Estate Planning Vocabulary

By: Olivia R. Holcombe-Volke,

Estate planning documents frequently contain vocabulary that is specific to the field of estate planning, and not commonly used by the world at large. The following list, while not comprehensive of all of the confusing or unfamiliar terms within the estate planning context, are some of the words or concepts on which I have heard the most frequent questions:

HIPAA: Health Insurance Portability and Accountability Act of 1996. This law, in part, is the privacy law that prevents healthcare workers or facilities from (among other things) sharing information contained in any part of your medical record or payment history with anyone else (with a few exceptions). This term arises in estate planning in the context of an Advance Medical Directive, where you are given the option of waiving the HIPAA privacy protections as to any person you name as a potential Agent.

Power of Attorney vs. Attorney-in-Fact: A Power of Attorney is a document, where you, as the Principal, give power of attorney to your Attorney-in-Fact (also known as your Agent).

Dispositive: Most commonly used in the phrase “dispositive provisions,” this word is the adjective form of the verb “dispose” (and of the noun “disposition”). It means that the language after it is dealing with how you wish to dispose of whatever it is you are referring to – so, in the context of a Will or Trust, how you wish to dispose of your property.

Ademption: If your Will or Trust says that at your death, you wish for your diamond tennis bracelet to go to your Aunt Sue, and, at your death, there is no diamond tennis bracelet in your ownership/estate, the gift to Aunt Sue “adeems,” and Aunt Sue can’t come after your estate with any sort of claim of wrongdoing.

Remote Contingent Distribution: Where does your estate go if all of the people you’ve named to receive it are gone at your death – if they have all predeceased you? This is a highly unlikely – a “remote” possibility – and one that will only occur IF all of your named beneficiaries are gone (it is “contingent” upon that) – but it is a remote contingent possibility that should be addressed in your Will or Trust, just in case.

Personal Representative: A Personal Representative is also known as an Executor. This is the title of the person (or corporate fiduciary) who will administer an estate under a Will.

Trustee: This is the title of the person (or corporate fiduciary) who will administer a Trust.

Interested vs. Independent trustee: An Interested Trustee is, in the simplest terms, a related or subordinate party to the beneficiary of the Trust, or to the grantor of the Trust. An Independent Trustee is not an Interested Trustee.

Well-written estate planning documents will often contain a section for definitions, given the reality of there being so many terms of art. Regardless, a good estate planning attorney should be your primary and best resource for understanding what it is that your estate planning documents actually say, so that you will know that your dispositive provisions are going to be properly administered by your Personal Representative or Trustee even in the event of a Remote Contingent Distribution.

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