Chapter 51: Wills and Trusts

Executor

A person appointed by a testator to see that his or her will is administered appropriately.

Totten trust

A trust created by the deposit of a person's own money in his or her own name as a trustee for another. It is a tentative trust, revocable at will until the depositor dies or completes the gift in his or her lifetime by some unequivocal act or declaration.

Living trust

A trust created by the grantor (settlor) and effective during his or her lifetime. Also called an inter vivos trust.

Spendthrift trust

A trust created to prevent the beneficiary from spending all the money to which he or she is entitled. Only a certain portion of the total amount is given to the beneficiary at any one time, and most states prohibit creditors from attaching assets of the trust.

Charitable trust

A trust in which the property held by a trustee must be used for a charitable purpose, such as the advancement of health, education, or religion.

Constructive trust

An equitable trust that is imposed in the interests of fairness and justice when someone wrongfully holds legal title to property. A court may require the owner to hold the property in trust for the person or persons who rightfully should own the property.

Resulting trust

An implied trust arising from the conduct of the parties. A trust in which a party holds the actual legal title to another's property but only for that person's benefit.

Will

An instrument directing what is to be done with the testator's property on his or her death, made by the testator and revocable during his or her lifetime. No interests in the testator's property pass until the testator dies.

Nuncupative will

An oral will (often called a deathbed will) made before witnesses; usually limited to transfers of personal property.

Probate

The process of proving and validating a will and the settling of all matters pertaining to administration, guardianship, and the like.

Escheat

The transfer of property to the state when the owner of the property dies without heirs.

Trust

An arrangement in which title to property is held by one person (a trustee) for the benefit of another (a beneficiary).

Per stirpes

A Latin term meaning by the roots. In the law governing estate distribution, a method of distributing an intestate's estate in which each heir in a certain class (such as grandchildren) takes the share to which his or her deceased ancestor (such as a mother or father) would have been entitled.

Per capita

A Latin term meaning per person. In the law governing estate distribution, a method of distributing the property of an intestate's estate in which each heir in a certain class (such as grandchildren) receives an equal share.

Living will

A document that allows a person to control the methods of medical treatment that may be used after a serious accident or illness.

Durable power of attorney

A document that authorizes a person to act on behalf of an incompetent personwrite checks, collect insurance proceeds, and otherwise manage the disabled person's affairs, including health carewhen he or she becomes incapacitated. Spouses often give each other durable power of attorney and, if they are advanced in age, may give a second such power of attorney to an older child.

Health-care power of attorney

A document that designates a person who will have the power to choose what type of and how much medical treatment a person who is unable to make such a choice will receive.

Bequest

A gift by will of personal property (from the verb to bequeath).

Legacy

A gift of personal property under a will.

Testamentary trust

A trust that is created by will and therefore does not take effect until the death of the testator.

Holographic will

A will written entirely in the signer's handwriting and usually not witnessed.

Codicil

A written supplement or modification to a will. A codicil must be executed with the same formalities as a will.

Intestate

As a noun, one who has died without having created a valid will; as an adjective, the state of having died without a will.

Administrator

One who is appointed by a court to handle the probate (disposition) of a person's estate if that person dies intestate (without a valid will) or if the executor named in the will cannot serve.

Testator

One who makes and executes a will

Estate planning

Planning in advance how one's property and obligations should be transferred on one's death. Wills and trusts are two basic devices used in the process of estate planning.

Intestacy laws

State statutes that specify how property will be distributed when a person dies intestate (without a valid will); statutes of descent and distribution.

Testate

The condition of having died with a valid will.

Devise

To make a gift of real property by will