Glossary of terms

Tree Ring Legal exists partly to make estate planning understandable. Documents still contain legalese, though, so these are the terms you are most likely to run into, along with what each one does in practice.

Last Will and TestamentAlso called a will

A document that must go through a legal process in a probate court to pass on property after your passing.

Trust

An alternative vehicle for estate planning. Most trusts do not have to go through a court proceeding to become effective. There are many different types of trusts, which do different things.

Revocable Trust

This type of trust is set up during your lifetime to hold property, and can be changed as many times as you want while you are living. That lets you set up a plan that evolves as your family dynamic changes. A revocable trust can even be completely dissolved by you without going through a lengthy court procedure.

Grantor

The person who establishes a trust. They decide who the beneficiaries are, who the trustee is, what property goes into the trust, and when it comes back out again.

Trustee

The person who manages the property in a trust on behalf of the beneficiaries. They are authorized to make distributions, sell property, or do anything else the grantor allows in the trust document. In a revocable living trust, the trustee and the grantor are usually the same person, meaning you.

Beneficiary

The person who enjoys the benefits of what is in a trust. They might receive a lump sum, have their needs paid for, or be allowed to live in a property. A beneficiary receives things from the trust according to the instructions left by the grantor. In a revocable living trust, a grantor can also be a beneficiary during their lifetime.

Probate

The legal process which distributes property after someone dies, typically lasting about a year in the State of Tennessee. Probate happens even if you have a will. Some plans involving trusts can reduce or eliminate the need for your family to go through it.

TestatorTestatrix, if female

The person who signs a will. A testator’s signature must be established by two independent witnesses at the time of signing to be effective.

ExecutorExecutrix, if female

The person who manages the estate during the probate process. Unlike a personal representative, they are chosen by you and named directly in your will.

Personal Representative

The person who manages the estate during probate when there is no will. Because no document nominates them, they are selected by the court, and may be a relative or a local attorney.

Per Stirpes

Any property that passes on to the next generation will be divided into equal shares based on the number of children in that generation. It also means that if a child in that generation has died, their share is automatically split evenly among that child’s descendants.

En Terrorem ClauseAlso called a contest clause

If anyone tries to file a legal challenge to your estate plan, they no longer receive their inheritance. This discourages children from challenging your plan in an attempt to substitute their own judgment for yours.

Living Will

This has nothing to do with passing property to anyone at your death. A living will is the document that instructs your doctor on how you would like life support handled if you ever become terminally and irreversibly ill.

Power of AttorneyOften shortened to POA

A document that allows someone to make decisions on your behalf. These can cover financial decisions, health care, or a limited purpose such as signing a single contract. Many people prefer powers of attorney for incapacity planning, because they let a trusted individual step into their shoes if they cannot make decisions for themselves. Powers of attorney are only effective during a person’s lifetime.