Basic Estate Planning Terminology
Advanced Health Care Directive
This is the current document being used in the state of California, which appoints and names the agent you have chosen and your alternate agent, who will then act on your behalf, in medical situations, should you be unable to speak on your own behalf. The Advanced Health Care Directive gives you the power to have your wishes known about decisions regarding life support, organ donation, resuscitation and other conditions which may be terminal, vegetative states, burial or cremation decisions, and other conditions deemed to be the end stage of life. This document is used alongside the HIPAA, which we have now incorporated into the Advanced Health Care Directive (see below), This document should be included in your primary care physician’s health file, if you have one. If not, it should be kept readily available in the event you have a medical emergency. This document is included in all of our Estate Plans.
Affidavit for the Collection of Personal Property
We can provide you with this form if you are trying to close the bank account of a deceased person who has no beneficiary listed on the account, and the account has a balance in it of less than $184,500.00. If the account has even $1.00 more, the account must be probated in order for the bank to distribute the funds. Many times there is a 40 day waiting period prior to the time that this Affidavit for Collection of Personal Property can be used.
This is the person whom you have named to act on your behalf, in the Advanced Health Care Directive. An agent is also referred to as your “Attorney in Fact” in your Durable Power of Attorney.
This is a named person or entity, who receives a benefit (valuable outright or asset), through the plan of distribution in your Trust, or depending on the value of your estate, your Last Will and Testament. The beneficiary is the person or people named by you, whom you leave assets to. If no documents are in place, then your legal heir is named by the laws of Intestate Succession as identified by the probate court.
Bill of Sale Document/Assignment of Personal Property to your Trust
This document is part of your estate planning, and sells/assigns your personal property to a Living Trust. It states your intention by effectively transferring your personal effects to the estate. Items acquired after this document has been put in place, will then be transferred using your “Pour-Over Will.” It identifies your intentions with regard to your “personal effects” in the Bill of Sale. We include the Assignment of Personal Property document in all our Estate Plans.
Certificate of Trust
This document is an easy way to fund your Trust. It summarizes your Trust, and outlines pertinent information which is required, in order for a named entity to be able to add the name of your Trust to your accounts as the owner. This may also be called an “Abstract of Trust.” The document is not used for naming beneficiaries or for planning distribution of assets – it is strictly a “funding” document. We include the Certificate of Trust in all our Estate Plans.
Comprehensive Transfer Document
This document is used as an insurance policy in your newly created estate planning documents. In the event you mistakenly leave an account outside of your newly created Trust. then Diane can prepare a Heggstead Petition and file it with the court. This will inform the Judge that the “intention” of the deceased account holder or real property owner is known to the attorney via the Estate Planning documents. If a Judge approves the Heggstead Petition, then all accounts that may have been headed for the probate court, would be conformed as a asset of your Trust, and be ready for distribution without the need for probate. We include the Comprehensive Transfer Document in all of our Estate Plans.
This is a court administered process that allows for an institution or individual person to have control of a child or a person who is still a child, under the age of the designated distribution or deemed incompetent to receive proceeds from an estate in probate. Custodians are fiduciary in nature. [When creating a 529 education plan for a child, you are referred to as the Custodian of the Account. Your child is the beneficiary).
A decedent is the name given to a person who has died.
Identifies the jurisdiction where a person lives and where they intend to reside permanently.
An Estate Plan refers to set of documents, where you designate who will take charge of your estate, in the event of your passing or who acts as your agent in the event you become mentally disabled. Our Estate Plans includes the following:
• Revocable Living Trust
• Pour-Over Will (Last Will and Testament)
• Bill of Sale
• Certificate of Trust
• Durable Power of Attorney
• Comprehensive Transfer Document –
• Advanced Health Care Directive – HIPAA Authorization
• Trust Transfer Grant Deed(s)- along with PCOR, Preliminary Change of Ownership Agreement
• Business Assignment (if client owns a business)
• Time Share Assignment (if owned)
All documents will be notarized and witnessed, and Deeds will be recorded with the County Recorder’s Office.
This term identifies the person who is named to execute all conditions of your estate, all terms of the will and who will be the administrator of the estate. The probate court names the executor, upon the filing of a person’s Last Will and Testament. When there is a named executor, the probate court will have the final say in who will be the executor. The executor may also be referred to as, “personal representative.” The word executor refers to a male.
Executrix: This refers to a female, and follows the same outline as an executor.
This is a person or entity who has the ultimate responsibility for all assets of another, this person or entity acts as a steward in common law or a religious sense. A fiduciary must act faithfully when administrating another’s affairs, without regard to their own interests. A Trust fiduciary is also referred to as a Trust administrator, Estate Planning Legal Center, provides this service to many of our clients.
Funding A Trust
This refers to the transfer of assets to the trustee of a Trust, the title of assets which are to be placed in the Trust,. The assets titled in the name of the Trust, or in which the Trust is made a beneficiary thereof, will be distributed according to the terms of the Trust.
This term can refer to a Trustor, Transferor, Trustor or a Settlor of a Trust or of real property. This term describes a person who created the Trust Agreement, (through a law firm). A Grantor is a person who transfers real property, the Grantee receives the real property. This is a term commonly used when transferring real property.
This describes a person who by law, has been given the power to take care of a person or to manage a person’s property and/or their rights. The named person requires a guardian due to age, peculiarity of their status and/or lack of self control, or who is deemed to be incapable of attending to their personal affairs.
The “Health Insurance Portability and Accountability” document is something everyone should have. This should be used in conjunction with an “Advance Health Care Directive.” 1996 California law states, that a person must give written permission before any entity in the medical profession, has the right to release information about your medical records. This includes a person or people named in an Advance Health Care Directive. Your physician should have this document, and it needs to be part of your overall health care record. We include the HIPAA language in the Advance Health Care Directive which is a part of all of our Estate Plans.
This refers to a person who is without a Will at the time of their death. They have died intestate, and their property will pass to others by “Intestate Succession,” as referred to in the Law of Intestate. Going through Probate is a costly and a lengthy process when someone dies intestate.
This describes a Trust, whereby the original creator of the Trust, no longer has “control or dominion” over the assets in the Trust. The person creating this type of Trust cannot be named as a trustee, as the trustee must be able to exercise control or dominion of the assets in the Trust. This is a common strategy to protect assets from credit problems or as a strategy for tax saving purposes. This is a well known way to pass a person’s assets to beneficiaries.