Many times people do not understand different terms used when creating an estate plan. Below are a few of the commonly used terms that may be helpful.
People who use a trust to arrange for future asset transfers will select a beneficiary. This is the heir that will receive financial distributions from the trust in accordance with the terms of the trust agreement.
An executor is the individual who is charged with administering the estate during the probate process. You may see the term “executrix” used from time to time, and this is a term that is sometimes used for a female individual who is serving this role.
General Durable Power of Attorney
Authorizes someone to manage your non-trust property if you become incapacitated.
The legal process of estate administration takes place under the supervision of the probate court. When you use a last will to direct the transfer of your personal property the distributions will not take place until this process has run its course.
The legal process to distribute the estate after the surviving spouse passes away. Probate may be involved in this process.
When you create a trust the individual or entity that administers the funds is called the trustee. You can choose someone that you know to serve this role, but he or she must have a good bit of business acumen. There is also the possibility of the trustee passing away if you choose a person.
Because of the above many people will arrange for a trust company to serve as the trustee.
We hope that these terms are useful to you and make understanding estate planning a bit easier. If you have any further questions about the above definitions or a different topic, please contact our office in Blue Ash at 513-712-1513 or visiting www.zimmerlawfirm.com.