Estate Planning Terms - In Plain English
Estate planning isn’t just for the wealthy. It’s for anyone who wants a say in what happens to their property, money, and loved ones after they pass.
Unfortunately, estate law is full of confusing legal terms. However, the truth is, the concepts behind them are often much simpler than they may appear.
At Price Law, we believe you should never feel confused about decisions that affect your family’s future. Below, we’ll break down some of the most common estate planning terms into clear, everyday explanations.
1. Last Will and Testament (Will)
A will is a legal document that explains who receives your property after you pass away, who will serve as guardian for your minor children, and Who will manage your estate.
In simple terms: A will is your written instructions for what happens after you’re gone.
2. Probate
Probate is the legal process of settling someone’s estate after they die. The court confirms the will is valid, oversees payment of debts and taxes, and ensures assets are distributed properly
In simple terms: Probate is the court-supervised process of carrying out a will.
3. Executor
An executor is the person named in a will who is responsible for carrying out its instructions. Their duties may include filing paperwork with the court, paying debts, and distributing assets.
In simple terms: The executor is the person in charge of wrapping up your affairs.
4. Trust
A trust is a legal arrangement where one person (the trustee) holds and manages property for someone else (the beneficiary). Trusts can help avoid probate, control how and when assets are distributed, provide piracy, and offer tax advantages in certain situations.
In simple terms: A trust lets you put someone in charge of managing assets for someone else.
5. Trustee
The trustee is the person (or institution) responsible for managing the trust according to its rules. They have a legal duty to act in the best interest of the beneficiaries.
In simple terms: The trustee manages the money and must follow the instructions you set.
6. Beneficiary
A beneficiary is a person or organization who receives assets from a will, trust, insurance policy, or retirement account.
In simple terms: The beneficiary is the person who inherits.
7. Power of Attorney
A power of attorney is a document that allows someone you choose to make financial or legal decisions on your behalf if you cannot. There are different types, including durable power of attorney (remains in effect if you become incapacitated) and limited power of attorney (for specific tasks or time periods).
In simple terms: It gives someone you trust the legal authority to act for you.
8. Advance Healthcare Directive (Living Will)
An advance healthcare directive explains your medical wishes if you are unable to communicate them yourself. It may include end-of-life care decisions, life support preferences, and appointment of a healthcare proxy.
In simple terms: It tells doctors and family what medical decisions you would want.
9. Intestate
If someone dies without a valid will, they are said to have died “intestate.” When this happens, state law decides who inherits and how much they receive.
In simple terms: No will means the state makes decisions for you.
10. Estate Tax
Estate tax is a tax that may apply to large estates when someone dies. Not all estates are subject to this tax, and thresholds vary under federal and state law.
In simple terms: Very large estates may owe taxes before assets are distributed.
Estate planning is about more than documents; it’s about protecting the people you care about and reducing stress during an already difficult time.
If you have questions about your estate plan (or haven’t created one yet) Price Law is here to guide you. We focus on making complex legal concepts understandable so you can make confident, informed decisions about your future.