Estate Planning Legal Glossary

AB Trust: A revocable trust designed to assure that the personal estate tax exemption of each spouse is used to maximum advantage.

Administrator: A person appointed by the Probate Court to handle the affairs of the deceased’s estate. An administrator is appointed when the deceased did not leave a will appointing an executor.

Annual exclusion: The amount a person may gift each year without the need to pay a gift or estate tax.

Assets: Items of value. Assets may be in the form of real property, personal property, or financial assets.

Attorney-in-Fact: An individual designated in a power of attorney document, appointed to act as the agent of the person who has executed the power of attorney.

Basic Will: A simple will that distributes your assets to your spouse, children, or other designee.

Beneficiary: A person named to receive income or assets in a will or trust.

Codicil: A document which serves to modify the original provisions of a prior will. A codicil is an amendment to a will.

Deceased/ Decedent: A person who has died.

Durable Power of Attorney for Health Care: A written document in which a person names an individual to make health care related decisions for them in the event that they are no longer able to do so for themselves.

Durable Power of Attorney for Property: Same as above, except the decisions being made are property related.

Escheat: An assignment of property to the state because there is no verifiable legal owner or beneficiary.

Estate: Everything of value that a person owned at the time of death.

Estate tax: A tax placed on the net value of a decedent’s estate at the time of death.

Executor or Executrix: A person named in the decedent’s will to serve as the personal representative in probating the decedent’s estate.

Fair market value: The market price for an asset as would be agreed to by a willing buyer and a willing seller.

Fee simple ownership: Property ownership where the owner holds the entire ownership interest.

Fiduciary: A person or institution that is legally responsible for the management, investment, and distribution of funds of another (i.e. the trustee identified in a trust).

Gift: A voluntary transfer of property for which nothing of value is received in return.

Gifting: An estate planning tool used to implement an estate plan by making gifts to intended successors of assets owned by the person making the gifts.

Grantor: The person placing property in a trust.

Heir: A person entitled by law to inherit part or all of the estate of a decedent when the decedent did not leave a valid will.

Holographic: A will entirely handwritten by the testator. The date and all words in the will, including the signature must be handwritten by the testator. The signature of the testator may or may not be witnessed.

Irrevocable Trust: A trust that is not amendable or revocable by the grantor. Normally created during a grantor’s lifetime.

Inheritance tax: A tax levied by the county of residence of a person who inherits something from a will. The rate of taxation applied will vary on the size of the inheritance and the relationship between the person who inherits and the deceased. Ohio currently does not have an estate tax.

Intangible property: Property that is not real or personal property. Intangible property represents only real value (i.e. bank accounts or promissory notes).

Irrevocable trust: A trust that cannot be changed after it has been established.

Joint tenancy: A form of joint ownership by two or more persons in which each person has an equal undivided ownership interest that passes directly to the surviving joint tenant(s) upon the death of any joint tenant.

Lateral succession: Succession in property ownership in which the property is transferred between members of the same generation.

Letters of Authority: A document issued by the probate court which formally appoints the administrator or executor and gives him the authority to administer the estate.

Liabilities: The amounts owed to another by any person, family, or business (i.e. a mortgage).

Living trust: A trust established during the lifetime of the grantor which is usually a revocable trust.

Marital deduction: An unlimited deduction against the estate and gift tax for transfers made outright or in qualifying trusts to the spouse of the transferor.

Personal representative: An executor, administrator, or anyone else who has been appointed by the Probate Court to manage the property of an estate or person.

Probate: A court procedure used for settling the personal and business affairs of a decedent. The procedure includes proving the validity of a will, transferring property to the beneficiaries, and paying the debts of the estate.

Revocable trust: A trust that can be changed after it has been established. A revocable trust becomes irrevocable upon the death of the grantor.

Sound mind:
To be of sound mind means:

1. That the testator understands the act of making a will; and
2. That the testator understands what property is being included in the will; and
3. That the testator understands the proposed disposition of that property; and
4. That the testator knows and recognizes his or her heirs.

Tangible property: Property that is capable of being touched.

Testator: One who writes and signs a will.

Trustee: A person named in a trust to manage property for the benefit of the beneficiary.

Undivided interest: The interest in property that is owned by each joint tenant.

Will: A declaration made by a person, prior to death, that states how that person wants their estate to be divided. Ohio Law requires a will, to be valid, to be witnessed by two persons who are not beneficiaries under the will.