Common Terms You May Hear During the Estate Planning Process
Navigating the legal process associated with estate planning can be intimidating at first, as you will find an entire glossary of estate planning terms that you would never be familiar with unless you were a legal professional. Fortunately, a skilled estate planning attorney can guide you through the process and is well versed in all the terminology and estate planning tools available to best address your family’s needs. However, learning some basic estate planning terms is important to help you make informed decisions about your health, family, and assets. Our estate planning attorneys in New Jersey want to highlight some fundamental estate planning terms to understand:
- Estate: This refers to the total property left behind owned by a person who has died. A person’s estate includes assets and debts.
- Estate Planning: process in which a person, married couple, or those in domestic partnerships decide what will happen to their assets and how their loved ones will be cared for if the person or their spouse/partner dies or becomes incapacitated. These wishes are stated in legal documents, such as wills, living wills, powers of attorney and health care directives. This would also include trust planning.
- Asset: Something of value owned by a person or entity, such as real estate, bank accounts, jewelry, investments, life insurance, and art.
- Will or Last Will and Testament: This is usually the chief legal document created in an estate plan. This document reflects decisions about the distribution of assets, including amounts and beneficiaries. It designates the person or entity responsible for managing the estate until everything has been distributed. It can also name guardians for minor children and specify final arrangements.
- Trust: A trust can be created to set aside money or specific property for someone the grantor/settlor (the one who creates the trust) wants to distribute to in the future. For example, you may want your minor children to turn 21 before receiving money from your estate. Or you may want the estate to distribute the money overset periods once your children reach a specific age. With a trust, you can control how and when these disbursements occur after you die.
- Probate: When a person dies, their will is analyzed by the appropriate court’s probate division (usually called the surrogate’s court) for validity. For people who pass away without a will, the surrogate’s court process is called an “administration," which is similar to the probate process.
- Executor: The person designated to carry out the instructions stated in a will.
- Trustee: The person designated to control and manage assets for the beneficiary’s advantage according to the terms of a trust.
- Guardian: The person designated to represent and care for a minor or legally disabled person.
- Durable Power of Attorney for Property: A legal document granting authority to a designated person to make financial decisions on behalf of someone who cannot make these decisions for themselves.
- Medical Power of Attorney or Health Care Proxy: A legal document granting authority to a designated person to make health care decisions on behalf of someone who is currently unable to make these decisions for themselves.
- Beneficiary: A person designated to receive a benefit from trust assets or a person’s estate after they die.
Estate planning doesn’t have to be complicated when you enlist an experienced and knowledgeable estate planning attorney to guide you through the process. While it can be difficult to consider situations where you may become unable to make decisions for yourself, planning for the unexpected is necessary to protect your best interests and those of your family. If you wish to create, modify, or update your estate plan, get in touch with BMC Estate Planning. We want to be your trusted advisors in estate planning and for life. We will assist you in creating a comprehensive estate plan that protects the ones you love and provides you with peace of mind.
Getting in touch
Borenstein, McConnell & Calpin, P.C. is a Wills & Estate Planning law firm serving Central and Northern New Jersey, as well as New York City. We strive not only to give you a great client experience, but to become your trusted adviser for life. To reach Alec, please send an email to firstname.lastname@example.org.
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