Estate planning and the probate process have their own unique lexicon. This glossary provides terminology as it is used in California.
| A | B | C | D | E | F | G | H | I |
| J | K | L | M | N | O | P | Q | R |
| S | T | U | V | W | X | Y | Z |
| A |
Accounting – A report generated by the administrator or executor of a probate estate or the trustee of a trust administration detailing the assets, income, liabilities, and transactions of the probate or trust administration during a certain time period. A final accounting will also detail how the assets of a probate estate or trust administration should be distributed to the beneficiaries.
Administrator – The person appointed by the probate court to manage a probate estate when a person dies intestate (without a will).
Advance healthcare directive – Refer to healthcare directive.
Agent – The person appointed by a principal to make financial decisions under a financial power of attorney or health care decisions under an advance healthcare directive. In most cases, the agent only assumes authority upon the incapacity of the principal as determined by medical practitioners.
Amendment – A change to an existing will, trust, or other legal document
| B |
Basis – The purchase price of an asset. The basis can be adjusted so that it is above or below the original purchase price, depending upon whether improvements were made to the property and/or depreciation has been taken against the property.
Beneficiary – A person who is entitled to a gift or inheritance from a probate administration or from a trust administration. A beneficiary can be an intestate heir of the person who died if there is no will or trust or a person listed in the will or trust.
Bond – A legal instrument that is used to protect the beneficiaries of a probate administration or trust administration. A bond offers protections for beneficiaries that are similar to insurance for negligent or malicious conduct by a probate administrator or executor or a trustee of a trust that results in unjustified losses to the estate. The bond company will reimburse the beneficiaries the losses incurred and can pursue the fiduciary for reimbursement.
By right of representation – A legal term that indicates that assets intended for a beneficiary who predeceases the person who created the will or trust should be distributed to that beneficiary’s issue equally. “To Joe Smith by right of representation” means that if Joe died before the creator of the will or trust, Joe’s inheritance would go equally to Joe’s children if he has them, and not to his spouse.
| C |
Capital gain – A tax on the increase in value of an asset between the purchase price and the sales price.
Community property – Property owned by spouses in community property states absent a valid premarital or post-marital agreement. Community property is owned 50/50 between spouses and no one spouse can give or sell community property without the other spouse’s permission. California is a community property state.
Conservator – A person appointed by the court to make financial and health care decisions for an incapacitated adult. A conservator can be a conservator of the person and only be authorized to make personal or health related decisions. A conservator may also be a conservator of the estate, who is authorized to make only financial decisions. Often, one person serves as both types of conservator.
Contest – A legal challenge to the terms of a will or trust. It is commonplace for wills and trusts to include a no-contest clause.
Co-trustee – A person who acts contemporaneously with another trustee to administer a trust.
Creditor – A person or business that is owed money for services rendered or products delivered prior to a decedent’s death, which remains unpaid after the decedent’s death.
Creditors claim – A legal document filed by a creditor in a probate proceeding or trust administration to establish the creditor’s right to payment. A creditor’s claim must be filed in a California probate proceeding within four months after an executor or administrator is appointed or sixty days after the creditor has given notice of the probate administration by the probate fiduciary. In California, the right to collect is waived if a creditor does not take action to legally secure its claim within a year of a decedent’s death.
| D |
Dead hand control – The ability of a deceased settlor of a trust to limit how his/her assets are distributed upon the death of his/her surviving spouse. If a spouse leaves his or her assets to a surviving spouse without dead hand control, then the surviving spouse can amend how the assets are distributed and the deceased spouse must rely on the good faith of the surviving spouse to make sure his or her desires are carried out
Death tax – Refer to estate tax.
Deceased spouse – The first spouse to die in a marriage.
Decedent – A person who has died and whose estate is subject to distribution
Distribution – A gift from a trust or will or by intestate succession to a beneficiary.
Durable power of attorney – Refer to power of attorney.
| E |
Estate plan – A plan to manage ones affairs upon death or incapacity. Please click here to read our California Estate Planning FAQ.
Estate tax – A tax imposed on the transfer of wealth to a beneficiary or heir upon the death of a decedent. Under current law, no tax is paid on wealth transferred to a surviving spouse or charity, or on wealth transfers below an amount called the unified credit.
Executor – The person nominated in a will to manage the estate after the decedent dies. An executor must be appointed by a court in a probate proceeding.
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| F |
Fiduciary – One who is authorized and obligated to manage a person’s finances, the medical decisions of a person who is incapacitated, or a minor. A fiduciary also administers a probate estate or trust administration. Agents, administrators, executors, trustees, and guardians are all fiduciaries. Also refer to fiduciary duty.
Fiduciary duty – The legal obligation of a fiduciary to serve the best interests of the person who the fiduciary is serving. A fiduciary has an absolute duty of loyalty and disclosure, and may not place the fiduciary’s self-interest above that of the person the fiduciary is assisting.
| G |
General power of appointment – Similar to a limited power of appointment, except that the holder of the power of appointment can elect to give the property to himself/herself, his/her own estate or his/her creditors. Assets over which a person has a general power of appointment are considered to be part of the holder’s estate and are therefore subject to claims by the holder’s creditors.
Guardian – A person appointed by a court to act as a parent of a minor child when that minor child’s parents are both deceased. A guardian can be a guardian of the person and only be authorized to make personal or health related decisions or a guardian of the estate and only be authorized to make financial decisions. Often, one person serves as both types of guardian. In California, a guardian’s authority expires when a minor become 18 years old. Click here for a free downloadable guardianship form in PDF format.
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| H |
Healthcare directive – A document that designates who will make medical decisions on the behalf of a person who becomes incapacitated. Click here for a free downloadable copy of the California state form in PDF format.
Heir – A person who inherits property. An heir may refer to a person who is related to the decedent in some way, and who inherits when there is no will or trust in place through state law.
Holographic will – A will that is entirely handwritten. Holographic wills are valid in some states, including California. Click here to learn more about holographic wills.
| I |
Incapacity – The condition of not being able to properly manage one’s personal affairs or financial affairs, usually due to mental dementia or physical limitations.
Individual authority – When co-fiduciaries have been appointed, individual authority allows each fiduciary to act alone without the consent of the other co-fiduciary.
Inheritance tax – Refer to estate tax.
Intestate – A decedent who has died without a valid will or trust.
Intestate succession – The manner under state law in which assets of a decedent are distributed when no will or trust exists to explain the decedent’s preferences. The heirs under intestate succession depend on whether property was community property or separate property, and whether the decedent died with a spouse and/or blood relatives.
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| J |
Joint tenancy – A form of ownership for more than one person holds undivided title to property. Joint tenancy usually includes right of survivorship.
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| L |
Limited conservator – A conservatorship over the person and/or estate for a person who was incapacitated while as a minor.
Limited power of appointment – The holder of the limited power of appointment has limited authority to decide who will be the beneficiaries of a decedent’s estate. The holder may not designate himself/herself as a beneficiary. The holder is also barred from transferring the estate’s assets to his/her own estate, to his/her own creditors, or to the estates of his/her creditors. Assets over which a holder has a limited power of appointment are not considered assets of that person’s estate and are not subject to claims by the holder’s creditors.
Living trust – An estate planning document which allows its creator (called a settlor) to legally distribute his or her estate without the use of the probate court. Also referred to as an “inter vivos trust” and “revocable living trust.” Please click here for our California Living Trust FAQ.
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| M |
Minor child – A person who has not reached the age of majority. The age of majority in California is 18 years old.
| N |
No-contest clause – A clause in a will or trust that penalizes those who contest the estate in order to dissuade others from challenging the terms of a will or trust.
Notary – A person who is authorized to serve as an impartial witness to the signing of important documents. Notaries in California are regulated by the California Secretary of State.
Nuncupative will – An unwritten (oral) will. Nuncupative wills are not recognized in California.
| P |
Pay on death property – Property that by operation of law automatically goes to a beneficiary or heir upon death of a decedent without any probate proceeding. Life insurance, retirement accounts and joint accounts with right of survivorship are all pay on death property because a beneficiary is established by the holder of the asset during his or her lifetime.
Power of attorney – A legal document that provides one with legal authority to sign or make decisions on behalf of another. A durable power of attorney provides that authority in the event that a person is incapacitated. A power of attorney ends upon death. Click here for a free downloadable copy of the California state form in PDF format.
Premarital agreement – A valid legal contract between two people who intend to get married that limits or alters the default rights they would have as a married couple under state law. Click here to read our Premarital/ Prenuptial Agreement FAQ.
Prenuptial agreement or “prenup” – Refer to premarital agreement.
Principal – A person who creates a power of attorney to appoint someone to make decisions on his or her behalf, usually upon incapacity but sometimes with immediate authority.
Probate – The legal process of distributing a decedent’s assets, including validation of a will and the payment of creditors. To learn more about probate, please click here to read our Probate FAQ.
Probate referee – A person selected by the probate court to give a value to non-cash assets at the time of the decedent’s death in a probate estate, whether those assets are distributed though a will or intestate succession. To learn more about the California probate process, please click here for this article and accompanying video,.
| R |
Restatement – A complete amendment to a trust. A restatement is like a new trust, with its terms superceding the terms of a prior, existing trust. A restated trust has the same name as the prior trust, and all assets that were in the prior trust will be distributed and managed by the terms of the restated trust.
Right of survivorship – The right of a surviving joint tenant of property to automatically inherit the property of the deceased joint tenant by operation of law and without a probate proceeding. The assets held in a bank account held jointly will typically go to the surviving joint tenant by right of survivorship.
| S |
Separate property – Property held by spouses that is not community property. Separate property is only controlled by the spouse who owns the separate property. For people who are married in California, any property that they bring to the marriage is deemed separate property. However, income that is earned during the marriage and assets acquired with that income are deemed to be community property, absent a premarital agreement, postmarital agreement or transmutation agreement.
Settlor – A person who creates a trust.
Small estate – An estate of a decedent in California that consists of property that is not in a trust or has a pay on death beneficiary or subject to right of survivorship worth $150,000 or less. A small estate can be transferred to heirs or beneficiaries without the need for a complete and formal probate proceeding.
Special trustee – A fiduciary who is given limited and specific authority in a trust document usually to accomplish a specific task. A special trustee may be appointed to authorize distributions to a minor beneficiary or consent to the sale or gift or the borrowing against property.
Spousal property petition – A summary probate proceeding exclusively used to obtain an order for the distribution of property from a decedent to a surviving spouse or to recognize the existence of community property interest in an asset of a surviving spouse.
Statutory fee – A fee that is established by statute or limited by law for the services for a fiduciary.
Stepped up basis – Upon the death of a decedent, any property the decedent owns will be valued for capital gains tax purposes as if the decedent bought the property the day before he or she died. The basis (purchase price) in the property is “stepped up” to the fair market value of the property at death. This eliminates the appreciation on the property during the decedent’s lifetime for purposes of determining whether there is a capital gain upon the sale of the property.
Successor trustee – A trustee who succeeds a prior trustee upon the resignation, death, or incapacity of the prior trustee.
Surviving spouse – A spouse who survives a deceased spouse.
| T |
Tenants in common – A form of property ownership for which each owner holds a separate undivided ownership share. Upon the death of a tenant in common, the decedent’s ownership share goes to the decedent’s estate, not to the property’s co-owners as is often the case with a joint tenancy.
Transmutation agreement – A contract between spouses entered into after marriage that defines their community property and separate property estates. Click here to read our Premarital/ Prenuptial Agreement FAQ.
Trust – A legal device where a settlor transfers property to a trustee to administer for the benefit of a beneficiary.
Trustee – A fiduciary appointed by the settlor of a trust to administer the assets in the trust for the benefit of the beneficiaries listed in the trust.
Trustor – Refer to settlor.
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| U |
Unified credit – The amount of assets that each decedent may gift to other parties without the need to pay federal estate, gift or other transfer taxes. This shelter is available to all estates in the US.
Uniform transfers to minors act – A law enacted by some states, including California, that provides the means by which property is transferred to minor children. Please click here to learn how living trusts can be used to facilitate this process.
Unproductive property – Property that does not generate income in a trust, such as a personal residence, artwork, or vacant land. The property may appreciate in value, but does not generate income.
| W |
Will – A legal document that expresses how a decedent’s property should be distributed.