13 Estate Planning Terms You Need to Know

Estate planning—it is an incredibly important tool, not just for the uber-wealthy or those thinking about retirement. It is a tool every adult should utilize. Estate planning can help you accomplish any number of goals like appointing guardians for minor children. Or choosing healthcare agents to make decisions for you should you become ill. And even minimizing taxes to ensure you pass more wealth onto your family members. Ultimately, allowing you to define how and to whom you wish to distribute your estate once you pass away. Inconclusion, estate planning should be at the top of everyone’s to-do list. Unfortunately, it can be an overwhelming topic to dive into if you are unfamiliar with the language. So—to help you get situated, below are some estate planning terms you should know as you think about your estate plan.


Assets are anything a person owns. Examples of assets include bank accounts, life insurance, investments, a home or other real estate, furniture, jewelry, art, clothing, and collectibles.


A beneficiary refers to someone or thing [entity such as a charity], who receives the benefits of an agreement such as an estate, trust, account, or insurance policy.


Distribution refers to a payment in cash or asset(s) to the beneficiary, individual, or entity who is entitled to receive it.


Estate is a collection of all assets and debts left by an individual at the time of their death.


A fiduciary is an estate planning term that implies exceptional confidence, trust, and a high degree of good faith. Being said, a fiduciary is someone with a legal obligation (duty) to act on behalf of another’s benefit. The most common examples are trustees and agents under a power of attorney.


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. Which means the trust contains all of the decedent’s assets.


Incapacitation refers to the state in which someone is unable to act on his or her behalf. This state may be a temporary or permanent lack of mental capacity.


Inheritance refers to all assets received from someone who has died.

Living probate

Living probate is a court-supervised process of managing the assets of an incapacitated person. The term is interchangeably known as conservatorship.

Marital deduction

A marital deduction is an estate planning term to define a reduction on the federal estate tax return, allowing the first spouse that dies to leave an unlimited amount of assets to the surviving spouse free of taxes.

Settle an estate

Settling an estate is the process of winding down the final affairs after someone dies. The process includes the valuation of assets, payment of debts and taxes, and distribution of assets to beneficiaries.


A fiduciary relationship in which someone [trustmaker or settlor] gives another party [trustee] the right to hold property or assets for the benefit of another party [beneficiary]. The trust should be reflected by a written trust agreement, describing how the trust assets will be distributed to the beneficiary.


A will is a written document that can only be enforced through probate court. A will states clear instructions for disposing of assets after death, and can contain the nomination of a guardian for minor children.

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