Estate planning is chock-full of jargon not suited for all attention spans.
The good news is that you don’t need a law degree to understand the basics. A little clarity goes a long way toward making the process less stressful and more empowering.
Here are five estate planning terms that will help you feel more confident when thinking about your future.
1. Will
A will is often the first thing people think of when they hear estate planning.
It’s a written document that explains how you’d like your property, belongings, and other assets to be distributed after your death. It also allows you to name a guardian for minor children. Without a will, the court decides who inherits your estate, which may not reflect your wishes.
Even a simple will in place provides direction for your family.
2. Trust
A trust is a tool that holds and manages assets for the benefit of chosen people, called beneficiaries (explained below).
There are many types of trusts, but a common one is a revocable living trust. With this option, you keep control of your assets during your lifetime, and after your death, the trust makes it easier to transfer property without going through probate (also explained below).
Additionally, trusts can offer privacy and flexibility, giving families more control over how and when assets are passed down.
3. Power of Attorney
A power of attorney is a document that allows you to appoint someone you trust to act on your behalf.
There are two main types. A financial power of attorney gives someone authority to manage money, pay bills, or handle property if you’re unable to. A health care power of attorney lets someone make medical decisions if you can’t speak for yourself.
Choosing the right person for these roles makes sure that your values and wishes are honored.
4. Probate
Probate is the legal process of settling a person’s estate after they pass away.
It usually involves validating the will, paying debts, and distributing property. Depending on the complexity of the estate, probate can be straightforward or lengthy. Many people create trusts specifically to avoid probate because it can be time-consuming and public.
Understanding probate helps you see why certain planning tools are so valuable.
5. Beneficiary
A beneficiary is the person or organization you choose to receive assets from your will, trust, retirement accounts, or insurance policies.
It’s important to keep beneficiary designations up to date because these designations override instructions in your will. For example, if you named someone years ago on a retirement account and never changed it, that person would still inherit the account even if your will says otherwise.
Regularly reviewing beneficiaries is a simple but crucial step in keeping your plan current.
Understanding the language of estate planning gives you confidence to start important conversations with your family and your attorney. When you know the meaning of terms like will, trust, and beneficiary, the process feels less like a maze and more like a set of choices you can make with clarity.
About McCormack Law, LLC
McCormack Law, LLC is a boutique estate planning law firm focused on delivering highly personalized, compassionate, and comprehensive estate planning services for individuals, families, and small business owners.
For more information or to schedule a consultation, please contact us today.
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