Glossary
Advance Directive
An umbrella term for documents that state health care wishes or authorize another person to make health care decisions. A health care proxy and living will are common advance directives.
Agent
A person authorized to act for someone else. Under a power of attorney, the agent handles financial and legal matters; under a health care proxy, the person making medical decisions is usually called the health care agent.
Annual Exclusion Gift
A gift that qualifies for the federal gift-tax annual exclusion, allowing a donor to give up to the applicable annual amount to each recipient without using federal lifetime gift-and-estate tax exemption. The amount can change annually.
Applicable Exclusion Amount
The total amount a person may generally transfer during life and at death without federal gift or estate tax. It is reduced by taxable lifetime gifts and is subject to changes in law. See also Estate Tax Exemption and Unified Credit.
Ascertainable Standard
A measurable trust distribution standard, commonly health, education, maintenance, and support (HEMS). It can guide a trustee and may help limit adverse tax consequences when a beneficiary also serves as trustee.
Asset Protection Planning
Planning intended to reduce exposure of assets to future creditors, lawsuits, long-term-care costs, or other risks. Results depend on timing, ownership, trust terms, applicable law, and the nature of the claim; it is not a way to defeat known creditors.
Assisted Living
A residential setting that generally provides housing, meals, supervision, and help with daily activities, but not the level of continuous skilled nursing care supplied by a nursing home. Payment and Medicaid rules vary by program and location.
Basis
Generally, the tax value used to calculate gain or loss when property is sold. Gifts often carry over the donor's basis, while property included in a decedent's estate often receives a new basis based on date-of-death value, subject to exceptions.
Beneficiary
A person, trust, charity, or other entity entitled to receive property or benefits under a will, trust, account, insurance policy, or other arrangement.
Beneficiary Designation
A direction on an account or policy naming who receives it at death. It ordinarily controls over a will, so retirement accounts, life insurance, transfer-on-death accounts, and the estate plan must be coordinated.
Bequest
A gift made under a will. The term may refer to money or other personal property; modern documents often use the broader word devise.
By Representation (Per Stirpes)
A method of distributing property through family branches. If a descendant in an older generation has died, that person's share generally passes to that person's descendants, though statutory and document definitions can differ.
Capacity
The legal ability to understand and make a particular decision or sign a particular document. The required level depends on the act; capacity to make a will, sign a contract, create a trust, or make a health care decision may be evaluated under different standards.
Capital Gain
The taxable gain generally realized when an asset is sold for more than its adjusted basis. Gifting, trust funding, and inherited-property rules can materially affect the calculation.
Charitable Lead Trust (CLT)
An irrevocable trust that pays a charity for a stated period, after which remaining property passes to noncharitable beneficiaries. It may be used for philanthropic and transfer-tax planning.
Charitable Planning
Coordinating charitable gifts with estate, income-tax, and family goals. Strategies may include outright gifts, donor-advised funds, charitable trusts, private foundations, and charitable beneficiary designations.
Charitable Remainder Trust (CRT)
An irrevocable trust that pays one or more noncharitable beneficiaries for life or a term of years, with the remainder passing to charity. It can combine philanthropy with an income stream and potential tax benefits.
Codicil
A document that amends a will without replacing the entire will. It must be executed with the formalities required by applicable law and should be reviewed with the original will to avoid inconsistencies.
Community Spouse
For Medicaid purposes, the spouse of an institutionalized individual who continues to live in the community. Special income and resource protections may apply.
Conservator
A court-appointed person who manages another person's finances in some states. New York generally uses the term guardian under Article 81 rather than conservator.
Coordinated Care Planning
A collaborative process aligning legal documents, finances, benefits, housing, medical care, and family responsibilities, often with input from attorneys, care managers, financial advisors, accountants, physicians, and social workers.
Credit Shelter Trust (CST)
A trust designed to use a deceased spouse's available estate-tax exemption while benefiting a surviving spouse or other beneficiaries. It is also called a bypass or family trust and may be especially relevant where state and federal exemption systems differ.
Crummey Power
A temporary right given to a trust beneficiary to withdraw a contribution. Properly administered, it may help a gift to the trust qualify for the federal gift-tax annual exclusion. Written notices and consistent administration are important.
Crummey Trust
An irrevocable gift trust containing Crummey withdrawal powers. It is often used for life-insurance or family gifting, but its tax treatment depends on drafting and administration, not merely its name.
Custodial Care
Help with daily activities such as bathing, dressing, eating, toileting, and supervision. Medicare generally does not cover ongoing custodial care by itself, which is why long-term-care and Medicaid planning may be important.
Decanting
A statutory process that may allow a trustee to distribute assets from an existing irrevocable trust into a new trust with revised terms. Authority and limits depend on governing law, the trustee's powers, beneficiary rights, and tax considerations.
Deed
The legal instrument used to transfer title to real property. Signing a trust does not place real estate into it; a properly executed and recorded deed is generally required.
Descendant
A person in a direct line of descent, such as a child, grandchild, or more remote descendant. Trusts and wills often define whether adopted persons, persons conceived through assisted reproduction, and stepchildren are included.
Digital Assets
Electronic records and online interests, including email, cloud storage, social media, cryptocurrency, digital photos, domain names, and online financial accounts. Access depends on law, governing agreements, security measures, and express authorization in planning documents.
Directed Trust
A trust in which specified powers are divided among different fiduciaries or advisers, such as a distribution trustee and an investment adviser. The governing law and document determine each person's authority and liability.
Disclaimer
A formal refusal to accept inherited or gifted property. A qualified disclaimer must satisfy strict federal and state requirements and deadlines and generally cannot direct where the disclaimed property goes.
Disposition of Remains
Directions concerning funeral arrangements, burial, cremation, anatomical gifts, and control of remains. New York permits a person to appoint an agent to control disposition of remains in a separate written instrument.
Donor-Advised Fund (DAF)
A charitable account sponsored by a public charity. A donor makes an irrevocable contribution, may receive an immediate charitable deduction if requirements are met, and later recommends grants; the sponsoring charity retains legal control.
Durable Power of Attorney
A power of attorney that remains effective after the principal becomes incapacitated. In New York, a properly drafted statutory short-form power of attorney is durable unless it expressly provides otherwise.
Dynasty Trust
A long-term trust intended to benefit multiple generations while providing management, creditor protection, and potential transfer-tax advantages. Duration and effectiveness depend on governing law and generation-skipping transfer tax planning.
Elder Law
A practice area addressing legal and financial issues associated with aging or disability, including incapacity, long-term care, Medicaid, guardianship, benefits, housing, exploitation, and estate planning.
Elective Share
A surviving spouse's statutory right to claim a minimum portion of a deceased spouse's estate rather than accept what was provided under the estate plan. New York's calculation can include certain nonprobate transfers and is subject to deadlines and exceptions.
Estate
Property, rights, and obligations associated with a person. A probate estate includes assets passing through the court process; a taxable estate is calculated under tax law and can include nonprobate property.
Estate Plan
The coordinated set of documents, ownership arrangements, beneficiary designations, and instructions governing property, decision-making, incapacity, and death.
Estate Plan Review
A periodic review of wills, trusts, powers of attorney, healthcare documents, beneficiary designations, property ownership, fiduciary choices, and tax or long-term-care provisions to identify outdated terms, gaps, or conflicts.
Estate Tax
A tax imposed on certain property transferred at death. Federal law and some states, including New York, impose separate estate-tax systems with different exemptions and rules.
Estate Tax Exemption
The amount that can generally pass without estate tax under a particular tax system. Federal and New York exemptions differ, may change, and do not operate identically.
Executor
The person or institution nominated in a will and appointed by the court to administer a probate estate, including collecting assets, paying valid debts and taxes, filing required papers, and distributing property.
Expanded Power of Attorney
A tailored durable power of attorney granting an agent-specific authority that may extend beyond routine banking, including real estate, business, tax, trust, digital-asset, gifting, and Medicaid-planning powers. Broader authority should be granted deliberately and with safeguards.
Family Caregiver Agreement
A written agreement under which a family member provides care or related services for compensation. Clear duties, reasonable pay, records, tax compliance, and Medicaid implications should be addressed before payments begin.
Family Caregiver Counseling
Practical legal guidance for families arranging care, allocating responsibilities, using powers of attorney and health care proxies, protecting assets, responding to exploitation, and deciding whether court involvement is necessary.
Fiduciary
A person or institution required to act loyally, prudently, and within granted authority for another person's benefit. Executors, trustees, guardians, and agents under powers of attorney are common fiduciaries.
Five-and-Five Power
A trust withdrawal right limited each year to the greater of $5,000 or 5% of specified trust property. It is often used to limit gift- or estate-tax consequences of a beneficiary's unexercised withdrawal right.
Fraud and Financial Exploitation Planning
Protective planning that may use carefully selected agents, limited authority, account monitoring, trusts, oversight, successor decision-makers, and intervention protocols to reduce the risk of scams, undue influence, or misuse of assets.
Funding a Trust
Changing title to assets, assigning property, or updating beneficiary designations so assets are connected to a trust as intended. An unfunded trust may fail to avoid probate or accomplish other objectives.
Generation-Skipping Planning
Structuring gifts and trusts to use GST exemption, manage transfer-tax exposure, and preserve property across generations. It often involves dynasty trusts and specialized allocation rules.
Generation-Skipping Transfer (GST) Tax
A separate federal transfer tax that can apply to certain gifts or distributions to grandchildren, more remote descendants, or unrelated persons more than one generation younger. GST exemption must be allocated and administered carefully.
Gift Tax
A federal tax system applying to certain lifetime transfers for less than full value. Most donors owe no immediate tax because exclusions, deductions, and lifetime exemption may apply, but a gift-tax return can still be required.
Grantor
A person who creates or funds a trust. Also called a settlor or trustor. Tax law may use grantor more technically to identify a person treated as owning trust assets for income-tax purposes.
Grantor Trust
A trust whose income, deductions, and credits are attributed to the grantor for federal income-tax purposes. Grantor-trust status is an income-tax concept and does not by itself determine whether assets are included in the grantor's taxable estate.
Guardian
A person appointed by a court to make personal-needs or property-management decisions for someone found unable to manage those matters. A guardian for a minor and an Article 81 guardian for an adult arise under different rules.
Guardianship Proceeding
A court case seeking appointment of a guardian. Advance planning with effective powers of attorney, health care documents, trusts, and supported decision-making may reduce, but cannot always eliminate, the need for guardianship.
Health, Education, Maintenance, and Support (HEMS)
A commonly used ascertainable standard that limits trust distributions to a beneficiary's health, education, maintenance, and support. Its application depends on the trust language and circumstances.
Health Care Agent
The adult appointed under a health care proxy to make health care decisions when the principal cannot make them. The agent's authority, activation, and duties are governed by state law and the document.
Health Care Proxy
A document appointing a health care agent to make medical decisions if the principal loses decision-making capacity. It is distinct from a living will, which states treatment preferences.
HIPAA Authorization
A written authorization permitting specified people to receive protected health information. It can help agents and family members obtain information needed to assist with care, even before a health care proxy becomes operative.
Home Care Medicaid
Medicaid programs that may pay for qualifying long-term-care services in the community. Eligibility, assessment, transfer, income, and resource rules differ from nursing home Medicaid and can change.
Incapacity
An inability to make or communicate particular decisions, as determined under the applicable legal or medical standard. Incapacity is task-specific and is not automatically established by age or diagnosis.
Incapacity Planning
Planning that authorizes chosen people to manage finances, healthcare, care coordination, and property if a person cannot act, typically through powers of attorney, health care directives, trusts, HIPAA authorizations, and clear successor arrangements.
Income in Respect of a Decedent (IRD)
Income the decedent was entitled to but had not yet recognized for income-tax purposes, such as many retirement-account distributions. IRD generally does not receive a basis adjustment at death.
Intestate / Intestacy
Dying without a valid will governing probate property. State law then determines heirs and shares; beneficiary designations, survivorship property, and trust assets still pass under their own rules.
IRA Trust
A trust designed to receive retirement benefits. It must coordinate trust law with beneficiary-designation and required-minimum-distribution rules; naming a trust can protect beneficiaries but may accelerate taxation if structured incorrectly.
Irrevocable Life Insurance Trust (ILIT)
An irrevocable trust designed to own life insurance and manage proceeds for beneficiaries. With proper creation, funding, incidents-of-ownership planning, and administration, proceeds may be kept outside the insured's taxable estate.
Irrevocable Trust
A trust that generally cannot be freely revoked or amended by the grantor. Some irrevocable trusts can still be modified, decanted, reformed, or terminated under the document or applicable law.
Joint Tenancy with Right of Survivorship
A form of co-ownership under which a deceased owner's interest generally passes automatically to the surviving joint owner or owners. It avoids probate for that asset but can create tax, creditor, control, and family-equality issues.
Life Estate
The right to possess or use property for a person's lifetime, after which the property passes to the remainder beneficiary. Life estates can affect control, taxes, Medicaid, and the ability to sell or mortgage property.
Lifetime Gifting
Transferring property during life to help others, reduce a taxable estate, or pursue asset-protection goals. Gifts can affect basis, capital gains, Medicaid eligibility, creditor exposure, and the donor's own financial security.
Living Trust
Another name for an inter vivos trust created during the grantor's lifetime. It may be revocable or irrevocable.
Living Will
A written statement of wishes about life-sustaining treatment and other care if a person cannot communicate. In New York it is recognized through case law rather than a single statutory form and is often paired with a health care proxy.
Long-Term Care
Ongoing assistance with daily activities or supervision due to illness, disability, or cognitive impairment, delivered at home, in assisted living, or in a nursing facility. It is not synonymous with acute medical care.
Long-Term-Care Insurance
Insurance designed to pay specified benefits for qualifying long-term-care services. Coverage, elimination periods, inflation protection, exclusions, and benefit limits vary substantially by policy.
Medicaid
A means-tested federal-state program that can cover health care and qualifying long-term-care services. Eligibility and coverage depend on the program, state rules, income, resources, transfers, medical need, and other factors.
Medicaid Asset Protection Trust (MAPT)
An irrevocable trust used, when appropriate, to preserve certain assets while planning for future Medicaid long-term-care eligibility. It requires advance planning, careful funding, loss of some control, and analysis of look-back, tax, basis, and cash-flow consequences.
Medicaid Look-Back Period
A period during which Medicaid reviews certain asset transfers when determining eligibility for specified long-term-care benefits. The applicable period, program, penalties, and exceptions must be confirmed under current state law.
Medicaid Transfer Penalty
A period of ineligibility that may result from uncompensated transfers during an applicable look-back period. Exempt transfers and planning exceptions may apply, but gifts should not be made without program-specific advice.
Medicare
A federal health-insurance program primarily for people age 65 or older and certain younger people with disabilities. It covers limited skilled care under specified conditions but generally not ongoing custodial long-term care.
Minor's Trust
A trust holding property for a child until ages or milestones stated in the document. It can provide management and flexibility beyond a custodial account and can name a trustee to make discretionary distributions.
New York Estate Tax Cliff
A New York rule under which an estate exceeding the state exemption by more than a specified margin can lose the benefit of the exemption, potentially causing tax on the full taxable estate rather than only the excess. Current figures and planning must be confirmed at the relevant time.
Nonprobate Asset
Property that passes outside probate by beneficiary designation, survivorship, contract, deed, or trust. It may still be part of the taxable estate and may still matter for creditor, elective-share, or allocation rules.
Nursing-Home Medicaid
Medicaid coverage for qualifying institutional long-term care. It generally applies distinct medical, income, resource, transfer, spousal, and look-back rules.
Payable on Death (POD) / Transfer on Death (TOD)
An account or registration directing an asset to named beneficiaries at the owner's death. It can avoid probate but must be coordinated with trusts, tax planning, contingencies, and the overall dispositive plan.
Per Capita
A distribution method under which property is divided equally among living members of a designated generation or group. Its result can differ significantly from a distribution by representation.
Personal Representative
A general term for the fiduciary administering a decedent's estate. Depending on the jurisdiction and circumstances, this may mean an executor or administrator.
Portability
A federal election that may allow a surviving spouse to use a deceased spouse's unused federal estate-tax exemption. It requires a timely federal estate-tax return and does not transfer GST exemption or necessarily solve state estate-tax planning.
Pour-Over Will
A will directing probate assets into an existing trust at death. It is a backup to proper trust funding, not a substitute for funding, because assets passing under it still go through probate.
Power of Attorney
A document authorizing an agent to handle specified financial and legal matters for the principal. It does not authorize health care decisions and ends at the principal's death.
Principal
The person who grants authority to an agent under a power of attorney or health care proxy. In some contexts, principal can also mean the property held in a trust as distinguished from income.
Private Foundation
A charitable entity typically funded and controlled by an individual or family. It offers substantial control but carries ongoing administration, tax filings, distribution requirements, and self-dealing restrictions.
Probate
The court process for establishing a will's validity, appointing an executor, and overseeing administration of probate assets. Probate is not the same as estate tax and does not govern assets passing by trust, beneficiary designation, or survivorship.
Qualified Domestic Trust (QDOT)
A trust used to obtain the federal estate-tax marital deduction when the surviving spouse is not a U.S. citizen, provided detailed statutory and regulatory requirements are met. Distributions and trustee arrangements are subject to special rules.
Qualified Personal Residence Trust (QPRT)
An irrevocable trust to which a residence is transferred while the grantor retains the right to live there for a stated term. It can reduce transfer-tax value but carries mortality, control, and post-term occupancy risks.
Remainderman / Remainder Beneficiary
A person or entity entitled to receive trust or property interests after a prior interest ends, such as after a life tenant's death or the termination of a trust term.
Renunciation
A formal refusal to serve in a nominated fiduciary role, or in some contexts a refusal of rights. It differs from a tax-qualified disclaimer and must follow the applicable procedural rules.
Required Minimum Distribution (RMD)
The minimum amount that generally must be withdrawn annually from certain retirement accounts once applicable rules are triggered. Death-beneficiary rules depend on account type, beneficiary status, age, and current federal law.
Revocable Living Trust
A trust created during life that the grantor can generally amend or revoke. When properly funded, it can provide continuity during incapacity and avoid probate for trust-owned assets, but it does not by itself protect the grantor's assets from creditors or estate tax.
Right of Election
See Elective Share. In New York, a surviving spouse may elect against certain testamentary and nonprobate arrangements, subject to waivers, statutory calculations, and filing deadlines.
Special Needs Trust (SNT)
A trust designed to supplement, rather than replace, means-tested public benefits for a person with a disability. First-party and third-party SNTs have different funding, payback, control, and tax rules.
Spendthrift Provision
A trust clause restricting a beneficiary's ability to transfer an interest and limiting many creditors' access before distribution. Protection varies by state, claim type, beneficiary control, and whether the trust is self-settled.
Spousal Lifetime Access Trust (SLAT)
An irrevocable trust created by one spouse for the other spouse and often descendants. It can use gift-tax exemption while preserving indirect household access through the beneficiary spouse, but creates divorce, death, reciprocity, control, and basis considerations.
Standby Guardian
A person designated to assume specified guardianship responsibilities for a minor upon a triggering event, subject to statutory requirements and potential court involvement.
Step-Up in Basis
A commonly used term for the basis adjustment that often sets inherited property's basis to fair market value at death. The adjustment may be upward or downward and does not apply to every asset, including most IRD items.
Successor Agent
A backup person designated to act if the initially named agent cannot or will not serve. Clear succession helps avoid gaps in financial or health care decision-making.
Successor Trustee
A person or institution designated to become trustee after the prior trustee's death, incapacity, resignation, or removal.
Supplemental Needs Trust
New York terminology commonly used for a special needs trust. It preserves trust resources for supplemental needs while seeking to maintain eligibility for means-tested benefits.
Surrogate's Court
The New York court that handles probate, estate administration, many trust proceedings, guardianships of minors, and related matters.
Taxable Estate
The value determined under estate-tax law after including applicable property interests and subtracting permitted deductions. It is not limited to probate assets.
Tenancy by the Entirety
A form of ownership available to married couples for qualifying real property. It includes survivorship rights and certain creditor protections; New York also recognizes it for cooperative-apartment shares under specified law.
Tenancy in Common
Co-ownership in which each owner holds a separate share that generally passes under that owner's estate plan rather than automatically to the other owners.
Testamentary Trust
A trust created under a will and funded at death through probate. It can protect beneficiaries but does not avoid probate for the assets funding it.
Trust
A legal relationship in which a trustee holds and manages property under written terms for one or more beneficiaries. Trusts vary widely in revocability, taxation, control, asset protection, and purpose.
Trust Administration
The process of carrying out a trust's terms, including identifying and valuing assets, investing prudently, keeping records, communicating with beneficiaries, making distributions, filing tax returns, and accounting when required.
Trust Modification
A change to an existing trust through authority in the document, beneficiary and fiduciary consent, court approval, statutory procedure, decanting, settlement, or other permitted method. Tax and public-benefit consequences must be considered.
Trust Protector
A person given specified oversight or amendment powers over a trust, such as removing trustees, changing governing law, or responding to tax changes. The document and governing law define the protector's role and fiduciary status.
Trustee
The person or institution holding legal title to trust property and responsible for administering it according to the trust and applicable fiduciary law.
Undue Influence
Improper pressure that overcomes a person's free will and causes a transaction or estate plan to reflect another person's wishes. Capacity and undue influence are related but distinct issues.
Unified Credit
The federal tax credit corresponding to the applicable exclusion amount and used against gift and estate tax. Lifetime taxable gifts can reduce the credit available at death.
Uniform Transfers to Minors Act (UTMA) Account
A custodial account holding property for a minor. The custodian manages it until the statutory transfer age, when the beneficiary generally gains full control; it offers less long-term protection and flexibility than a trust.
Will
A document directing the disposition of probate property at death, nominating an executor, and often nominating guardians and creating testamentary trusts. It has no operative effect until death and does not control nonprobate assets.
Will Contest
A court challenge to a will based on grounds such as improper execution, lack of testamentary capacity, undue influence, fraud, or revocation. Disagreement with the plan alone is not a legal ground.