What Do Different Legal Words Mean?
You may see or hear the following terms used in connection with a deceased person’s estate. This is a probate glossary of common words.
If you’re confused about all the different legal words like “probate,” “personal representative,” “trustee,” you’re not alone. Hopefully this probate glossary will help.
| Annual Exclusion | A present interest gift that may be given each year to any number of individuals without being subject to federal gift tax. In 2022, this amount was $16,000 for a single person or $32,000 for a married couple. It will adjust periodically based on inflation. | ||
| Annuity | A contract to pay an income from a stipulated date until either the death of the annuitant(s) (the person who purchases the annuity) or a specific date in the future. | ||
| Beneficiary | The person to whom the proceeds of a life insurance contract or retirement plan benefit are payable following the death of the insured or the person designated to receive all or a portion of a trust or estate. | ||
| Bequest | A gift made under the will. It can be a particular item of the estate (specific) or one that may be satisfied out of the general assets of the estate. | ||
| Cash Value | The amount of cash available to the life insurance policy owner when a policy is surrendered to the insurance company. It is also may have been used as collateral when loans are made against a policy during the deceased person’s lifetime. | ||
| Codicil | A document that amends an existing will. | ||
| Community Property | Property owned by a husband and wife in a community property state such as Arizona. This type of property is considered belonging one-half to the husband and one-half to the wife. | ||
| Contingent Beneficiary | A secondary beneficiary who will receive any policy proceeds or portions of a trust or estate remaining unpaid upon the death of the direct beneficiary. | ||
| Corpus | The property transferred to a trust. | ||
| Devise | A transfer of real estate under a will, as distinguished from a bequest of personal property. | ||
| Disclaimer | Refusal of a beneficiary to accept property to which the beneficiary is entitled under a will or trust. | ||
| Donee | Person who receives a gift. | ||
| Donor | Person who makes a gift. | ||
| Estate Tax | A tax on the net fair market value of assets of a person who has died. Imposed by the federal government and by many states (but not Arizona). | ||
| Executor | Arizona does not use this term. But you may hear others use it because they are familiar with the law of another state. This is essentially the same as a Personal Representative, which is the person appointed by the probate court to manage an estate. See personal representative later in the probate glossary. | ||
| Executrix | Another name for a female personal representative. See personal representative further down in this probate glossary. | ||
| Fiduciary | One occupying a position of trust. For example, a personal representative, administrator, or trustee. | ||
| Grantor | A person who creates a trust; also called settlor, creator, donor, or trustor. | ||
| Inheritance Tax | A tax on the right of heirs to receive property from a deceased. As distinguished from an estate tax, the inheritance tax is a tax on an heir’s right to receive, rather than the value transferred by the deceased person. | ||
| Insurance Trust | A trust that owns life insurance. The trust may be the original applicant for the insurance, purchase existing insurance or receive policy(s) by gift from the insured. | ||
| Intestate | One who dies without a will or with an invalid will. | ||
| Joint Tenancy | Property held by two or more persons with rights of survivorship. | ||
Letters of Administration | Same as Letters Testamentary except issued for estates in which the deceased person did not have a will. | ||
Letters Testamentary | Letters issued by the Superior Court clerk to a personal representative appointed under a will, as soon as the personal representative has been appointed and has qualified. Often required to prove the personal representative’s authority to transfer assets. | ||
| Living Trust | A trust created during the grantor’s lifetime. If the trust can be changed by the grantor, it’s revocable. If it cannot be changed by the grantor, it’s irrevocable. | ||
| Marital Deduction | A deduction that allows up to 100 percent of a deceased spouse’s estate to be passed to the surviving spouse without being subject to federal estate tax. | ||
| Medical Examiner | Public officer whose principal duty is to inquire as to the cause of death; often called a coroner. | ||
Personal Representative | This is the official term in Arizona for a person named in a will to manage an estate. This person collects assets, pays debts and taxes, and distributes property under the will terms. See executor. | ||
| Policy Owner | The individual or trustee who has the right to exercise control over a life insurance contract. | ||
| Proceeds of a Policy | The net amount of money payable by the company at the death of an insured or at the maturity of a policy. | ||
| Probate | The process of proving the validity of a will in court and executing its provisions under the guidance of the court. Also, the process of identifying and notifying creditors. | ||
| Probate Court | The court that hears estate probate (for transferring assets after someone dies with a will) and intestate matters ((for transferring assets after someone dies without a will). It also handles a variety of other cases in the areas of guardianship, conservatorship, elder fraud, and physical abuse. In Maricopa County, Arizona, it is the Maricopa County Superior Court. | ||
| Residuary Estate | The remaining part of a deceased’s estate after payment of debts and specific bequests, legacies, and devises. | ||
| Special Administrator | A person appointed by the court to manage an estate prior to the appointment of a Personal Representative. The Special Administrator’s role is to collect and secure the estate. He or she cannot make distributions to heirs. | ||
Tenancy In Common | Property held by two or more persons without rights of survivorship. | ||
| Testamentary Trust | A trust created under the deceased’s will. It comes into being shortly after the grantor’s death. | ||
| Testator | A person who makes a will. This person dies testate. | ||
| Trust | A legal relationship among a trustor, a trustee, and one or more beneficiaries. A trustor is a person who establishes a trust by transferring legal title of specific assets to a trustee. A trustee is the legal owner of the property and must manage the trust property for the benefit of a beneficiary named in the trust agreement or trust provisions in a person’s will. A trustee must follow the instructions of the trust document. A beneficiary is entitled to the benefits of the trust and is usually an individual, but can be any other legal entity (e.g., charitable institution). | ||
So, there you have it. That is our probate glossary of common words used in estate planning and when a person dies. If you have any questions, just give us a call at 602-443-4888. We’re here to help.
And if you can think of a word to add to this probate glossary, please let us know.
