A Simple Guide to 10 Important Legal Terms

Codicil:

• Definition: A codicil is a legal document used to modify or amend a will without entirely rewriting it.

• Example: If you've already drafted a will but wish to change the inheritance percentages among your beneficiaries, you can create a codicil to reflect your new wishes.

Intestate:

• Definition: Intestate refers to the situation where an individual passes away without a valid will.

• Example: When someone dies without a will, state laws (intestacy laws) dictate how their assets will be distributed among heirs.

Probate:

• Definition: Probate is the legal process of administering a deceased person's estate, including validating their will, paying debts, and distributing assets.

• Example: After a person's passing, their estate goes through probate to ensure the orderly transfer of property and assets to beneficiaries.

Executor:

• Definition: An executor is an individual or entity named in a will to manage the deceased's estate, including settling debts and distributing assets.

• Example: If your will designates your eldest child as the executor, they would be responsible for carrying out your wishes after your passing.

Trustee:

• Definition: A trustee is a person or entity responsible for managing a trust and its assets for the benefit of the beneficiaries.

• Example: When you establish a trust to provide for your minor children's education, the trustee will oversee the trust's investments and disbursements.

Estate Tax:

• Definition: Estate tax is a tax levied on the transfer of a deceased person's estate to their heirs or beneficiaries.

• Example: If your estate's total value exceeds a certain threshold, your heirs may be subject to estate taxes on the inheritance they receive.

Living Will:

• Definition: A living will is a legal document that specifies an individual's preferences for medical treatment and life-sustaining measures in the event they become incapacitated.

• Example: Your living will can instruct healthcare providers to withhold life support if you are in a vegetative state and have no hope of recovery.

Power of Attorney:

• Definition: A Power of Attorney (POA) is a legal document that grants someone the authority to act on your behalf in financial or legal matters.

• Example: If you're traveling abroad and need someone to manage your real estate transactions in your absence, you can grant them a POA.

Estate Planning:

• Definition: Estate planning is the process of arranging for the management and distribution of your assets in the event of your death or incapacity.

• Example: Meeting with an attorney to create a will and designate guardians for your children is a crucial step in estate planning.

Guardianship:

• Definition: Guardianship involves a legal arrangement where a guardian is appointed to make decisions for a minor or incapacitated adult.

• Example: If a child's parents pass away, a court may appoint a guardian to ensure the child's well-being and care.