Administrator. A court-appointed person who will manage your estate if you die without a will.
Attorney-in-fact. An individual designated in a power of attorney to act as the agent of the person who executed the document. Often referred to as an Agent.
Beneficiary. A person who receives benefits or funds from a will, contract, or insurance policy.
Durable Power of Attorney for Health Care. A written document in which an individual designates another person to make health care and health-related decisions in the event that the individual becomes incapacitated.
Durable Power of Attorney for Property. A written document (often referred to simply as a “Power of Attorney”) in which an individual designates another person to make his or her property and property-related decisions in the event that the individual becomes incapacitated and is unable to do so.
Estate. An individual’s property and assets.
Estate tax. A tax that is imposed at one’s death on the transfers of some types of property. This is both a federal tax and, in North Carolina, a state tax.
Executor. A person named in a will who is authorized to manage your estate when you die. The executor will collect the property, pay off any debts, and distribute your property and assets according to the terms of your will.
Fiduciary. A person or institution that is legally responsible for the management, investment, and distribution of funds. Executors, Agents, Attorneys-in-fact, and Trustees are common examples of Fiduciaries.
Gift Tax. A tax that is imposed on the transfers of some types of property as gifts or for less than full consideration. This is both a federal tax and, in North Carolina, a state tax. See discussion at Gift and Estate Tax Basics.
Grantor. The person who transfers assets to another, usually into a trust. In the context of Trusts, often referred to as a Settlor or Trustor. The terms are synonymous.
Gross estate. The total property and assets that an individual has or with respect to which the individual had the requisite level of control.
Guardian. An individual with the legal authority to care for another.
Incapacity. The lack of ability to act on your own behalf. A court or often the clerk of the superior court makes a finding of incapacity. Estate planning and Elder Law attorneys must also be adept at assessing the capacity of clients, and must be able to advise health care providers with respect to the legal standards of incapacity.
Inter vivos trust. A trust that is created during a person’s lifetime that holds property for the benefit of another.
Intestate. This is a term used to refer to a person who dies without a will.
Joint tenancy with right of survivorship. A title that is often placed on co-owned property. At the death of one owner, the other owner will be legally entitled to sole possession of the property, regardless of what provisions are made in a will.
Life estate. Also popularly called “lifetime rights”. A method of holding real property in which a person has a right to the use of the property for his life (the “life tenant”) and another person automatically receives title to the property on the death of the life tenant (the “remainderman”). There may be more than one life tenant or remainderman.
Living trust. A revocable trust established during a grantor’s lifetime that is used for the placement of some or all of the grantor’s property.
Living will. A legal document that declares what your wishes with respect to extraordinary treatment if you should become terminally ill or permanently unconscious. Synonymous with a Declaration of a Desire for a Natural Death. See discussion at Advance Directives.
Marital deduction. A federal tax deduction that allows one spouse to pass his or her estate to the other spouse without having to pay estate or gift taxes.
Power of appointment. A right given to another that allows the other to decide how to distribute your property. A “general” power of appointment allows the person named to give or “appoint” property to himself, his estate or his creditors or the creditors of his estate. A “limited” or “special” power of appointment places restrictions on who may receive distributions.
Power of Attorney. A written document that allows one person to act on behalf of another.
Probate. A process whereby a court reviews your will to make sure that it is authentic and allows others to make challenges to your will.
State death or inheritance taxes. Taxes that may be imposed by the state where you live or where your property is located after your death. North Carolina does NOT have an estate tax.
Tenancy by the Entireties. A form of property is a form of real property ownership unique to North Carolina and a small number of other states. This form of ownership is similar to Joint Tenancies with Rights of Survivorship property and applies to married couples only. In North Carolina, real property acquired by a married couple is presumed to be entireties property absent clear language in the deed to the contrary.
Tenancy in Common. A form of real property ownership by multiple owners in which each owner owns a certain fraction of the whole but has a full and complete right to the use of the property. Upon sale an owner will receive his pro rata share of the proceeds. An owner can sell, devise by will or gift his share, and can also petition a court to have the property divided among the owners (and perhaps sold).
Trust. A written document providing that your property be held by one (the “trustee”) for the benefit of another (the “beneficiary”). A trust may be created by a grantor as an inter vivos trust during the grantor’s life or after death pursuant to the terms of a will or an older inter vivos trust (after death trusts being referred to as testamentary trusts).
Trustee. A person named in a trust document who will manage the property owned by the trust and distribute the trust income or property according to the terms of the trust document. A trustee may be an individual or a business.
Will. A document that directs how your property shall be distributed upon your death.
