Estate Planning Terms (Part 1 of 2)

With so many different aspects of estate planning, it can be difficult to understand what different estate planning terms mean.  Are you new to estate planning?  If so, you may be looking for an easier way to understand some of the legal terminology.  Take a look at the guide below to learn more about estate planning.  If you have any further questions or if you want to begin your estate planning, consult with a qualified estate planning attorney.

Estate: An estate includes all assets and debts owned by an individual during his or her life or at the time of his or her death.

Estate planning: Estate planning is the process of arranging for the disposal of an estate.  This includes arranging your affairs so that your assets are distributed in the way that you wish after your death.  Estate planning can be a beneficial way to prepare for the future and can be used to protect yourself and your loved ones.

Will: A will is a legal document that allows you to appoint a guardian for your minor children, determine how your property will be distributed after your death, and choose an executor who will help to manage and distribute your property.

Trust: A trust is a legal agreement created by a grantor (trustor, trust maker, or settlor) that gives a trustee the authority to manage and legally hold the assets held in the trust.  The trustee is responsible for following all instructions outlined in the trust document and must distribute the assets in the trust to the trust’s beneficiaries as instructed.

 

Codicil: A codicil is a document that makes amendments to a will.  In some cases, an attorney utilizes a codicil instead of completely re-writing a will.  A codicil is beneficial for minor changes to a will.

If you have any questions about the above estate planning terms, consult with a qualified estate planning attorney.  And, please check out part 2 of common estate planning terms.