Pecuniary Gift: A gift (or “devise” or “bequest”) in a will of a stated amount of cash. (Sometimes called a “general bequest.”)
Per Stirpes: (purr stir-peas) Latin for “by roots,” by representation. The term is commonly used in Wills and Trusts to describe the manner in which assets are distribution are divided. Example, “I leave $100,000 to my daughter, Michelle, and if she predeceases me, to her children, per stirpes.” Thus, if Michelle dies before her parent, then the $100,000 will be divided among her children equally. To help understand this term, substitute the phrase “per stirpes” with “…to her children, by right of representation to share and share alike.” If there is no provision for distribution to children of a predeceased child, then the gift will become part of residue (what is left after specific gifts), and then the grandchildren may not receive a share if the testator or trustee had other surviving children.
Personal Property: Property that is not “real property” (land and buildings). Personal property can be “tangible,” meaning that the property has a physical existence and can be touched, like cars, boats, jewelry, furniture, and animals. Personal property can also be “intangible,” meaning that the value of the property is in the legal rights that are represented, like promissory notes, corporate stock, partnership interests, or patents or copyrights.
Personal Representative: In common law jurisdictions, a personal representative is the generic term for an executor for the estate of a deceased person who left a Will or the administrator of an intestate estate (when there is no Will). In either case, a Probate Court issues a finding of fact, including that a Will has or has not been filed, and that an executor or administrator has been appointed. These are often referred to as “letters testamentary”, “letters of administration” or “letters of representation”, as the case may be. These documents, with the appropriate death certificate are often the only license a person needs to do the banking, stock trading, real estate transactions and other actions necessary to marshal and dispose of the decedent’s estate in the name of the estate itself. As a fiduciary, a personal representative has the duties of: loyalty, candor or honesty and good faith. The following are all considered personal representatives: executor, executrix, administrator, ancillary administrator, public administrator, guardian and conservator.
Pour-over Will: this is a testamentary device wherein the writer of a Will creates a Trust, and decrees in the Will that the property in his estate at the time of his death shall be placed in that Trust. It is commonly included in estate plans because most people do not put all of their assets into their Trusts for reasons which may include liquidity needs, convenience, or simply because they did not get around to it before they died. A pour-over clause gives probate property to a trustee of the testator’s separate trust and must be validated either under incorporation by reference by identifying the previously existing Trust which the property will be poured into, or under the doctrine of acts of independent significance by referring to some act that has significance apart from disposing of probate assets, namely, the revocable living Trust (inter vivos trust). The testator’s property is subject to probate until such time as the pour-over clause is executed, the Trust need not be funded inter vivos (before death). The pour-over clause protects property not previously placed in Trust by pouring it into the previously established Trust through the vehicle of the Will.
Power of Appointment: A power to decide who will receive property. A power can be a “lifetime power” which is exercisable while the power holder is living, or a “testamentary power” that is exercisable only by will. A power can also be “general,” meaning that the property can be appointed to anyone (including the power holder) or “special,” meaning that the property can only be appointed to a limited group of people.
Power of Attorney (POA): A written document signed by a person (known as the “principal”) giving another person the power to act in business, legal and financial matters, including signing papers, checks, real estate deeds, title documents, contacts, handling bank accounts and other activities on behalf of the principal. The person receiving the power of attorney (known as the “agent”) is the attorney-in-fact for the principal. There are two types of power of attorney: a.) general power of attorney, which covers all activities, and b.) special power of attorney, which grants powers limited to specific matters, such as selling a particular piece of real estate, handling specific bank accounts or executing limited partnership agreements. A power of attorney. A power of attorney may expire on a date stated in the document or upon written cancellation. It may also take effect upon execution or “spring” into effect upon certain events, such as the principal’s loss of capacity. Most estate plans include a power of attorney for property management and one for medical care. (Note: A “durable power of attorney” is the type that remains effective even if the principal no longer has the ability to make decisions.)
Principal: This has two completely different meaning in the context of estates and trusts law. Principal is: (1) the property originally received by a trustee or other fiduciary, and the capital gains and reinvestments of that property, but not the income from the property; and, (2) the person executing a power of attorney.
Probate: The process by which a will is proven to be the validly executed last will of the decedent. It can also refer to the entire court-supervised administration of a decedent’s estate.
QTIP Trust: Often used in second marriages where children are involved, a QTIP trust allows the creator of the trust to determine where his or her assets will ultimately go after the second spouse dies.
Real Property: Property that is land or improvements attached to land (like buildings, streets, and gardens). Property that is not “real property” is “personal property.”
Residential Care Facilities for the Elderly (RCFEs): They include Retirement Homes and Assistant Living Homes (each facility about 30-100 beds); Residential Board and Care Homes (residential care facilities with 4-6 beds and live in staff); Skilled Nursing Facilities (also called Skilled Nursing Homes and Convalescent Hospitals), these are hospital like settings that offer skilled nursing care for about 40 – 200 plus patients; and finally, Continuing Care Facilities (also called “All-in-One” or Life Care Communities), these are usually large campuses where three levels of care (minimal services, custodial care and skilled nursing) are provided.
Residue (or Residuary Estate): The property left for distribution after all of the administration expenses, debts, taxes, and specific or pecuniary gifts have been paid or distributed.
Reverse Mortgages: This a financial product that enables older homeowners (62+) to convert the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. The loan is repaid when the borrow ceases to occupy the home. The amount owed can never exceed the value of the home. If the home sale proceeds exceed the amount owed on the reverse mortgage, the balance goes to the senior or the estate.
Senior Fraud: The deliberate use of manipulation and misrepresentation in order to benefit from the assets belonging to a senior citizen. Investment schemes, mail fraud, telemarketing scams are examples of senior fraud (Senior is one element of inheritance theft).
Settlor: The person who creates a Trust by written instrument. The Settlor usually transfers the original assets into the Trust. (Note: This person is also known as the “Trustor” in many western states, and is sometimes known as the “Donor.”)
Specific Gift: A gift (or “devise” or “bequest”) in a will of a specific piece of property, such as a specific lot or building, a specific piece of jewelry, or a certain number of shares of a specific corporation.
Special Needs Trust: A type of trust that can be set up for a disabled person. By specifying that assets are to be used only for “luxuries” and not basic care, the trust allows the disabled person’s continued eligibility for government financial aid.
Spendthrift Trust: A trust established so that the interest of a beneficiary cannot be assigned or taken away by creditors.
Surviving Spouse: A spouse that outlives the person to whom they are married, thereby obtaining legal