10 Estate Planning Terms That You Need to Know

10 Estate Planning Terms That You Should Know

Estate planning is an important tool for everyone, no matter their age or financial situation. With proper estate planning, you can appoint guardians for minor children, decide who will make decisions for you if you cannot, reduce taxes to pass more wealth to the next generation and state how and to whom to pass your estate when you die.

Estate planning can be a complex process with a lot of unfamiliar terms. Below are some of the most common terms you need to know when discussing estate planning. The best way to ensure your final wishes are carried out is to discuss your options with Austin and Pethick Law Firm. We focus in estate planning law.

  1. Assets: Anything you own, including – but not limited to – bank accounts, insurance, real estate, investments, art, jewelry, furniture, collectibles and clothing.
  2. Beneficiary: A person or entity (such as a charity) that receives something upon your death, including money, real estate and investments.
  3. Distribution: A payment of cash or assets to the beneficiary.
  4. Estate: Everything a person leaves upon his/her death, including assets and debt.
  5. Incapacitated/Incompetent: A state in which a person cannot manage his or her own affairs. Can be temporary or permanent. Can be mental and/or physical.
  6. Inheritance: What beneficiaries receive when someone dies. Can include money, vehicles, real estate, investments, collectibles, etc.
  7. Living probate: Managing the assets of an incapacitated person under court supervision. Also known as conservatorship.
  8. Settle an estate: The process of winding down the final affairs after someone dies. Includes valuation of assets, payment of debts and taxes and distribution of assets to beneficiaries.
  9. Trust: One party (the trust maker or settlor) gives the trustee the right to hold assets for the beneficiary. The trust should be memorialized by a written trust agreement, outlining how the assets will be distributed to the beneficiary.
  10. Will: A written document with instructions for disposing of assets after death. It can be enforced only through a probate court.

Whether you’re just starting your adult life and heading off to college or having your first child, estate planning is an essential tool for providing you and your family security and peace of mind. As you can imagine, there are a lot of factors to consider when it comes to estate planning. We will make sure that you have a comprehensive planned tailored to your needs and family dynamics to ensure your goals are accomplished, call us for a free one hour consultation. Austin & Pethick Law Firm – We are right there with you.