California Legal Dictionary

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A-B Trust

A-B trust is a trust that is divided into separate parts upon the death of the first spouse. It is formed with each spouse placing assets in the trust and naming as the final beneficiary.

Account

Accounts typically include a statement of receipts and disbursements of principal and income, a statement of assets and liabilities, the fiduciary’s compensation, notice of any agents hired by the fiduciary, their relationship…

Adult Protective Services

Adult Protective Services is a government social services agency charged with the protection of abused, neglected, or exploited older adults and adults with significant disabilities.

Agent

Agent: a person that has express written authority to act for another (the principal) so as to bring the principal into contractual relations with others.

Attest

Attest: to confirm in writing that a will is genuine; to bear witness to attest that a will was signed and declared to be a will.

Attestation

Attestation: The act of witnessing the signing of a will for the purpose of declaring that the will was properly signed and declared by the signer to be his or her signature.

Attorney-In-Fact

Attorney-In-Fact: In a “general power of attorney,” the attorney-in-fact can conduct all business and personal matters and sign any documents.

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Benefactor

Benefactor: is a person or entity that supports another person or entity by giving funds or property.

Beneficiary

Beneficiary: a person entitled to any income or principal of an estate or trust or other contract (such as a life insurance contract or retirement plan).  Beneficiaries can have present interest or future interests.

Beneficiary Designation

Beneficiary Designation: you many name any person or institution as a beneficiary of your bank account, brokerage account, retirement plan (including an IRA or and 401k), annuity contract, life insurance policy and other similar financial accounts.

Bequest

Bequest: To give or leave property or assets by will to an individual or charity. A bequest may be for a specific amount or percentage of the estate.

Breach of Trust

Breach of Trust:failure of the trustee to fulfill required duties. Includes doing things illegally, negligently or forgetfully..

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Charitable Lead Trust

Charitable Lead Trust: a trust (for a fixed term) in which a charity is the income beneficiary and the remainder or principal (at the end of the term) is given to a non-charitable beneficiary.

Charitable Shelter Trust

Charitable Shelter Trust: a taxable trust funded with the credit shelter amount.  Frequently, this type of trust is used to provide benefits to a decedent’s surviving spouse, while avoiding inclusion in that spouse’s gross estate.

Children’s Trust

Children’s Trust:  a document that controls when your children will be able to access the money you’ve left them. Frequently, the trust provides for equitable payment of college cost for each child. Then assets are distributed as you direct.

Coercion

Coercion: The improper use (or threat of improper use) of authority, economic power, physical force, or other such advantage, by a party to compel another to submit to the wishes of its wielder.

Contingent Beneficiary

Contingent Beneficiary: a person who may share in an estate or trust depending upon the happening of an event. For example, a person who must reach the age of 25 before receiving anything from a trust is a contingent beneficiary.

Custodian of the Will

Custodian of the Will:  the person who has possession of the will when the person who wrote it dies.

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Decedent

Decedent:  an individual who has passed away.

Diminished Capacity

Diminished Capacity: although the testator was not incapacitated, due to emotional distress, physical condition, mental infirmity or other factors, he could not fully comprehend the nature of his testamentary act.

Disbursement

Disbursement: the transfer of assets from estate or trust to creditors.

Disclaim

Disclaim: to refuse to accept (or renounce) a gift or benefit.

Distribution

Distribution: the transfer of assets from an estate or trust to beneficiaries.

Donee

Donee: the recipient of a gift.

Donor

Donor:  one who makes a gift or one who creates a trust.

Durable Power of Attorney for Health Care

Durable Power of Attorney for Health Care: this instrument is used to appoint a person you designate to make decisions regarding your health care treatment in the even that you are unable to provide informed consent.

Duress

Duress: the use of force, false imprisonment or threats (and possibly psychological torture or “brainwashing”) to compel someone to act contrary to his or her wishes or interests.

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Executor

Executor: The person nominated by the decedent and appointed by a probate court to administer the estate of a decedent who leaves a will. The executor must ensure that the decedent’s desires as expressed in the will are carried out.

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Fiduciary

Fiduciary: an executor, administrator, trustee, guardian, conservator, attorney-in-face, or other person who must manage property or exercise rights or powers for the benefit of others which gives rise to a relationship of trust and confidence.

Fiduciary Duties

Fiduciary Duties:  a fiduciary duty is the highest standard of care at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom he owes the duty (the “principal”).  He must not put his personal interest before the duty, and must not profit from his position as a fiduciary, unless the principal consents.

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Gift

Gift: a gift is anything voluntarily transferred by one person to another without compensation.

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Health Care Power Of Attorney

Health Care Power Of Attorney: a document that clearly states what your wishes are if you find yourself needing medical care and you cannot represent yourself. You appoint an agent who will act on your behalf to make sure your wishes are followed.

Heir

Heir: one who inherits, or is entitled to succeed to the possession of, any property or funds after the death of its owner.  One on whom the law bestows the title or property of another at the death of the latter.

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Irrevocable Life Insurance Trust

Irrevocable Life Insurance Trust: a document that removes the value of your life insurance from your taxable estate. You choose a trustee. The trustee makes sure the policy premiums are paid and that your beneficiaries receive proceeds at your death.

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Power of Attorney

Power of Attorney:  a power to decide who will receive property. A power can be “lifetime power,” which is exercisable while the power holder is living, or a “testamentary power” that is exercisable only by will.

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Taxable Estate

Taxable Estate:  the total assets that will be taxed at y our death. To calculate your taxable estate, you first determine your “gross estate,” then subtract any marital or charitable deductions.

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