Chapter 51 - Wills & Trusts Vocabulary

Administrator

One who is appointed by a court to administer an estate if the decedent died without a valid will or if the executor named in the will cannot serve.

Bequest

A gift of personal property by will (from the verb to bequeath)

Charitable trust

A trust in which the property held by the trustee must be used for a charitable purpose, such as the advancement of health, education, or religion.

Codicil

A written supplement or modification to a will. A codicil must be executed with the same formalities as a will.

Constructive trust

An equitable trust that is imposed in the interests of fairness and justice when someone wrongfully holds legal title to property.

Devise

A gift of real property by will, or the act of giving real property by will.

Devisee

One designated in a will to receive a gift of real property.

Durable power of attorney

A document that authorizes a person to act on behalf of another person—write checks, collect insurance proceeds, and otherwise manage the disabled person’s affairs, including health care—when that person becomes incapacitated

Escheat

The transfer of property to the state when the owner of the property dies without heirs.

Estate planning

Planning in advance how one’s property and obligations should be transferred on one’s death. Wills and trusts are two basic devices used in estate planning.

Executor

A person appointed by a testator in a will to administer the testator’s estate.

Health-care power of attorney

A document that designates a person who will have the power to choose what type of and how much medical treatment a person who is unable to make such a choice will receive.

Holographic will

A will written entirely in the testator’s handwriting.

Intestacy laws

State statutes that specify how property will be distributed when a person dies intestate (without a valid will)

Intestate

As a noun, one who has died without having created a valid will. As an adjective, the state of having died without a will.

Legacy

A gift of personal property under a will.

Legatee

One designated in a will to receive a legacy (a gift of personal property).

Living trust

A trust created by the grantor (settlor) and effective during his or her lifetime.

Living will

A document that allows a person to control the methods of medical treatment that may be used after a serious accident or illness.

Nuncupative will

An oral will (often called a deathbed will) made before witnesses. Usually, such wills are limited to transfers of personal property.

Per capita

A method of distributing an intestate’s estate so that each heir in a certain class (such as grandchildren) receives an equal share.

Per stirpes

A method of distributing an intestate’s estate so that each heir in a certain class (such as grandchildren) takes the share to which her or his deceased ancestor (such as a mother or father) would have been entitled

Probate

The process of proving and validating a will, and settling all matters pertaining to an estate.

Resulting trust

An implied trust that arises when one party holds the legal title to another’s property only for that other’s benefit.

Spendthrift trust

A trust created to protect the beneficiary from spending all the funds to which she or he is entitled. Only a certain portion of the total amount is given to the beneficiary at any one time, and most states prohibit creditors from attaching assets of the trust.

Testamentary trust

A trust that is created by will and therefore does not take effect until the death of the testator.

Testate

Having left a will at death

Testator

One who makes and executes a will

Totten trust

A trust created when a person deposits funds in his or her own name for a specific beneficiary, who will receive the funds on the depositor’s death. The trust is revocable at will until the depositor dies or completes the gift.

Trust

An arrangement in which title to property is held by one person (a trustee) for the benefit of another (a beneficiary).

Will

An instrument made by a testator directing what is to be done with her or his property after death.

Will substitutes

Various instruments, such as living trusts and life insurance plans, that may be used to avoid the formal probate process.