Estate planning comes with its own language. Here's what it all means, in plain English.
Definitions are based on the Massachusetts Uniform Probate Code (MUPC) and Massachusetts Uniform Trust Code (MUTC). This glossary is for general information only and is not legal advice.
Jump to a letter: A B C D E F G H I M P R S T V W
A
Action
With respect to an act of a trustee, an action includes the failure to act.
See MUTC.
Administration
Includes both formal and informal testate and intestate proceedings under Article III, titled "Probate of Wills and Administration."
See MUPC 190B Section 1-201(1).
Agent
Includes an attorney-in-fact under a durable or nondurable power of attorney, an individual authorized to make decisions concerning another's health care, and an individual authorized to make decisions for another under a natural death act.
Attorney-in-Fact
The individual named to step into the shoes of the person executing the document to make financial decisions on their behalf, in the event of their incapacity. The Attorney-in-Fact is named in a document known as a Durable Financial Power of Attorney.
B
Beneficiary (MUPC)
A beneficiary is someone who is set to receive something, like money, property, or benefits, from a trust, will, insurance policy, retirement account, or other legal arrangement. This can include:
- People who currently get or will get something from a trust (even if it's not guaranteed);
- People who benefit from a charitable trust;
- People named to get assets like life insurance money or retirement funds when someone dies; or
- People named in legal documents to receive gifts or have certain powers used for their benefit.
Beneficiary (MUTC)
A beneficiary is someone who has the right, now or in the future, to benefit from a trust, whether or not it's guaranteed.
Related: How can a trust protect my beneficiaries?
C
Child
A child includes an individual entitled to take as a child under the Massachusetts Uniform Probate Code by intestate succession from the parent whose relationship is involved. This definition excludes a person who is only a stepchild, a foster child, a grandchild, or any more remote descendant.
Codicil
A legal document that changes part of an existing will without replacing the entire will. It must be signed with the same formalities required for a will.
Conservator
A person appointed by the Probate and Family Court to manage money and property for someone who cannot manage those matters independently. A conservator must follow the court's instructions and typically has to file reports or accountings.
Core Plus Planning
A proprietary approach to estate planning that is designed to provide maximum value to the client while minimizing the total cost.
Related: Basics of Core Plus Planning
Credit Shelter Trust / D Trust
A trust often created after the first spouse dies. It can provide for the surviving spouse and other family members while preserving the deceased spouse's available estate-tax exemption. It is also sometimes called a bypass trust or family trust.
Related: ILITs and you
D
Declaration of Homestead
A document filed with the appropriate land records office to help protect the equity in your primary residence from certain private creditor claims. Massachusetts also provides some automatic protection, but recording a declaration may provide greater protection. It does not protect against every type of debt.
Descendant
A descendant of an individual means all of that individual's progeny of all generations, with the relationship of parent and child at each generation being determined by the definitions of child and parent contained in this glossary.
Devisee
A person or organization named in a will to receive property.
Durable Financial Power of Attorney
A document that grants legal authority to the person of your choosing to step into your shoes to make financial decisions for you in the event of your incapacity. For example, with this document in place, they can file your taxes or pay your bills.
Related: Our estate planning services
E
Estate Recovery
The process MassHealth must use to seek repayment for services it provided to a MassHealth recipient. Most commonly, they put a lien on your home and/or make a claim to your probate estate.
Related: Protecting the family home from estate recovery
Executor
A term used mostly out of state to describe the individual who has the legal authority over an estate. In Massachusetts, it is called a Personal Representative.
See Personal Representative.
F
Formal Proceedings
Probate proceedings conducted before a judge with notice to interested persons.
G
Grantor
Settlor, or the maker of a trust.
See Settlor.
Guardian
A person appointed by the Probate and Family Court to make personal or health care decisions for someone who cannot make those decisions independently. A guardian does not automatically have authority over the person's money or property.
H
Health Care Proxy
A document that grants legal authority to the person you choose to make health care decisions for you if you become unable to make or communicate those decisions yourself. Having this document avoids a guardianship proceeding.
Related: Our estate planning services
Heir
A person who would inherit under state law if someone dies without a valid will. An heir is not necessarily the same as a person named in a will.
HIPAA Authorization
A document that grants access to your medical records so that your health care proxy can make the most informed decision possible. It can be drafted to survive you, so your family can also get your medical records after your passing.
Related: Our estate planning services
I
ILIT (Irrevocable Life Insurance Trust)
An irrevocable trust designed to own a life insurance policy that is excluded from the gross estate of the grantor.
Related: ILITs and you
Incapacity Trustee
The individual who steps into the grantor's shoes to handle and administer the trust assets in the event of the grantor's incapacity. This individual is typically also named as Attorney-in-Fact under the grantor's Durable Financial Power of Attorney.
Informal Proceedings
Probate proceedings conducted without notice to interested persons by an officer of the court acting as a magistrate for probate of a will or appointment of a personal representative.
Interested Person
An interested person includes heirs, devisees, children, spouses, creditors, beneficiaries, and any others having a property right in or claims against a trust estate or the estate of a decedent, ward, or protected person. It also includes persons having priority for appointment as personal representative, and other fiduciaries representing interested persons. The meaning as it relates to particular persons may vary from time to time and shall be determined according to the particular purposes of, and matter involved in, any proceeding.
Intestate Succession
The legal rules that decide who receives your probate property if you die without a valid will. Who inherits depends on which family members survive you.
Irrevocable Trust
A trust where the settlor is not allowed to change any of the terms of the trust once it is executed. It is best understood as being "locked," in that the person who created the trust cannot change the trustees, beneficiaries, or terms of the trust.
Related: Protecting the family home from estate recovery
M
Massachusetts Estate Tax
An "extra" tax that may apply when a person dies with more than $2 million in their estate, per current thresholds. It is separate from the federal estate tax. It can be mitigated or avoided entirely through the use of a revocable trust.
Related: ILITs and you
MassHealth
Massachusetts's Medicaid program. It provides health coverage to eligible residents and may help pay for nursing-home care and other long-term care. Eligibility depends on financial, medical, and other requirements.
Related: Protecting the family home from estate recovery
MOLST
Short for Medical Orders for Life-Sustaining Treatment. A MOLST form contains medical orders about treatments such as cardiopulmonary resuscitation, breathing assistance, and hospitalization. It is generally used by people with serious health conditions, and it provides instructions to your health care proxy. It is a supplement to your advance medical directives.
P
Parent
A parent includes any person entitled to take, or who would be entitled to take if the child died without a will, as a parent under the Massachusetts Uniform Probate Code by intestate succession from the child whose relationship is in question, and excludes any person who is only a stepparent, foster parent, or grandparent.
Permissible Distributee
A beneficiary who is currently eligible to receive distributions of trust income or principal, whether the distribution is mandatory or discretionary.
Personal Representative
The individual nominated in a Will and, upon petitioning the Court, appointed by the Court to manage the probate estate pursuant to the terms of a probated Will, or pursuant to the laws of intestate succession if the decedent had no Will.
Portability
A federal estate-tax rule that may allow a surviving spouse to use the unused portion of a deceased spouse's federal estate-tax exemption. To preserve this benefit, the deceased spouse's estate generally must file a federal estate-tax return and make the required election. Massachusetts does not offer the same portability for its state estate-tax threshold.
Pour-over Will
A will that directs all of your probate assets into your trust after your passing. It acts as a backup for property that was not funded to the trust during your lifetime. Those assets must go through probate before entering the trust.
Related: What's the difference between a will and a trust?
Probate
The legal process to have the Probate Court appoint the Personal Representative to manage the decedent's estate by paying their valid debts, filing their final taxes, and distributing their probate estate to the persons named in their Will.
Related: Avoiding probate with a trust
R
Revocable Trust
A trust that is revocable by the settlor without the consent of the trustee, beneficiary, or a person holding an adverse interest.
Related: What's the difference between a will and a trust?
S
Settlor
A person who creates or contributes property to a trust, oftentimes also referred to as a "Trustmaker" or "Grantor." In the case of the most common type of trust, a revocable trust, the settlor typically has the authority to modify the trust's terms during their lifetime, to remove, replace, or appoint new or additional trustees, or to change the trust's ultimate beneficiaries.
Spendthrift Provision
A provision in a trust that helps protect trust assets from a beneficiary's creditors and prevents the beneficiary from giving away or borrowing against a future inheritance before receiving it. This precludes a beneficiary from borrowing money based on the assumption that they will receive an inheritance under a specific trust.
Related: How can a spendthrift clause in my trust protect my beneficiaries?
Step-up in Basis
A tax adjustment that generally changes the tax basis of inherited property to its fair market value when the owner dies. This adjustment may reduce the capital-gains tax owed if the property is later sold.
T
Testamentary Trust
A testamentary trust is part of the will, which must be filed with the court and is a public document. The original trustees of a testamentary trust are named in the will. After the will has been probated, the named trustee must file a bond (Form MPC 801) and a statement of confirmation of a testamentary trustee (Form MPC 275) with the Probate and Family Court.
Trust
A fiduciary relationship with respect to property, arising from a manifestation of intention to create the relationship, and subjecting the person who holds title to the property to duties to manage it for the benefit of the beneficiaries. A trust generally has three parties, a settlor, trustee, and beneficiary, and must hold at least one asset, otherwise known as the trust corpus.
Trust Funding
The process of placing assets into a trust or arranging for them to pass to the trust later. This may involve changing the name on an account, signing a deed, assigning property, or updating a beneficiary designation. Signing the trust document alone does not automatically move assets into the trust.
Related: Avoiding probate with a trust
Trustee
The trustee of a trust is best understood as the manager of the trust assets and administration. A trustee owes a fiduciary duty of loyalty to the beneficiaries of the trust, and therefore must always act in the trust's best interests. For a revocable trust, the settlors are typically the initial trustees, or co-trustees, of the trust.
V
Voluntary Administration
A simplified Massachusetts probate process for certain small estates. If the estate qualifies, a voluntary personal representative may collect and distribute the probate assets with less court involvement than a regular probate proceeding.
W
Will
Under Massachusetts law, a will includes a codicil and any testamentary instrument that merely appoints an executor, revokes or revises another will, nominates a guardian, or expressly excludes or limits the right of an individual or class to succeed to property of the decedent passing by intestate succession.
See MUPC 190B Section 1-201(57).
Related: What's the difference between a will and a trust?
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