Demystifying Estate Planning Terms

By Mary Louden, JD, LLM | Sep 28, 2018 |

When it comes to protecting your hard-earned assets and ensuring a secure financial future for you and your loved ones, estate planning is essential. Demystifying estate planning terms will help you get more protection.

For many, particularly those with their own businesses, young families, or on the cusp of retirement, the mere mention of estate planning can sound daunting. Not only does estate planning put your future under a microscope, but the amount of financial jargon is enough to make your head spin.

However, if you get estate planning right, you and your family can reap real benefits in the years and decades to come. To help you better understand the nuts and bolts of this area of financial planning, we have compiled a comprehensive glossary of estate planning terms.

Here are your essential estate planning terms:


An individual, institution, trustee, or estate that receives, or may become eligible to receive, benefits under a will, insurance policy, retirement plan, annuity, or trust.

Beneficiary Designation

A beneficiary designation identifies the person or persons to receive certain assets at your death and may be associated with retirement plans and accounts, pension plans, and life insurance.  Assets with associated beneficiary designations are non-probate assets.


A legal document that amends an existing will.


Relating to personal finances, property, or an entire estate, a decedent refers to a person who has died.

Estate Tax

Federal or state taxes imposed on all assets owned by a person at the time of death.  Generally, only estates valued at more than the federal estate tax exemption amount pay federal estate tax. The federal gift and estate tax exemptions are unified, meaning a person may use the federal gift/estate tax exemption on transfers made during life or at death.  States may also impose a separate estate tax.

Executrix (Female) or Executor (Male)

A person nominated in a will to manage and distribute a decedent’s estate in an official capacity and as instructed in the will. This person may also be referred to as a personal representative.


An individual or institution legally obligated to act in the best interests of those for whom they are serving. It includes a person or institution serving as an executor, personal representative, trustee, guardian, and attorney-in-fact.

Generation-Skipping Transfer (GST) Tax

On the federal level, a tax is imposed on generation-skipping transfers, either as a gift or upon death, between a person and someone more than one generation removed from them. For example, this tax could apply to a grandfather and his grandchild.

Gift Tax

The federal gift tax is a tax applicable on gifts transferred from one individual to another.  At present, the gift tax is only paid beginning when the aggregate value of taxable gifts exceeds the federal gift tax exemption.

Gross Estate

The overall value, for estate tax purposes, of everything in which a person has an ownership interest at the time of his or her death.

Guardianship or Conservatorship

If a person is considered a minor or incapacitated, guardianship is granted to a trusted person to deal with or supervise all personal affairs.


An individual legally entitled to property, asset, or estate upon the decedent’s death. For example, a son and daughter are often heirs to the estate of their parents.

Intestate or Intestacy

If a person dies without leaving an official will or trust, and their estate is distributed in accordance with state law, they are known as intestate.

Irrevocable Trust

A trust that cannot be changed, modified, or amended once it is established.

Joint Ownership

A property or asset that is shared, both legally and financially, by two or more individuals.

Joint Tenancy

Similar to joint ownership, this term refers to the holding of an estate or property by two or more parties, the share of each passing to the other or others in the event of death.  Assets held in joint tenancy pass as a matter of law upon death and are not a part of one’s probate estate (and thus do not pass in accordance with a will or revocable trust).

Living Will or Advance Directive or Healthcare Directive

A document outlining a person’s desires relating to potential medical treatments they may need in future years. The statement is often drafted for protection in the event that the individual is no longer able to express informed consent at the time when care or treatment is required.

Marital Deduction

The unlimited marital deduction allows an individual to leave all or part of their assets to a surviving spouse free of estate taxes, so long as the surviving spouse is a U.S. citizen. However, if the surviving spouse’s estate exceeds the estate tax exemption at the time of his/her death, taxes will be assessed at that time.

If you get estate planning right, you and your family can reap real benefits in the years and decades to come.

Payable-on-Death Account (POD)

Arranging a POD means that in the event of death, any funds in the bank account in question can be deposited directly to the selected beneficiary, or the account itself can be transferred to them.

Physician Orders for Life-Sustaining Treatment (POLST)

A legal document intended to complement the Advanced Healthcare Directive, particularly for those who are seriously ill or have been diagnosed with a terminal illness.  The POLST is virtually a physician’s order that has been signed by both the physician and the client and describes very specific methods of life support.


Portability refers to the ability of married couples to transfer the unused applicable exclusion amount of the first spouse to die to the surviving spouse. The surviving spouse can transfer or “port” any remaining portion of the deceased spouse’s applicable exclusion amount to be applied to the survivor’s transfer taxes.

Power of Attorney for Asset Management

A legal document designating a person (the “attorney in fact”)  to make decisions about the principal’s property and finances under certain circumstances.

Power of Attorney for Healthcare

A legal document giving someone (the “attorney in fact”) authority to make decisions about the principal’s medical care when the principal is unable to make those decisions.


Probate is the legal process of validating a will, paying debts, and distributing property or assets from a decedent to his or her beneficiaries.

Revocable Trust

A trust in which the person establishing it has the power to amend or dissolve the trust during his/her lifetime. In estate planning discussions, a revocable trust is generally a document that is designed to substitute the distribution provisions of a will. A revocable trust is only effective for assets to have been transferred to it, either during life or at death.

Tangible Personal Property

This term refers to any items, including furniture, fixtures, machinery, equipment, clothes, and jewelry, which are not directly real property like land.

Tax-Deferred Plan

A retirement savings plan, including 401(k), 403(b), IRA, pension, and profit-sharing plans, that qualifies for special income tax treatment. Payments of any applicable taxes are postponed to a future date, rather than the period in which they are incurred. Many individuals obtain access to such plans through their employer, but that is far from universal.


A trustee is a person who administers a trust.


A will is an individual’s written declaration of desires or instructions for the handling of his or her probate estate after death. The will also provides for how taxes will be paid, who will administer the estate, and who will act as a guardian for any minor children of the decedent.

We hope that this glossary of estate planning terms serves as a helpful guide when it comes time to make your financial arrangements. If you need any further assistance, please do not hesitate to reach out to a member of our team.

Read more from our blog:

Let’s talk

Reach out to learn more about how our comprehensive approach to wealth management can help you achieve your goals.