Helping to Define What’s In Your Estate Plan: Terms to Know
Every industry has its jargon—and estate law is no exception. But dealing with your own estate or someone else’s is complicated enough without confusing terms and phrases. In this blog, we’ll go over some of the most common things you’ll run into and what they mean. Keep reading for more information!
#1: Executor
“Executor” is one of the most important terms you’ll come across in any estate plan. You might also hear the word “executrix,” “administrator,” or “personal representative,” but they all mean the same thing: the person who is responsible for carrying out the terms of a will or handling the affairs of an estate, whether they were named by the will or they were appointed by a court.
This person is also in charge of administering the decedent's estate, and will oversee the entire process.
#2: Power of Appointment
You’ll typically see the phrase “power of appointment” in regard to a person, usually a beneficiary, who has the authority to appoint property to others.
This person is typically referred to as the holder of the power. How much power of appointment the person has depends on the specific circumstances. Sometimes, it means they can appoint property to anyone. Other times their power is limited. In some cases, this allows the person to add other beneficiaries to the trust.
#3: Issue
While the first two terms on this list were fairly straightforward, this one leaves people confused. When you come across the word “issue” in this context, it doesn’t mean a problem—it refers to lawful blood descendants - or “heirs at law” - in the first, second, or any other degree.
For reference, children constitute as lawful blood descendants in the first degree, even if they’re adopted.
#4: Settlor
Like with the term “executor,” you might hear a few different versions of “settlor,” including “grantor,” “testator,” or “testatrix.” All of these terms simply describe a person creating a legal document. Their differences come into play depending on the type of document being created. For example, a settlor or grantor is creating or contributing property to a trust.
#5: Per Stirpes
No, you didn’t read this one wrong—“per stirpes” is a Latin phrase that literally means “per branch.” Legally speaking, this refers to a method of distributing property that follows the family tree, hence the word “branch.”
For example, if your son passed away and left behind three daughters—in a “per stirpes” trust, the daughters would inherit their father’s (your son’s) portion of your estate.
Let an Expert Handle Your Estate Plan
Along with the confusing legal jargon, estate planning is rife with complicated processes and procedures. Let Kristin Waters Sullivan, an estate planning expert, handle your family legacy. She’s a Birmingham native who helps many community members with their estate planning needs, whether they’re just starting out or finally enjoying retirement. Get in touch today to set up a consultation!