Estate Planning Glossary

A document stating your wishes for medical care if you cannot speak for yourself, often paired with naming a healthcare proxy to decide on your behalf.

A person or organization named to receive an asset — from a will, a trust, an insurance policy, or a retirement account.

The form on file with a financial institution naming who receives an account when you die. It passes outside your will — and overrides it.

The amount a life insurance policy pays to the named beneficiaries when the insured dies. It generally passes income-tax-free and outside probate.

A tax on the transfer of an estate at death. The federal exemption is high enough that very few estates owe it, though some states impose their own with far lower thresholds.

The person named in a will to carry it out — gathering assets, paying debts, and distributing what remains. Some states call this role a personal representative.

A permanent life insurance policy whose cash value grows based on the movement of a market index, subject to a cap on gains and a floor that limits losses.

Dying without a valid will. State law then decides who inherits, according to a fixed formula.

A trust that generally cannot be changed or revoked once established, because you have given up control of the assets placed in it.

A legal arrangement you create during your lifetime to hold your assets, so they can pass to your beneficiaries without going through probate.

A designation on a bank account that transfers the balance directly to a named person when you die, without probate.

A document authorizing someone to act on your behalf — commonly for financial matters — while you are alive but unable to act for yourself.

The court process that validates a will, settles debts, and transfers what someone owned in their own name after they die.

A trust you can change, amend, or cancel at any time while you are alive and competent.

The tax rule that resets an inherited asset’s cost basis to its value at the date of death, which can substantially reduce capital gains tax if the heir sells.

The person or institution responsible for managing a trust and following its instructions for the benefit of the beneficiaries.

A legal document directing who receives what you own in your own name, and naming a guardian for any minor children.