Estate planning terms defined

| Oct 29, 2019 | Estate Planning

We’ve talked about the importance of having a will and protecting your assets in a trust. When speaking of estate planning and of the people named to ensure our wishes are carried out there are many terms we use. Some people use the terms interchangeably.

But there are specific terms for specific duties. In this post we break down those terms and what they mean.

 

Decedent: The person who died. 

Testator: The maker of the will.

Intestate: When a person dies and leaves no will.

Executor: An executor is the person named in the will who is to carry out the terms of the will. The executor makes sure debts are paid and assets go to the people they are meant for, as stipulated in the will. Sometimes this role is known as the personal representative.

Trustee: The trustee or trustees are those people named in a trust to administer the property. Trustees are different than executors in that they manage the business affairs. Executors take on role of simply distributing, rather than managing, the assets.  

Personal representative: After a person dies, the person who administers the estate is known as the personal representative or executor. If there is no will then the person who pays the debts and distributes the assets is called an administrator.  

Healthcare power of attorney: When a person makes a will, they will typically name a family member or close friend as their healthcare power of attorney (POA). This person makes sure healthcare providers are aware of and follow the wishes of the testator is the testator is incapacitated.

For example, if the testator says they would like heroic measures to be taken to save their life, then the healthcare POA should communicate this to the healthcare team. Likewise, if the testator is clear that they only want to be kept comfortable and do not want to be on a ventilator or have IV nutrition, those wishes must be also honored.

Durable financial power of attorney: When making a will, the testator can name someone to take care of their finances should they become incapacitated. For example, if the testator has stroke, or suffers from dementia someone else can then pay bills and collect debts owed. The financial POA can be allowed to sell real property (such as a house), give monetary gifts, or not depending on what the testator states in their will.

It can be very helpful to understand not only the terms used in estate planning but also the responsibilities of those named, whether you are creating your own will or named in someone else’s.