Thirteen Estate Planning Terms You Need to Know
Adopted in 2008, the third week in October is designated as National Estate Planning Awareness Week to bring attention to the importance of estate planning. An often overlooked aspect of financial wellness, according to the National Association of Estate Planners and Councils, it is estimated that 56% of Americans do not have an up-to-date estate plan in place.
Estate planning—it is an incredibly important tool and it is not just for the uber wealthy or those thinking about retirement. On the contrary, estate planning is something every adult should do. Estate planning can help you accomplish any number of goals, including appointing guardians for minor children, choosing healthcare agents to make decisions for you should you become ill, minimizing taxes so you can pass more wealth onto your family members, and stating how and to whom you would like to pass your estate on to when you pass away.
While it should be at the top of everyone’s to-do list, it can be an overwhelming topic to even begin to discuss, let alone dive into. To help you get situated, below are some important terms you should know as you think about your own estate plan.
Generally, anything a person owns, including a home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, art, clothing, and collectibles.
A person or entity (such as a charity) that receives a beneficial interest in something, such as an estate, trust, account, or insurance policy.
A payment in cash or asset(s) to the beneficiary, individual, or entity who is entitled to receive it.
All assets and debts left by an individual at death.
A person with a legal obligation (duty) to act primarily for another person’s benefit, e.g., a trustee or agent under a power of attorney. “Fiduciary” implies great confidence and trust, and a high degree of good faith.
The process of transferring (re-titling) assets to a living trust. A living trust will only avoid probate at the trustmaker’s death if it is fully funded, meaning it contains all of the decedent’s assets.
Unable to manage one’s own affairs, either temporarily or permanently; often involves a lack of mental capacity.
The assets received from someone who has died.
The court-supervised process of managing the assets of an incapacitated person. Conservatorship is another term used for this process.
A deduction on the federal estate tax return, it lets the first spouse to die leave an unlimited amount of assets to the surviving spouse free of estate taxes. However, if no other tax planning is used and the surviving spouse’s estate is more than the amount of the federal estate tax exemption in effect at the time of the surviving spouse’s death, estate taxes will be due at that time.
Settle an estate
The process of winding down the final affairs (valuation of assets, payment of debts and taxes, distribution of assets to beneficiaries) after someone dies.
A fiduciary relationship in which one party, known as the trustmaker or settlor, gives another party, known as the trustee, the right to hold property or assets for the benefit of another party, the beneficiary. The trust should be memorialized by a written trust agreement, outlining how the trust assets will be distributed to the beneficiary.
A written document with instructions for disposing of assets after death. A will can only be enforced through a probate court. A will can also contain the nomination of guardian for minor children.
If you have any additional questions about estate planning, or would like to consult an estate planning professional, please contact one of our estate planning/elder law attorneys. We can make sure you have a comprehensive plan that is tailored to your unique needs and goals.
For more estate planning terms and definitions, be sure to visit our previous post: Estate Planning Awareness Week
Due to the shock of the death of a spouse or a loved one, the steps of what needs to be done first can be an overwhelming process for the survivor(s). To aid in the breakdown and to act as a tool amidst the emotional days ahead, estate planning Jonathan "Jay" David has assembled a "Survivor's Checklist" of some of the important things that need to be addressed when a spouse or loved one dies.
COVID-19 Checklist & Elder Organizer Tool
For adult children responsible for their elderly parents and other senior caretakers concerned about protecting loved ones as the COVID-19 pandemic continues, below is a free downloadable checklist of steps to follow to prepare for any possible COVID-19-related illnesses among the most-vulnerable.
Foster Swift has created a free ‘Elder Organizer’ digital notebook to provide seniors and their caretakers with a toolkit that helps organize doctors’ appointments, medications, and more that can be shared online. The tools below are also available on the Elder Law Resources page.
*For those trying to access these links by smartphone, it is best practice to copy/open the link in a separate tab and download the free Google Sheets app from Google Play or the Apple Store.
- Medicaid Planning
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- Estate Planning
- Did you Know?
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- Digital Assets
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E-book Covers Estate Planning Essentials
Engaging in estate planning, while essential, is often emotional and generates many questions. How do I protect my spouse and my children if something happens to me? What happens if I become disabled before I pass on? Who will take care of my pet after I'm gone? How do I pass my business on to my children? These questions and more are addressed in Jonathan David’s recently updated e-book, “Estate Planning: You Have to Start in Order to Finish.”
Need Help Planning?
For more tools, visit our Elder Law Resource page for additional content. Click here to view/download the Foster Swift estate planning brochure to see what our experienced team of attorneys can do for you.