Glossary

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Legacy

A legacy is a gift of personal property via a will.

Letters of Testamentary

Letters of testamentary are issued to the executor or personal representative of an estate by the probate court after the will is offered for probate. It serves as evidence that the executor or personal representative has the permission and authority of the court to act on behalf of the estate to fulfill their duties. Letters of testamentary are generally needed to do everything from close bank accounts to sell real estate.

Lien

It is possible that, at death, a decedent has liens on his or her property. It is a right given by the owner of the property to another to secure a debt. States differ in how they deal with liens on property at death. In some states, the beneficiary who receives the property is responsible for paying the debt underlying the lien. In other states, the decedent’s estate is responsible for paying the debt underlying the lien before the bequest may pass to the beneficiary.

Life Estate

A person who has a life estate in real property has a right to use the property for his or her life even though the property belongs to others. For estate planning purposes, the creation of a life estate typically is used to ensure the property passes quickly to the desired recipients without having to go through probate. For example, parents might transfer ownership of their home and adjacent land to their child, but retain a life estate in the property, which gives them the right to live there as they did before they transferred the property ownership. When both of the parents are dead, the property is already the possession of the child—it is just the right to live there that transfers.

Living Trust

A living trust, similar to a will, is created by a person to convey how the estate is to be distributed after death. People generally create a living trust to avoid the probate process. In a living trust, the trustee is similar to an executor in that a trustee ensures the decedent’s assets are distributed according to his or her wishes. A big difference between a living trust and a will is that a living trust can become effective even before the death of the creator of the trust. A will is not effective until the creator dies.

Living Will/Advance Directive

As the name suggests, a living will or advance directive deals with a person’s wishes while he or she is still alive, but might not be able to express those wishes at the time they are needed. A living will or advance directive might direct decisions regarding medical care such as life supporting procedures, pain medication administration, and artificial nutrition and hydration mechanisms.