Legal Terms

                                           COMMON ESTATE PLANNING TERMS

ESTATE PLANNING is the process of preparing a strategy for transferring your assets to those you want to have them when you pass away. In addition, a proper estate plan will provide for your care during your lifetime in the event that you are incapacitated.  A good estate plan will give you the most benefit while you are alive, and pass your assets to your heirs in the least expensive and fastest manner.

A WILL is a legal document which tells the world who is to inherit your property when you die. In a will you can also name a Guardian for your minor children.

A LIVING TRUST is a legal document in which you set forth the provisions which will guide the management and distribution of the trust property (your assets), both during your life and after you die. But unlike a Will, a Living Trust avoids the time and expense of a Court supervised Probate administration. A Living Trust may also reduce taxes by, for example, preserving the Federal Estate Tax Unified Credit for both spouses.

PROBATE is the Court supervised procedure by which the assets of a deceased individual are transferred to their beneficiaries. Additionally, if the Decedent is survived by minor children, it is in Probate that the Court designates their Guardian.
        In a probate, the Court appoints an individual as the Personal Representative of the Estate.  If the Personal Representative was appointed pursuant to the Decedent's Will, they are called the called the Executor of the Estate.  Otherwise they are referred to as the Administator of the Estate.
        The Personal Representative is responsible for taking control over all of the assets of the Decedent which are subject to the probate administration, paying off the Decedent’s final debts, and distributing the balance of the assets to the Decedent’s beneficiaries, usually in accordance with the Decedent’s Will. If the Decedent had no Will, then the assets will be transferred in accordance with state Intestacy law.
        Not all property is subject to Probate. For example, life insurance, property owned in joint tenancy, property in a Living Trust, and a surviving spouse’s interest in community property may not be subject to Probate.

CONSERVATORSHIP is a Court supervised procedure by which an individual or professional entity (the Conservator) is appointed by the Court and empowered to act on behalf of an incapacitated individual (the Conservatee).  A conservatorship may be granted over the Person, over the Estate, or over both the Person and Estate of the Conservatee.

        In a Conservatorship of the Person, the Conservator is given the authority to make decisions regarding the Conservatee’s physical well being, including their medical treatment and where they are to reside.

        In a Conservatorship of the Estate, the Conservator is given the authority to take control over the assets of the Conservatee, and to manage those assets for the Conservatee’s benefit, including paying the Conservatee’s expenses.  The Conservator of the Estate must make periodic accountings to the Court, reporting all of their activities as Conservator.