Estate Planning Glossary

Attorney-In-Fact: A person appointed under a Durable Power of Attorney who has the responsibility to make financial and other personal decisions on your behalf.

Beneficiary:  In the estate planning context, a beneficiary is usually a person who has an interest in a Trust or Estate.  In most cases, Trustees and Executors have a fiduciary duty to manage the Trust or Estate property for the benefit of the Beneficiaries.

Credit Shelter Trust:  A trust designed to take advantage of a Donor’s lifetime estate tax credit and minimize death taxation.  If properly funded, a married couple using tax shelter trusts can shelter at least $2 million from Massachusetts estate taxation.

Executor: A person named in a Will who, after being appointed by the Probate Court, is responsible for overseeing the distribution of a Decedent’s property and paying the estate’s valid debts.  If a person dies without a Will, the person who performs these duties is known as an Administrator.

Guardian: A person or institution appointed by the Probate Court to manage the personal affairs of minor children, people with developmental disabilities, and other people who lack the capacity.

Health Care Agent or Proxy:  A person appointed under a Health Care Proxy who has the responsibility to make health related decisions in the event of your incapacity.

HIPAA:  The Health Insurance Portability and Accountability Act of 1996.  This piece of federal legislation protects your medical records from falling into the wrong hands by requiring very specific releases before doctors and hospitals can provide your medical information to third parties.  A properly drafted Health Care Proxy will include a so-called HIPAA release.

Living Will:  Language, often contained within a Health Care Proxy, describing your wishes for end of life care and treatment.   

Living Trust / Revocable Intervivos Trust:  A trust created by a Donor during his or her lifetime, as opposed to a Testamentary Trust that is created upon death in a Donor’s Will.  A Living Trust is typically revocable, allowing the Donor to change Beneficiaries and dispositive provisions at will.

Probate:  A court-supervised process of estate distribution whereby a person’s assets are distributed to his or her heirs according to the terms of his or her Will, or, if a person dies without a Will, according to state law.

Trust:  A legal instrument, created by a Donor, whereby a Trustee agrees to hold property for a group of Beneficiaries according to set terms outlined by the Donor. Trusts can be very helpful estate and tax planning devices.

Trustee: A person or institution who manages Trust property.  Typically a Trustee owes a fiduciary duty to the Beneficiaries of the Trust.