6 Estate Planning Terms You Should Know

You recently met with an estate planning attorney or began conducting your own research on how estate planning works. You keep encountering the same terminology during the process, and you’re not exactly sure what it all means. Knowing the definitions of the most common words used in estate planning can help simplify the entire process.


Here are the six top terms you need to learn during the estate planning process:


Term #1: Settlor
The settlor is the individual who creates a trust to protect their assets and distribute them to surviving family members after they pass away. A settlor could also be called a Grantor, Trustor, or Trust-maker, and they all will refer to the same thing. Settlors are responsible for preparing the documents, and they have the power to amend the terms of a revocable living trust anytime they wish.


Settlors can create two types of trusts: revocable and irrevocable trusts. Here’s the main difference between the two:


  • Revocable Trust: You can modify the terms of a revocable trust at any time and transfer ownership of assets to and from it whenever you please. The vast majority of people will utilize a Revocable Trust as part of their estate plan and it is what most people are referring to when they mention a Trust or Living Trust.
  • Irrevocable Trust: You can’t independently modify the terms of an irrevocable trust once you create it (although you may be able to amend terms with the consent of all beneficiaries or in Court in some cases). While most people do not need an irrevocable trust, they are powerful tools when utilized to achieve a specific goal.


An experienced trust attorney in San Diego will be able to provide you with more detail regarding the unique intricacies regarding these two types of trusts.


Term #2: Trustee
The trustee is the person you designate to oversee the assets contained within a trust. They administer and uphold the terms of the trust according to your wishes. Trustees have various duties – they communicate with the beneficiaries, approve the distribution of assets, and protect any investments maintained within the trust. After setting up a revocable trust, the settlor will usually also be the Trustee so long as they are alive. The settlor will name their successors in the trust document to ensure only trusted individuals step in to control the trust when they are no longer able to. If you plan on leaving assets to your children, having an trustee that you trust is one of the leading ways to protect your children in your estate plan.


Term #3: Beneficiaries
Your beneficiaries are the people whom you decide will receive an inheritance from your estate, whether through the trust or through a direct beneficiary designation on an account. You can name beneficiaries for many different types of accounts, including life insurance policies, retirement funds, bank accounts, and more. Without beneficiaries, you’ll have no one to receive any assets left behind by your estate. Stating (with strategy) who is to inherit and how that is to happen is one of the biggest parts to any living trust and overall estate plan. Keep in mind that if something happens to one of your beneficiaries, this is a life event that should trigger you to update your estate plan.


Term #4: Heirs
If you haven’t named beneficiaries one way or another (or if all named have passed away before you), that’s when your Heirs would come into play. Heirs is a legal term defined by Probate law to essentially mean your closest living relative. It is who the law assumes you would have wanted your beneficiaries to be since you did not name any on your own. To determine your heirs, we find the closest living person in the following class of people: children, grandchildren (and down the bloodline), parents, siblings, nieces/nephews, grandparents, aunts/uncles, cousins, etc. Essentially, if there are no children, grandchildren, etc., then we move up and out your family tree until we find the closest relative to you – that is who will be your heir(s).


Term #5: Executor
Although there are several options you have to avoid probate, if your estate does need to go to probate, the executor will play an important role. The executor is the person who administers your estate (things left in your personal name, not your trust) after you pass away. In a trust based estate plan, the trustee and executor will be the same person and we will only need to use the Will (and executor role) if an asset was left out of the name of the trust for some reason. When someone leaves behind only a will, the executor ensures that assets are distributed according to the terms of the Will left by the decedent, but they must do so in Probate Court.


Term #6: Guardian
The guardian is the person you designate to raise your minor children if you and your spouse become incapacitated or pass away simultaneously. Without determining your guardianships in advance, the court system will intervene and appoint them for you. However, they could end up appointing a family member that you don’t trust, hence the need for guardianship designations.


There are three types of Guardians you can name: Person, Estate, and Temporary. A Guardian of the Person is who you want to raise the kids on a day to day basis. A Guardian of the Estate safeguards any finances left to the child personally until they are 18. As an example, a life insurance policy that has a minor child as a beneficiary will not be paid out to the minor child, it will instead be controlled by the Guardian of the Estate until the child is 18. A Temporary Guardian is someone you nominate to essentially provide basic necessities and keep your child safe until your permanent guardian can arrive to town or be appointed by a Court. Temporary Guardians are very useful when your permanent guardian choices are not close to home as they can assist with preventing children from falling into state custom in an interim period.


Estate Planning Services You Can Trust
The attorneys here at Jenkins & Jenkins, Estate Planning Attorneys in San Diego can assist you in every aspect of planning your estate. We ensure that you can accomplish all of your goals by keeping your assets secure and helping you prepare your family for the future. Schedule an appointment with us today, and one of our trusted attorneys can immediately begin drafting documents for your estate plan. 


Testimonial from Dinah, Satisfied Estate Planning Client in San Diego
I do not normally provide reviews, but the estate planning service my husband and I received from Attorney Michael Jenkins was exceptional that it prompted me to write in order to express our total satisfaction from the experience. After the first meeting, we knew that we found exactly what we were looking for to get our estate planning updated. It is akin to seeing a top-notch doctor with an outstanding bedside manner where you know that you are in good hands. Attorney Michael is as sympathetic as he is very knowledgeable, he is very articulate as he is attentive. I was impressed at how he conveyed genuine interest in our needs and was able to break down difficult aspects of estate planning into something easier for us to understand and finally, how he applied his knowledge to meet our needs. We would definitely recommend Jenkins & Jenkins for any estate planning needs. They are the best Team. We cannot thank them enough.

Michael Jenkins

Michael Jenkins

Estate planning became personal to Michael when his father passed away suddenly without any plan in place. Since that day Michael has made it his mission to educate everyone on the need for an estate plan, provide the legal advice and guidance needed, and ensure that no family is left dealing with estate issues while grieving the loss of a loved one.


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