heir: The persons who will receive your property if you do not have a will in place when you die. Dying without a will is called “dying intestate” and each state, including Missouri has a list of heirs that receive your property when you die intestate and in what order. For example, in Missouri, many people don’t know that if a spouse passes away and does not have a will, all non-joint property owned by the deceased spouse goes partially to the children, if any, and partly to the surviving spouse. All receiving property are referred to as heirs.
Bequest: A specific item listed in a will, other than real estate, to be distributed at death as a gift. Example: “I give all of my silver coins to Joe.” The bequest is only the silver coins, not any others and Joe is the beneficiary of the item.
Devise: Real estate given at death, received by a devisee. Example: “I give my 10 acre farm to Joe.” The testator has devised the farm to Joe, the devisee.
Bequeath: Means that the testator is giving property to someone other than a person. Example: “I give my book collection to the St. Charles County Library.”
Bond: A policy that requires the executor to insure the estate, usually for the value of the estate. The idea is that if the executor runs off with the money, the heirs / beneficiaries are protected by the bond in place. A testator can state that no bond is required in their will.
Real Property: Land of any acreage and/or a home. Also includes anything affixed to the property. Example: Joe has a 10 acre farm, which includes his home. He also has a pole barn which is attached to the land. All are examples of real property.
Tangible Personal Property: Any property that you can actually touch. Example: Loose cash is personal property. Cash in a bank account is not personal property.
Intangible Property: Any property that you cannot touch. Example: Mutual funds that you hold in an account are intangible property.
Titled Property: Property that may or may not be tangible that has a registration. Example: A bank account. It is titled in your name, has an account and you get statements every month in the mail. Also an insurance policy because it has a policy number, a named insured and beneficiary.
Revocable Trusts
Grantor: The person creating the trust. Also referred to as a Settlor or Trustor.
Trustee: An individual or individuals listed in the trust to administer the trust for the grantor. The grantor and trustee are often the same person.
Beneficiary: Same as with a will, a person listed to receive assets in a trust.
Estate Tax: A tax levied either by the federal government and some states when a person passes away. The estate tax is much less of an issue because the estate tax exemptions are much higher than they used to be.
Estate Tax Exemption: An amount of money that a person is allowed to have when they pass away that does not result in federal estate tax being levied. In 2018, for a person this amount is approximately $11 million dollars. Any amount above that, without proper planning in place, is subject to taxation.
No-Contest Clause: A provision in a trust (or a will) that states that if a beneficiary to the trust contests their inheritance, they risk losing that inheritance if they file a lawsuit. These provisions vary greatly, but are enforced by courts and are a good way to ensure that beneficiaries don’t litigate your estate when you pass away.
These are just some of the terms that you would come across in a will or trust lawyer O’Fallon, MO. Creating documents with an estate planning lawyer is just part of the process. The real important part is understanding how they work and what the terms mean. Don’t get discouraged, we are all masters of our own knowledge and what’s natural to you would be unnatural to your attorney!
