Trust & Estate
CUSTODY ACCOUNT
An agency account concerning which the main duties of the custodian (agent) are to safekeep and preserve the property and to perform ministerial acts with respect to the property as directed by the principal. The agent has no investment or managerial responsibilities. To be distinguished from managing agency account and safekeeping account.
PRE-NUPTIAL or ANTE-NUPTIAL AGREEMENT
An agreement with respect to their property made before a marriage by the parties to the marriage.
CODICIL
An amendment or supplement to a Will executed with all the formalities of the Will itself.
DURABLE POWER OF ATTORNEY
A Power of Attorney which remains effective despite the disability or incompetence of the person granting the power. Typically, a person will give such a Power of Attorney providing that it becomes exercisable only upon his disability or incompetence.
IMMEDIATE BENEFICIARY (Present Beneficiary, Primary Beneficiary)
A beneficiary of a trust who is entitled to receive immediate benefits from the trust property, whether or not limited to income; opposed to ultimate beneficiary.
PECUNIARY BEQUEST
A bequest of property that is expressed in terms of a specific dollar amount rather than in terms of a proportion of the assets involved.
LETTERS TESTAMENTARY
A certificate of authority to settle a particular estate issued by the appointing court to the executor named in the Will;
POSTHUMOUS CHILD
A child born after the father's death; to be distinguished from after-born child.
DISINHERITED CHILD (he had Pretermitted child)
A child to whom the parent's will leaves no share of his or her estate without affirmative provision in the Will showing an intention to omit. It frequently is an after-born child, a posthumous child, or a child erroneously believed to be dead or one unintentionally omitted.
PUBLIC ADMINISTRATOR
A county officer whose main official duty is to settle the estates of persons who die intestate.
POWER OF APPOINTMENT
A right given to a person to dispose of property which he does not fully own. A ___ may be general or special. Under a general power the donee may exercise the right as he sees fit. A special power limits the donee as to those in favor of whom he may exercise the ___ (same). A wife who is given the power to appoint among her children has a special ___ (same).
EQUITABLE TITLE
A right to the benefits of property which is recognized by and enforceable only in a court of equity to be distinguished from legal title.
ISSUE
All persons who descended from a common ancestor; a broader term than children.
DECLARATION OF TRUST
An acknowledgement, usually but not necessarily in writing, by one holding or taking title to property, that he holds the property in trust for the benefit of someone else.
ERISA
An acronym for the Employee Retirement Income Security Act of 1974, which set up federal minimum standards for employee benefit plans, including standards regulating the conduct of plan fiduciaries and trustees. The Act also established an insurance program designed to guarantee workers receipt of pension benefits if their defined benefit pension plan should terminate.
AMENDMENT
An addition, deletion, or change in a legal document.
HOMESTEAD
The land and buildings thereon occupied by the owner as a home for himself and family, if any, and in most states protected to some extent by statute against the claims of creditors.
DESCENDS ... HEIRS
The passing of real property by inheritance. Real property ____ to ___.
REMAINDERMAN
The person who is entitled to an estate after the prior estate has expired. For example, "I devise Blackacre to A for life remainder to B." A is the life tenant; B, the ____. Originally the term applied, and in most states still does apply, to real property only.
HEIRS-AT-LAW
The persons who inherit the real property of a person who dies without a valid Will disposing of his property.
DOMICILE
The place which a person regards as his permanent home and principal establishment; the place to which, whenever he is absent, he has the intention of returning.
GENERAL POWER OF APPOINTMENT
The power of the donee (the one who is given the power) to pass on an interest in property to whomsoever he pleases, including himself or his estate.
CORPUS (Body)
The principal or capital of a trust
FORMAL PROBATE
The probate of a Will in a formal proceeding after notice to the interested parties; opposed to probate in common form which is an informal proceeding without such notice.
ESTATE
The property of a decedent.
RESIDUARY CLAUSE
The provision in the Will or trust agreement that disposes of all of the decedent's property remaining after the payment of all taxes, debts, expenses, and charges and the satisfaction of all other gifts in the Will or trust agreement.
ABATEMENT
The reduction of a gift under will because of insufficiency of assets to satisfy all the gifts after the legal obligations of the estate (debts, taxes, charges, and claims) have been paid in full. The general rule is that all gifts of the same class shall abate proportionately, unless otherwise provided.
CLAIMS
The right to any debts, privileges, or other things in possession of another; also, the titles to anything which another should concede to, or confer on, the claimant.
MARITAL RIGHTS
The rights that a husband and wife have in each other's property.
DOMICILIARY ADMINISTRATION
The settlement of that portion of a decedent's estate which is located in the state of his domicile; to be distinguished from ancillary administration which relates to property elsewhere than in the state of the decedent's domicile.
LAST WILL
The will last executed by a person. Since all former wills ordinarily are revoked by the last one in point of time, the term is used to emphasize the fact that it is the latest and, therefore, the effective will of the maker.
MUTUAL WILLS
Wills made by two or more persons (usually but not necessarily husband and wife) containing similar or identical provisions in favor of each other or of the same beneficiary.
FEE SIMPLE
An estate of inheritance without limitation to any particular class of heirs and with no restrictions upon alienation; sometimes known as fee simple absolute; the largest interest or estate in real property a person may own.
PRETERMITTED HEIR
An heir not included in the descent or devolution of the parent's estate.
FIDUCIARY
An individual or a trust institution charged with the duty of acting for the benefit of another party as to matters coming within the scope of the relationship between them. The relationship between a guardian and his ward, an agent and his principal, an attorney and his client, one partner and another partner, a trustee and a beneficiary, each is an example of fiduciary relationship.
EXECUTOR / EXECUTRIX
An individual or a trust institution nominated in a Will and appointed by a court to settle the estate of the testator.
FUTURE ESTATE OR INTEREST
Any fixed estate or interest, except a reversion, wherein the right of possession and enjoyment is postponed until some future date or until the happening of some event.
GENERATION-SKIPPING TRUST
Any trust having beneficiaries who belong to two or more generations younger than the grantor.
DESCENDANT
One who is descended in a direct line from another, however remotely (child, grandchild, great-grand
INCOMPETENT PERSON
One who is legally incapable of managing his affairs because of mental (not physical) deficiency.
LIFE TENANT
One who owns an estate in real property for his own life or for another person's life or for an indefinite period limited by a lifetime.
CUSTODIAN
One whose duty it is to hold, safeguard, and account for property committed to his care.
PERSONALTY
Personal property.
PROBATE OF WILL
Presentation of proof before the proper officer or court that the instrument offered is the last will of the decedent.
COMMUNITY PROPERTY
Property in which a husband and wife have each an undivided one-half interest by reason of their marital status; recognized in all civil law countries, in certain states of the Southwest and Pacific Coast area of the United States, and in Wisconsin.
DISTRIBUTION
The apportionment of personal property (or its proceeds) among those entitled to receive the property according to the applicable statute of or under the terms of the Will or trust agreement; to be distinguished from DISBURSEMENT.
INCOME BENEFICIARY
The beneficiary of a trust who is entitled to receive the income from it.
REMAINDER BENEFICIARY
The beneficiary of a trust who is entitled to the principal outright after the interest of the prior beneficiary has been terminated.
PROBATE COURT
The court that has jurisdiction with respect to wills and intestacies and sometimes guardianships and adoptions;
DISTRIBUTION IN KIND
The distribution of the property itself; to be distinguished from the conversion of the property into cash and the distribution of the proceeds of such conversion.
EQUITABLE OWNERSHIP (TITLE)
The estate or interest of a person who has a beneficial right in property, the legal ownership of which is in another person.
LIFE INTEREST
The estate or interest that a person has in property that will endure only during his own or someone else's lifetime.
LAPSE
The falling of a gift into the residuary estate by reason of the death of the donee during the testator's lifetime.
JOINT TENANCY
The holding of property by two or more persons in such a manner that, upon the death of one joint owner, the survivor or survivors take the entire property;
PRECATORY WORDS
Expressions in a Will praying or requesting (but not directing) that a thing be done or not done.
FAILURE OF ISSUE
Failure, by nonexistence or death, of lineal descendants (children, grandchildren, and on down the line).
EN VENTRE SA MERE
"In mother's womb"—a child conceived but not yet born.
PRIVATE TRUST
(1) A trust created for the benefit of a designated beneficiary or designated beneficiaries; as a trust for the benefit of the settlor's or the testator's wife and children; opposed to a charitable (or public) trust. (2) A trust created under a declaration of trust or under a trust agreement; as a living trust or an insurance trust; opposed to a trust coming under the immediate supervision of a court. See also Court Trust.
RENOUNCE
(1) An act by which an individual or trust institution named under a Will as executor or trustee declines to accept such appointment. (2) The act of a surviving husband or wife under the decedent's state law declining to take the provision made for him or her under the other's will and taking his or her share of the estate had the other died without a Will. (3) Any action by which the beneficiary of any interest in real or personal property therewith refuses to accept such interest.
PRINCIPAL BENEFICIARY
(1) The beneficiary who is ultimately to receive the principal of the estate; (2) the beneficiary who is the settlor's primary concern.
CURTESY
(1) The life estate of a widower in the real property of his wife. See Dissent. (2) At common law ___ took effect only if a child capable of inheriting the property had been born of the marriage. See Dower.
ESTATE PLAN
A definite plan for the administration and disposition of one's property during one's lifetime and at one's death; usually set forth in a Will and one or more trust agreements.
CLAIM AGAINST ESTATE
A demand made upon the estate to do or to forbear some act as a matter of duty. A common example would be-the claim submitted by a creditor for a debt owed him by the decedent at the time of his death.
LIVING WILL
A document which allows a person to state in advance his or her wishes regarding the use or removal of life-sustaining or death-delaying procedures in the event of a terminal illness or injury.
POWER OF ATTORNEY
A document, sometimes witnessed and acknowledged, authorizing the person named therein to act as his agent, called attorney in fact, for the person signing the document. If the attorney in fact is authorized to act for his principal in all matters, he has a general power of attorney; if he has authority to do only certain specified things, he has a special power of attorney. If the authority granted in the power of attorney survives the disability of the principal, the attorney in fact has a durable power of attorney. If the authority granted in the power of attorney commences in the future only upon the occurrence of a specific event or contingency, the power of attorney is known as a springing power. See also Bond Power; Letter of Attorney; Stock Power.
REMAINDER
A future estate or interest in property which will become an estate or interest in possession upon the termination of the prior estate or interest created at the same time and by the same instrument. For example, A conveys Blackacre to B for life and upon B's death to C in fee simple. C's interest is a ____.
REMAINDER INTEREST
A future interest which will become an interest in possession after the termination of a prior interest created at the same time and by the same instrument as the future interest. For example, H leaves his estate in trust with income to be paid to W, and on her death the trust is to terminate and the property is to be delivered to C. C has a ____ interest.
PERSONAL REPRESENTATIVE
A general term applicable to both executor and administrator.
LEGACY ... LEGATEE
A gift of money by Will is ___; A person receiving such a gift is called ____.
PECUNIARY LEGACY
A gift of money by Will.
CHARITABLE BEQUEST
A gift of personal property to a legal charity by Will.
ABSOLUTE GIFT
A gift of property by Will which carries with it possession of and complete dominion over the property;
GIFT INTER VIVOS
A gift of property by one living person to another. To make such a gift effective, there must be actual delivery of the property during the lifetime of the donor and without reference to his death.
DEVISE
A gift of real property by Will;
CHARITABLE DEVISE
A gift of real property to a legal charity by Will.
CLASS GIFT
A gift to members of the same class, as, for example, the class consisting of the children of the same parents.
DIRECT HEIR
A person in the direct line of ascent or descent of the decedent; as, father, mother, son, daughter. See also Collateral Heir; Heir.
COLLATERAL HEIR
A person not in the direct line of the decedent from whom he inherits real property, as, for example, a nephew of the decedent who receives a share of his uncle's estate.
GRANTEE
A person to whom property is transferred by deed or to whom property rights are granted by means of a trust instrument or some other document.
HEIR
A person who inherits real property; to be distinguished from next of kin and from distributee. An heir of the body is an heir in the direct line of the decedent. A son, for example, is the heir of the body of his father or mother, See also Collateral Heir; Direct Heir; Next of Kin.
GRANTOR
A person who transfers property by deed or who grants property rights by means of a trust instrument or some other document. See also Settlor.
LIMITED POWER OF APPOINTMENT
A power of the donee (the one who has the power) to pass on an interest in property that is limited in some way—as to or for whom or to the time within which he must exercise the power; also known as special power;
EQUITY
A system of principles and rules developed to supplement and correct a system of law that had become too narrow and rigid in scope and application. Its characteristic is flexibility and its aim is the administration of justice.
MARITAL PROPERTY
A term generally referring to property acquired by either spouse during the course of the marriage, in which each spouse possesses an interest in the event of death or marital dissolution.
POUR-OVER
A term referring to the transfer of property from an estate or trust to another estate or trust upon the happening of an event as provided in the instrument.
PER CAPITA (By the head)
A term used in the distribution of property; distribution to persons as individuals (per capita) and not as members of a family (per stirpes). For example, "I give my estate in equal shares to my son A and to my grandsons C, D, and E (the sons of my deceased son B) per capita." C, D, and E take as individuals (not as the sons of B), each taking the same share as A, namely, one-fourth of the estate
PER STIRPES (by the branch)
A term used in the distribution of property; distribution to persons as members of a family (per stirpes) and not as individuals (per capita). Two or more children of the same parent take per stirpes when together they take what the parent, if living, would take. For example, "I give my estate to my son A and to my grandsons C, D, and E (the sons of my deceased son B). My grandsons are to take per stirpes." C, D and E take as the sons of B (not as individuals), each receiving one-sixth of the estate (one-third of the one-half to which B would be entitled if living), while A receives one-half of the estate. Taking per stirpes is also known as taking by right of representation. In some jurisdictions, equal shares are created at the first generation level below the transferor and representation begins at the second generation. In other jurisdictions, especially those following the Uniform Probate Code, equal shares are created at the first generation level below the transferor in which there is a living individual at the time of distribution, and representation begins at the subsequent generation.
IMPLIED TRUST
A trust created by operation of law or by judicial construction, to be distinguished from an express trust which is created by express language, oral or in writing.
CHARITABLE TRUST
A trust created for the benefit of a legal charity.
CONSTRUCTIVE TRUST
A trust imposed by a court of equity as a means of doing justice, without regard to the intention of the parties, in a situation in which a person who holds title to property is under a duty to convey it to another person;
ESTATE TRUST
A trust that is required to pay to a surviving spouse or accumulate all of its income, and whose property passes to the surviving spouse's estate at his or her death. The estate trust will qualify for the marital deduction and will be treated as a separate taxpayer for income tax purposes.
IRREVOCABLE TRUST
A trust which by its terms (1) cannot be revoked by the settlor or (2) can be terminated by him only with the consent of someone who has an adverse interest in the trust—that is, someone to whose interest it would be for the trust not to be terminated, such as a beneficiary; to be distinguished from a revocable trust with consent or approval.
HOLOGRAPHIC WILL
A will entirely in the handwriting of the testator.
DURESS
Compulsion or constraint by force or fear of personal violence, prosecution, or imprisonment which induces a person to do what he does not want to do or to refrain from doing something he has a legal right to do.
PERPETUITY
Duration without limitation as to time.
LIFE ESTATE
Either an estate for the life of the life tenant alone or an estate for the life or lives of some other person or persons. If the estate is the life of a person other than the life tenant, it is known as an estate pur autre vie.
PROBATE (verb)
To present a Will to the court for appointment of the executor or administrator, which is the first step in the settlement of an estate.
RES
Trust property is called ___
BREACH OF TRUST
Violation of a duty of a trustee to a beneficiary.
CY-PRES DOCTRINE
____ means "as nearly as may be." The doctrine, applied in English and Scots law and in some of the states of the United States, that, where a testator or settlor makes a gift to or for a charitable object that cannot be carried out to the letter, the court will direct that the gift will be made as nearly as possible, in its judgment, in conformity with the intention of the donor.
