Glossary of Terms
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Glossary of Terms

Bolingbrook Estate Planning & Probate Lawyer

Agent: A person who acts on behalf of another person.  Examples of agents are: executory, guardian, trustee, and power of attorney agents.

Contingent Trust (aka Testamentary Trust): This is a trust that does not yet exist, but rather is contingent or conditioned on some future event. Typically when used in a will, the future event would be the death of both parents; and upon said event the nominated trustee would then follow the terms of the contingent trust for the benefit of the deceased’s children.  

Estate: The degree, quantity, nature, and extent of interest which a person owns in real and personal property. The total property that is owned by a deceased is ultimately distributed in accordance with the terms of a will, or, when there is no will, by the state laws of inheritance.

Estate Plan: The process, during one’s lifetime, of arranging their property and estate, which takes into account the laws of taxes, insurance, property, and wills and trusts so as to gain maximum benefit while carrying out the person's wishes for the disposition of his property upon death.

Estate Tax (aka “Death Tax”): A government tax imposed on the right to transfer property by death. The tax is levied on the decedent's estate and not on the heir receiving the property.  As of 2015 the maximum estate tax rate for Illinois is 28.5%, and the maximum federal estate tax rate is 40% (subject to change by the respective governments)

Estate Tax Exemption: The amount which an estate is exempt from federal taxation. Inheritance amounts above the tax exemption thresholds are subject to the estate tax.

Executor: The person, company, or bank (as an agent) appointed by a testator to carry out the directions in his will and to dispose of his property after his death. The Executor winds up the deceased's affairs, pays bills, informs heirs, files a will, and distributes property.

Grantor: A term used to signify the person creating the trust, can also be called a settlor or trustor.

Guardian: When nominated in a will, the person (as an agent) who is vested with the power and charged with the duty of taking care (i.e., raising) of a child during his or her minority.

Inheritance Tax: A tax imposed upon the privilege of receiving property from the decedent. Not a tax on the property itself but on the right to acquire it by descent and is therefore effectively paid by the recipient. Typically a state tax; Illinois does not currently have an inheritance tax; however, Illinois does have an Estate Tax.

Intestate: The term used to identify a person who died without leaving a will. 

Intestate Descent: The law established by state statute which provides for the distribution of an estate of a person who died without a will.

Living Trust (aka Revocable Trust): A trust created, funded, and operative during the lifetime of the grantor and commonly established for the benefit of the grantor, and upon the grantor's death, for the benefit of his heirs.

Living Will (aka Advanced Health Care Directive): A document approved by state statute which provides for a direction regarding the care and treatment to be administered in the event of the inability of the principle to make decisions regarding the type of life-sustaining treatment to be administered.

Per Stirpes:  This is a legal term in Latin. An estate of a decedent is distributed “per stirpes” when each branch of the family is to receive an equal share of an estate. 

Power Of Attorney: An instrument authorizing another to act as one's agent for either property or health care decisions. The agent is attorney in fact and an agent’s power is revoked upon the death of the principal or other valid revocations.

Probate:  The process pertaining to the administration of a deceased’s estate, including the payment of debts and the distribution of the deceased's estate in accordance with the terms of the will or by intestate descent.

Testate: The term used to identify a person who died leaving a will. 

Testator: The name for a person who has written and executed a valid will.

Trust: A document whereby property is entrusted to a trustee.  A trustee may be a beneficiary of the trust, but need not be.  Some of the reasons for a trust are for tax benefits, probate avoidance, privacy, and specific gifting or inheritance planning.  There are numerous names, types, and variations of trusts, each dependent on facts and desired outcomes.  A trust on its own is simply a document; it is essential to “fund” the trust in order to receive the benefits mentioned above.

Trustee: The person, company, or bank (as an agent) named in a trust document to administer the trust property.

Will (aka Last Will and Testament): An instrument or document by which a person makes a disposition of his property, to take affect after his death, and which is revocable during his or her lifetime.  A common and important agent in a will is the nomination of a guardian for minor children.

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