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Glossary of Estate Planning & Probate Terms
Guidance from Naperville Estate Planning Attorneys
Beginning to plan your estate and entering probate are significant and complex experiences that you may not be prepared to tackle alone. The Naperville probate lawyers at the Roscich & Martel Law Firm are here to help you navigate these processes. We believe that educating our clients is one of the best ways to serve them – that is why we have provided the following glossary of important terms and phrases you might encounter while planning your estate.
We encourage you to call us at (630) 793-6337 if you have any questions or concerns about estate planning and probate.
Important Terms to Know
Agent: A person who acts on behalf of another person. Examples of agents include executory, guardian, trustee, and power of attorney agents.
Contingent trust (aka testamentary trust): This is a trust that does not yet exist, but rather is contingent or conditioned on some future event. Typically when used in a will, the future event would be the death of both parents. Upon said event, the nominated trustee would then follow the terms of the contingent trust for the benefit of the deceased’s children.
Estate: The degree, quantity, nature, and extent of interest which a person owns in real and personal property. The total property that is owned by a deceased person is ultimately distributed in accordance with the terms of a will or, when there is no will, by the state laws of inheritance.
Estate plan: The process during one’s lifetime of arranging their property and estate, which takes into account the laws of taxes, insurance, property, and wills and trusts so as to gain maximum benefit while carrying out the person's wishes for the disposition of his property upon death.
Estate tax (aka “death tax”): A government tax imposed on the right to transfer property by death. The tax is levied on the decedent's estate and not on the heir receiving the property. As of 2018 the maximum estate tax rate for Illinois is 16% and the maximum federal estate tax rate is 40% (subject to change by the respective governments).
Estate tax exemption: The amount which an estate is exempt from federal taxation. Inheritance amounts above the tax exemption thresholds are subject to the estate tax. As of 2023, Illinois is up to $4m, and the federal is $12.92M, both amounts for individuals.
Executor: The person, company, or bank (as an agent) appointed by a testator to carry out the directions in his will and to dispose of his property after his death. The executor winds up the deceased's affairs, pays bills, informs heirs, files a will, and distributes property.
Grantor: A term used to signify the person creating the trust, can also be called a settlor or trustor.
Guardian: When nominated in a will, the person (as an agent) who is vested with the power and charged with the duty of taking care (i.e., raising) of a child during his or her minority.
Inheritance tax: A tax imposed upon the privilege of receiving property from the decedent. It is not a tax on the property itself but on the right to acquire it by descent and is therefore effectively paid by the recipient. Typically a state tax, though Illinois does not currently have an inheritance tax; however, Illinois does have an estate tax.
Intestate: The term used to identify a person who died without leaving a will.
Intestate descent: The law established by state statute which provides for the distribution of an estate of a person who died without a will.
Living trust (aka revocable trust): A trust created, funded, and operative during the lifetime of the grantor and commonly established for the benefit of the grantor for the benefit of his heirs upon his death.
Living will (aka advanced health care directive): A document approved by state statute which provides for a direction regarding the care and treatment to be administered in the event of the inability of the principle to make decisions regarding the type of life-sustaining treatment to be administered.
Per Stirpes: This is a legal term in Latin. An estate of a decedent is distributed “per stirpes” when each branch of the family is to receive an equal share of an estate.
Power of attorney: An instrument authorizing another to act as one's agent for either property or health care decisions. The agent is attorney in fact and an agent’s power is revoked upon the death of the principal or other valid revocations.
Probate: The process pertaining to the administration of a deceased’s estate, including the payment of debts and the distribution of the deceased's estate in accordance with the terms of the will or by intestate descent.
Testate: The term used to identify a person who died leaving a will.
Testator: The name for a person who has written and executed a valid will.
Trust: A document whereby property is entrusted to a trustee. A trustee may be a beneficiary of the trust, but need not be. Some of the reasons for a trust are for tax benefits, probate avoidance, privacy, and specific gifting or inheritance planning. There are numerous names, types, and variations of trusts, each dependent on facts and desired outcomes. A trust on its own is simply a document; it is essential to “fund” the trust in order to receive the benefits mentioned above.
Trustee: The person, company, or bank (as an agent) named in a trust document to administer the trust property.
Trust Funding: The process of titling property, such as homes, cars, bank accounts, and other assets, into the name of a trust.
Will (aka last will and testament): An instrument or document by which a person makes a disposition of his property to take affect after his death, and which is revocable during his or her lifetime. A common and important agent in a will is the nomination of a guardian for minor children.
To request an initial consultation with our Naperville estate planning and probate attorneys, call the Roscich & Martel Law Firm at (630) 793-6337 today.
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