Many people who are making an estate plan or who are coping with the death or incapacity of a loved one are faced with many unfamiliar legal terms. The technical language that you may be faced with as you plan for your legacy or cope with sickness or death can be very confusing and stressful.
Because of the importance of making the right decisions about incapacity and legacy planning, it is important that you get help from an experienced attorney who can explain to you how best to use legal tools to your advantage. An experienced attorney can also guide you through the probate process or through the processes that are necessary to cope with serious illness, such as guardianship or conservatorship proceedings.
Unsworth LaPlante, PLLC offers personalized help and we make the estate planning and probate processes as easy and stress-free as possible for our clients. We have also prepared a glossary of definitions of some of the most common words that you need to know to address end of life issues, legacy planning, and the issues that arise due to serious illness, injury, or death of a loved one.
Some of the key estate plan terms you need to know include the following:
A-B Trust: This is the term used for a type of trust that married couples commonly use. It makes it possible to provide financially for a spouse after your death while not giving up control over who ultimately inherits your wealth. It also allows both spouses to combine their estate tax exemptions so more money can be transferred to heirs or beneficiaries without tax being incurred.
Agent: A person with legal authority to act on someone’s behalf.
Alternative Beneficiary: An alternative beneficiary is the person you select to receive assets in the event the primary beneficiary passes away before you.
Ancillary Probate: If property is owned in a different state from where you are domiciled, ancillary probate is a secondary probate proceeding that must take place in the jurisdiction where the property is located.
Assets: Assets refers to all money, property, and wealth that you own.
Beneficiary: A beneficiary is the person who you select to receive your assets after a death.
Decedent: This term refers to a person who has passed away.
Durable power of attorney: When a power of attorney is created, a person names an agent who has legal authority to act on his behalf. The power of attorney gives designated powers, or unlimited power, to the agent to make healthcare and/or financial decisions. The power of attorney is durable if it remains in effect when its creator becomes incapacitated.
Estate: Estate refers to all assets left behind by a deceased, as well as to all of the deceased person’s debts.
Estate tax: Estate tax is a tax charged on assets that are part of a decedent’s estate at death. In some states, including Vermont, both federal and state estate taxes could be assessed.
Executor: An executor is a person chosen in a will to carry out the will’s instructions and to handle the estate administration process.
Fiduciary: A fiduciary is a person who owes the highest duty under the law to act in the best interest of another person. An executor is a fiduciary, as is a trustee and an estate planning lawyer.
Gift tax: Gift tax is a tax assessed by the state or federal government on a gift that exceeds a certain value.
Guardianship: Guardianship proceedings are necessary if an incapacitated person has not made plans for who will take control of his affairs. The court will declare the person incapacitated during proceedings and a guardianship will be created and supervised by the court.
Holographic will: A holographic will is a will that a person handwrites. It is not enforceable in Vermont.
Incapacity: Incapacity occurs when you are physically or mentally unable to make or communicate your own decisions. Guardianship could be necessary so someone can take control over your affairs if you have not made an incapacity plan.
Inheritance: An inheritance is the assets that heirs or beneficiaries receive after a death.
Inter vivos: Inter vivos refers to something that occurs while you are still alive. For example, an inter vivos gift is a gift given before your death.
Irrevocable trust: An irrevocable trust is a trust that you cannot modify or revoke after it is created. Except in limited circumstances, you will not be allowed to change the terms of an irrevocable trust.
Intestate: If you die without a will, you are said to die intestate. Intestacy law will determine who inherits your money and property.
Joint ownership: Property can be jointly owned with someone else. Depending upon what form of joint ownership you select, it is possible that the jointly owned property could transfer automatically to co-owners outside of the probate process.
Living trust: A living trust is created during your lifetime. A living trust can make it possible for you to continue controlling assets while facilitating the transfer of those assets outside of probate.
Living will: A living will provides instructions on your preferences for extraordinary medical care if you are terminally ill or seriously injured. Current Vermont law encompasses these wishes in an Advance Directive.
Medicaid: Long-Term are Medicaid is a needs-based government healthcare program that is one of the primary payer of nursing home care.
Pay on death account: A pay-on-death account is a type of account in which you provide instructions for assets to transfer automatically to a designated person outside of probate after your death.
Power of attorney: A power of attorney is a grant of authority to someone to act on your behalf. See durable power of attorney for more information.
Probate: Probate is a legal process that takes place after a death to wind up the affairs of the estate and facilitate the transfer of assets.
Revocable trust: A revocable trust, or a living trust, is a trust you create during your lifetime that you can alter the terms of. See living trust for more information.
Special needs trust: A special needs trust is a trust you create to provide for a person who is disabled, while protecting access to means-tested benefits such as Medicaid.
Trust: A trust is a legal arrangement that bifurcates ownership and possession.
Trustee: A trustee is a person who manages a trust and is responsible for distributing assets through the trust administration process after a death, in accordance with the instructions of the deceased.
Will: A will is a document that you create that allows for the transfer assets according to your instructions after death.
Getting Legal Help
Understanding the terms that apply during estate planning, probate process, and incapacity planning is just the start. You should have a caring, compassionate, and knowledgeable legal professional who can guide you through the process of making your plans for the future or responding if your loved one gets sick or passes away. Call Unsworth LaPlante at (802) 879-7133 or contact us online for help as soon as possible so our legal team can help you.