A person or entity acting on behalf of another person or entity, the principal. For example, an agent under a financial power of attorney may be authorized to withdraw funds from an account that is owned by the principal.
Explanation of Key Terms
Persons and/or entities who may receive property from another.
Stipulates a contractual transfer at the death of an account owner. Commonly used for life insurance policies, retirement accounts and annuity contracts.
Taker in default of the primary beneficiary, typically due to the death of the primary beneficiary. In many cases, children are the contingent beneficiaries for a deceased parent.
Persons or entities who take the remaining assets of a trust upon termination, typically upon the death of the current trust beneficiaries.
A separate tax identification number for an estate or trust that is assigned by the Internal Revenue Service, upon application, at the incapacity or death of the grantor of a trust or upon the death of the testator of a Last Will and Testament.
May also be referred to as personal representative. A Court appointed representative who is nominated under a Last Will and Testament to manage the estate of a decedent. Duties usually include marshalling and protecting assets of the decedent, paying decedent’s debts, filing tax returns, paying expenses of estate administration, and distributing the remaining estate to the beneficiaries.
A position of trust, involving a duty to act in the best interest of another. Trustees, agents and executors serve in a fiduciary capacity.
A person or entity transferring assets to the trustee of a trust to be held, administered and distributed for the benefit of the grantor and/or other beneficiaries.
A contractual disposition at the death of an account owner, typically a bank account, to one or more designated beneficiaries.
One who delegates authority to another as agent to perform acts for his, her or its benefit.
Court supervision of a decedent’s estate administration.
Generally an asset titled to an individual (not in trust) that has no contractual or survivorship disposition at death.
Two or more owners of property who may hold unequal, undivided interests with no survivorship, i.e., each having the right to dispose of their interest at death.
Two or more owners of property who hold equal, undivided interests, not having the right to dispose of their interest at death, i.e., a decedent’s share is owned equally by the surviving tenants or entirely by the sole surviving tenant.
A person who makes a Will.
A contractual disposition at the death of an account owner, typically a brokerage account, to one or more designated beneficiaries.
A legal entity that is created when one person or entity, the grantor, transfers property to a trustee, who hold legal title to the property, for the benefit of a beneficiary, who holds an equitable interest in the transferred property. One person generally will serve as grantor, trustee and beneficiary of a revocable trust throughout the lifetime of the grantor.
An individual or entity that holds legal title to property in trust for the benefit of the trust beneficiary(ies).
Document that expresses a person’s final wishes. A Will can be used to nominate a guardian for minor children, nominate an executor, and dispose of remaining assets to individuals, charities and/or other entities, such as trusts.