In the backdrop of lawyers conversing in their office, this blog delves into the intricacies of “Trusts and Wills: A Basic Glossary,” aiming to unravel the legal jargon associated with estate planning.
Will
A will stands as a legal document articulating your desires concerning the distribution of your assets and the care of minor children posthumously. It constitutes a foundational element in estate planning.
Trust
A trust unfolds as a fiduciary arrangement empowering a third party, known as a trustee, to hold assets on behalf of one or more beneficiaries. Trusts boast diverse structures, specifying how and when assets transition to their intended recipients.
Beneficiary
A beneficiary, whether an individual or entity like a charity, is earmarked to receive benefits from an estate, trust, retirement account, or life insurance policy.
Estate
Comprising everything you own—real estate, bank accounts, investments, life insurance, furniture, and personal possessions—your estate’s inheritance post-mortem is dictated by your will or trust.
Executor
The executor, named in your will, shoulders the responsibility of ensuring your final wishes are fulfilled. This encompasses settling debts and taxes from your estate, subsequently distributing the remaining assets as per your directives.
Probate
Probate denotes the formal legal procedure validating a will and disbursing assets after one’s demise. It involves settling debts, taxes, and transferring asset ownership to heirs and beneficiaries.
Intestate
In the absence of a valid will, a person is deemed to have died “intestate.” In such instances, state laws dictate the distribution of the person’s assets.
Power of Attorney
A power of attorney manifests as a legal document authorizing one person (the agent or attorney-in-fact) to act on behalf of another (the principal). The agent may possess broad or limited legal authority over decisions regarding the principal’s property, finances, or medical care.
Guardianship
Guardianship emerges as a legal avenue safeguarding individuals unable to cater to their well-being due to infancy, incapacity, or disability. A court appoints a guardian to ensure legal rights are preserved and well-being is tended to.
Living Will
A living will, a written legal document, delineates the medical treatments you approve or disapprove for sustaining life when you cannot articulate your preferences.
Understanding these terms unveils some of the complexities in estate planning. Yet, it’s imperative to consult with adept attorneys or financial advisors to guarantee the safeguarding of your assets and the execution of your wishes. Estate planning is a bespoke process, and what suits one may not seamlessly fit another.
