Many people put off estate planning on the assumption that only older people sit down to do this — but it’s never too early to get your estate plans in order.
One factor that often causes individuals to delay in estate planning is because they are unsure of the documents they need to draft and all the legal jargon used in this specialized area of the law. Some of the more common terms used in estate planning are defined below.
Definitions of important estate planning terms
Some of the words highlighted below have either legal or financial implications (or both) during the estate planning process. These include:
- Testator. The individual who drafts a will.
- Personal representative. This phrase is sometimes interchanged with the word “executor.” It refers to the person who administers your estate once you pass away.
- Fiduciary. This can be your personal representative, an attorney, trustor, accountant, financial planner, or anyone else who is responsible for holding or managing assets for another.
- Assets. Anything that someone (including their estate) owns of significant monetary value.
- Liabilities. Any obligations to pay someone else (your debts).
- Codicil. An amendment to an existing will.
There are plenty of other terms that are specific to drafting a will that you’ll want to take time to learn. These may have to do with what types of wills are valid in the state and how heirs differ from beneficiaries. You may also want to learn more about how you can include a testamentary trust in your will and the benefits of appointing a guardian for your child.
There’s a lot more to know about estate planning than just the terms used as part of this process. Explore the ins and outs of this process to ensure that your final wishes are upheld in the end.