The Essential Glossary of Estate Planning Terms

When it comes to supporting estate planning conversations, knowing the right terminology can make all the difference.

Below, we’ve outlined some of the most common estate planning terms, using plain-language definitions from our approved glossary, so you can approach these discussions with clarity and confidence.

Advanced Medical Directive

This document is the equivalent of a "Living Will" and is a statement of the healthcare decisions that you would make when you are no longer able to do so yourself. If you are competent to make end of life decisions, then what you say will be taken under consideration. It is only after you are no longer able to speak for yourself that the Living Will will come into effect.

Beneficiary

A person, persons or organization (for example, a charity) designated to receive a benefit from a benefactor. Benefits may be life insurance proceeds, retirement account funds, assets detailed in Will, etc.

Durable Power of Attorney (POA)

A power (financial) granted by a person ("the donor") to another ("the attorney") giving the attorney authority to act on the donor's behalf. Power has effect even when the donor loses his or her mental capacity. The power ceases when the person dies.

Estate

Assets owned by the deceased at the date of his or her death.

Executor

The person(s)/company nominated by the deceased in his or her Will to administer their estate in accordance with its terms including the settlement of all debts and taxes.

Financial Power of Attorney

The Financial Power of Attorney is a separate document where you are designating an "attorney in fact" to handle your financial and legal affairs.

HIPAA Authorization

Authorizes trusted individuals to receive your protected health information for specified purposes.

Intestacy

Person having died without making a valid Will.

Last Will & Testament (Pour Over Will)

Your final wishes for your dependents and arrangements, with specific references to the details outlined in your Trust.

Living Will

Also known as an "advanced medical directive," a Living Will is intended to allow a person to specify the nature and extent (including refusal) of medical treatment they receive should they become incapable of doing so in the future.

Medical Power of Attorney

The Advanced Medical Directive is state specific — it may include both the Living Will as well as the appointment of an agent to make medical decisions for you when you are unable to do so yourself. This person will be the one to process the Living Will and will follow your instructions accordingly. The medical power of attorney will also speak on your behalf if medical treatment is required to improve your quality of life.

Personal Representative

Depending on your state of residence, the "executor" may be called a personal representative (PR). The job of the executor or PR is to collect and evaluate the decedent's assets, pay any taxes, reimburse for funeral expenses and other priorities as assigned by your state of residence. Next would be determining and paying any legally enforceable debts and, at the end of the time allowed under the code, make the final distribution.

Power of Attorney

Assign someone (an agent) to manage your personal and business responsibilities if you are away or incapacitated.

Probate

The court process to settle a deceased person’s estate. Involves validating the will, paying debts, and distributing assets. Often lengthy and costly, which is why many people use trusts to avoid it.

Revocable Living Trust

The central hub of your estate plan with provisions for the management, control, and distribution of your assets during life and after death.

Schedule of Assets

A listing of assets that you hold in the Trust are subject to the provisions of the Trust. This can be easily updated as you add or remove Trust assets.

Self-Proving Affidavit

A notarized statement attached to a will that confirms the will was signed properly. This makes probate faster and smoother since witnesses don’t have to appear in court.

Successor Trustee

The person (or company) who takes over management of a trust when the original trustee can no longer serve (due to death, incapacity, or stepping down).

Trust

A written arrangement containing the terms upon which property is held and managed for the benefit of the persons named therein.

Trustee

The person(s)/company appointed by deed to hold the trust property and manage the trust funds in accordance with the terms of the trust. While the guardian is the supervisor of the child or incapacitated person, the trustee’s responsibility is to garner the assets that have been indicated either through the Will or outside of probate and the assets that are distributed as a result of the estate. The activity of the trustee will terminate at the time that the Trust has been indicated to terminate. Please understand that the trustee appointed under the Will is different from the person appointed under the financial power of attorney.

Trust Funding

The act of moving assets into a trust’s name (e.g., retitling a house deed or updating a bank account). If assets aren’t funded, they may still go through probate, even if a trust exists.

How Professionals Can Use This Guide

This glossary is more than a list of terms. It is a practical reference for identifying gaps in current estate plans and knowing when to coordinate with an estate planning partner. 

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