Glossary of Terms
1031 Exchange: The sale or disposition of real estate or personal property (relinquished property) and the acquisition of like-kind real estate or personal property (replacement property) structured as a tax-deferred, like-kind exchange transaction pursuant to Section 1031 of the Internal Revenue Code and Section 1.1031 of the Treasury Regulations in order to defer federal, and in most cases state, capital gain and depreciation recapture taxes.
Administrator: Person named by the court to administer a probate estate. Also called an Executor or Personal Representative.
Advance Healthcare Directive: A legal document that gives another person legal authority to make health care decisions for you if you are unable to make them for yourself. Also called Durable Power of Attorney for Healthcare, Healthcare Surrogate, or Medical Power of Attorney.
Amended Mortgage and Promissory Note: Amendments become necessary when the lender and borrower agree to amend or change provisions of the original mortgage and note.
Ancillary Administration: An additional probate in another state. Typically required when you own assets or real estate in a state other than the state where you live that is not titled in the name of your trust or in the name of a joint owner with rights of survivorship.
Assignment of Note and Mortgage: Assignments are executed in the event either the borrower or lender chooses to assign or transfer their interest in the mortgage to a third party.
Basis: What you paid for an asset. Value used to determine gain or loss for income tax purposes.
Beneficiary: An heir at law in an intestate estate and devisees in a testate estate.
Co-trustees: Two or more individuals who have been named to act together in managing a trust’s assets. A Corporate Trustee can also be a Co-trustee.
Corporate Trustee: An institution, such as a bank or trust company, that specializes in managing or administering trusts.
Decedent: A person who has died.
Devise: A testamentary disposition of real or personal property. To dispose of real or personal property by terms of a will or a trust.
Devisee: Person designated in a will or trust to receive a devise.
Disclaim: To refuse to accept a gift or inheritance so it may be transferred to the next recipient in line. Must be done within nine months of the date of death.
Domicile: A person’s usual place of dwelling, synonymous with residence.
Durable Power of Attorney for Financial Matters: A legal document that gives another person full or limited legal authority to act on your behalf in your absence. Valid through mental incapacity. Ends at revocation, adjudication of incapacity, or death.
Durable Power of Attorney for Healthcare: A legal document that gives another person legal authority to make health care decisions for you if you are unable to make them for yourself. Also called Healthcare Proxy, Healthcare Surrogate, Medical Power of Attorney, or Advance Healthcare Directive.
Estate: The property of a decedent that is subject to administration.
Fiduciary: Person having the legal duty to act for another person’s benefit. Requires great confidence and trust and a high degree of good faith. Usually associated with a Trustee or Personal Representative.
Funding: The process of re-titling and transferring your assets to your Living Trust. Also includes the re-designation of beneficiaries to include your Living Trust as a beneficiary.
Future Advance and Consolidation: A mortgage may provide provisions to secure not only existing indebtedness, but also future advances up to a predetermined amount. The advance shall be secured under the existing mortgage.
Grantor: One who creates or adds to a trust and includes “settler,” “trustor,” or “trustmaker” and a testator who creates or adds to a trust.
Healthcare Proxy: A legal document that gives another person legal authority to make health care decisions for you if you are unable to make them for yourself. Also called Durable Power of Attorney for Healthcare, Healthcare Surrogate, Medical Power of Attorney, or Advance Healthcare Directive.
Heirs or Heirs at Law: Those persons, including the surviving spouse, who are entitled to the property of a decedent under the statutes of intestate succession.
Inter Vivos: Latin term that means “between the living.” An inter vivos trust is created while you are living instead of after you die. A Revocable Living Trust is an inter vivos trust.
Irrevocable Trust: A trust that cannot be changed or canceled once it is set up. Opposite of Revocable Living Trust. Can be created during lifetime or after death.
Intestate: Dying without a Will.
Joint Ownership: When two or more persons own the same asset.
Joint Tenants with Right of Survivorship: A form of joint ownership in which the deceased owner’s share automatically and immediately transfers to the surviving joint tenant(s) or owner(s).
Joint Tenants with Right of Survivorship: A form of joint ownership in which the deceased owner’s share automatically and immediately transfers to the surviving joint tenant(s) or owner(s).
