Feiock, Anne M.

Gorham, Elizabeth E.

Rezac, David

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South Dakota State UniversityOpen PRAIRIE: Open Public Research Access InstitutionalRepository and Information ExchangeFact Sheets SDSU Extension12-7-2004A Glossary of Estate Planning TermsDavid RezacSouth Dakota State UniversityAnne M. FeiockElizabeth E. GorhamFollow this and additional works at: http://openprairie.sdstate.edu/extension_factThis Other is brought to you for free and open access by the SDSU Extension at Open PRAIRIE: Open Public Research Access InstitutionalRepository and Information Exchange. It has been accepted for inclusion in Fact Sheets by an authorized administrator of Open PRAIRIE: OpenPublic Research Access Institutional Repository and Information Exchange. For more information, please contact michael.biondo@sdstate.edu.Recommended CitationRezac, David; Feiock, Anne M.; and Gorham, Elizabeth E., "A Glossary of Estate Planning Terms" (2004). Fact Sheets . Paper 121.http://openprairie.sdstate.edu/extension_fact/1211Estate Planning SeriesAdministrator Term formerly used for a person named in a will to carry out settlement of  the estate. Under the South Dakota Uni-form Probate Code, the term is now personal representative.Alternate Valuation Date A date exactly six months following the decedent’s date of  death that the personal representative may choose to revalue, for federal estate tax purposes, all as-sets held by the estate.Ancillary Probate Term for probate if  dece-dent had real property in another state.Annual Exclusion The amount of  $11,000 that can be given to any individual or any num-ber of  individuals gift tax free. A husband and wife together can give $22,000 to each person.Annuity The periodic payment of  a definite sum of  money, with such payments to continue for life or for a definite number of  years.Assets All types of  property which can be made available for the payment of  debts.Attorney Another name for a lawyer.Beneficiary A person (or institution) who derives benefit from the creation of  a trust, proceeds of  insurance policy, or property desig-nated by a will.Closely-Held Business A business organiza-tion in which the ownership is held by a limited number of  people (often within the same fam-ily) rather than owned by the public at large.Codicil A supplement, amendment, or addi-tion to a will executed with all the formalities of  the will itself. It may explain, modify, add to, subtract from, qualify, alter, or revoke provi-sions in a will.Common Disaster Clause A statement in a will telling how property is to be distributed if  would-be devisees die from the same accident as the testator.Conservator A person who is appointed by a court to manage the estate of  a protected per-son who, because of  age, intellect, or health, is incapable of  managing his or her own affairs.A Glossary of  Estate Planning TermsAdapted for South Dakota audiences by David Rezac, School of Law graduate student, Uni-versity of South Dakota, Anne Marie Feiock, J.D., Young Lawyers Section President, South Dakota Bar Association, and Elizabeth E. Gorham, PhD, AFC, Associate Professor and Exten-sion Family Resource Management Specialist, South Dakota State University, with permission of Montana State University, author Marsha A. Goetting, PhD, CFP®, CFCS, Professor and Extension Family Economics Specialist, Montana State University. FS928e-6South Dakota State University • College of Family and Consumer Sciences • SD Cooperative Extension Service2 Estate Planning SeriesConsideration Something which has value, such as real or personal property or a promise given in exchange for another promise.Contingency The possibility of  coming to pass; an event that may occur.Corpus Trust property; the principal sum as distinguished from interest or income.Death Taxes Taxes due by reason of  death of  an individual.Decedent A deceased person.Deed A legal instrument used to transfer title to real property in the eyes of  the law.Devise When used as a noun, real or personal property given to another by will. When used as a verb, to dispose of  real or personal property by will.Devisee Any person designated in a will to receive real or personal property.Domicile That place where a person has voluntarily fixed his/her habitation, not for a temporary or special purpose but with a pres-ent intention of  making it his/her home unless and until something, which is uncertain and unexpected, shall happen to induce him/her to adopt some other permanent home.Donee One who receives a gift.Donor One who makes a gift.Durable Power of  Attorney Allows the power of  attorney to survive any disability the princi-pal could suffer.Escheats When a decedent’s property goes to the state because of  lack of  heirs.Estate Tax (South Dakota) The South Dakota estate tax is equal to the maximum credit allowable for state death taxes against the federal estate tax.Estate Tax (Federal) Taxes assessed by the federal government upon a decedent’s right to transfer property.Exempt Property This property is protected from creditors and devisee claims. It includes specific items such as photos, clothing, and an amount to provide the fuel necessary for one year. In addition to these specific amounts an additional amount of  personal property can be selected, not to exceed the value of  $6,000 if  head of  a family or $4,000 if  not the head of  a family.Family Allowance The surviving spouse and minor children are entitled to a reasonable fam-ily allowance in cash from the estate for their maintenance during the period of  probate ad-ministration. The personal representative may determine the family allowance in a lump sum not exceeding $18,000, or periodic installments not exceeding $1,500 per month for one year.Fiduciary Includes personal representative, guardian, conservator, and trustee.Formal Probate Proceedings Those con-ducted before a judge with notice to interested persons for probate of  a will or appointment of  a personal representative.Gross Estate For federal estate tax purposes, the total value of  all property—real or person-al, tangible or intangible—that a decedent had owned or had control over at the time of  death.Guardian A person legally empowered and charged with the duty of  taking care of  another who, because of  age, intellect, or health, is inca-pable of  managing his or her own affairs. The guardian manages the person.A conservator manages the property of  a minor or incapacitated person. A person can be appointed both guardian and conservator.Heirs Those persons who are entitled under the statutes of  intestate succession to the prop-erty of  a decedent.3Estate Planning SeriesHolographic Will A will in which the signature and material provisions are in the handwriting of  the testator, and which needs not be witnessed.Homestead Allowance A surviving spouse of  a decedent who was a resident of  South Dakota is entitled to keep the family home or, if  the home is sold, up to $30,000 of  the sale proceeds. The $30,000 limit does not apply if  the decedent or spouse is seventy years of  age or older.Informal Probate Proceedings Those conducted without prior notice to interested persons by the clerk of  the court for probate of  a will or appointment of  a personal repre-sentative.Inherit To receive property from a deceased person.Inter Vivos Trust Legal name for a living trust. The trust is set up by the grantor during his or her lifetime.Intestate A term used when a person dies without leaving a valid will.Irrevocable A term used to describe a trust in which the trustor (maker of  the trust) has, by the terms of  the trust agreement, specifically given up the power to alter, amend, or termi-nate the trust either entirely or in part. In South Dakota, trusts are irrevocable unless the donor expressly reserves the power to revoke.Joint Tenancy A form of  co-ownership in which two or more persons hold interests in the same property with right of  survivorship.Incidents of  Ownership Rights applying to ownership interest in an insurance policy. These include the right to change a beneficiary, to borrow on a policy, to change premium modes, and so on.Life Estate A condition created whereby a person has the right to use property only for his or her lifetime.Lineal Descendant One who is, by blood re-lationship, in the direct line of  descent from an ancestor. The term includes adopted children in South Dakota.Marital Deduction (Gift) Allows married persons to make unlimited lifetime gifts to each other and claim a marital deduction for any amount without a gift tax.Marital Deduction (Estate) Allows married persons to make unlimited testamentary devises to the surviving spouse and claim a marital deduction for any amount and avoid an estate tax on such amount.Pay on Death (POD) Designation is the naming of  a beneficiary to receive an account balance on a party’s death.Per Capita Equal shares to all who inherit.Personal Representative A person named in a will or appointed by the circuit court to admin-ister the estate of  a decedent. Formerly referred to as executor, administrator.Personal Property Assets whose ownership arises either out of  physical possession of  the property, or as the result of  a document show-ing ownership. Examples: livestock, machinery, stored grain, bank deposits, stocks and bonds, checking and savings accounts, automobiles and other transportation and recreational ve-hicles. In South Dakota, all property other than real estate.Per Stirpes Term used by a testator to describe the division of  property among different de-grees of  kinship. For example: A had children B and C. B had one child B1 and C had two children C1 and C2. If  A had in his will that his property be divided per stirpes, and B and children of  C were survivors, then B would receive one-half  and the children C1 and C2 would split the other half  (1/4 to each). If  the property had been divided per capita, than all would have received equal shares of  one-third each.4 Estate Planning SeriesPower of  Attorney A written, notarized docu-ment in which one person gives another the power to conduct certain acts on his or her behalf.Pretermitted Child One who may, under certain circumstances, become an heir due to birth or adoption after the date of  execution of  a testator’s will.Private Annuity A means of  transferring property from one owner to another by “sell-ing” it for an unsecured promise to pay the original owner an income for life. The sale price is based on fair market value at the time of  sale.Probate The process of  the personal repre-sentative gathering all the property of  someone who died, paying all just debts and taxes, and distributing the balance to the devisees desig-nated in the will or to the heirs as prescribed by the legislature where there is no will or the will is defective.Real Property Real estate, minerals and royalty interests, growing timber, land and buildings attached to the land.Remainderman One entitled to the remainder of  an estate after a particular reserved right or interest has expired.Revocable A trust in which the trustor (maker of  the trust) has, by the terms of  the trust agreement, reserved the power to alter, amend, or terminate the trust and to receive the prop-erty back from the trustee.Right of  Election The surviving spouse’s right to a share of  the augmented estate rather than accepting the amount provided by will or intes-tate succession statues. The percentage is based on the length of  marriage.Separate Listing of  Tangible Personal Property A list separate from the will that identifies both the items and persons to receive them.Sole Ownership Title to property in one name.Spouse A person’s wife or husband.Succession Law Law that governs the disposi-tion of  one’s estate if  there is no will.Tenancy in Common A type of  co-ownership between two or more persons who hold undi-vided interests in the same property with no right of  survivorship for the surviving tenant in common. When one dies, his or her share becomes part of  his or her estate. The property goes to his or her heirs and not to the other tenants in common unless they are also his/her heirs or, if  there is a will, to his/her devisees.Testamentary Pertaining to a will.Testamentary Trust A trust, set up in a will, which does not become effective until the death of  the testator.Testator A person making a will.Transfer on Death (TOD) Designation on se-curities that allows the naming of  a beneficiary to receive them upon death of  a party.Trust The legal relationship created by virtue of  one party holding legal title to property, whether real or personal, for the benefit of  another.Trustee The person, or corporate body hold-ing title to the trust property, appointed to execute, administer, and carry out the terms of  a trust for the benefit of  the beneficiary.Trustor Maker of  a trust.Will The legal instrument expressing a person’s wishes and directions as to the disposition and distribution of  his/her property after death.Witness A person who observes the signing of  a will and attests to the signature.5Estate Planning SeriesReferencesGarman, E. T., & Forgue, R. E. 2000. Personal Finance: Chapter 19- Estate Planning. NY, NY: Houghton Mifflin Company.South Dakota Codified Laws Chapter 29-A. Intestate Succession and Wills. Retrieved April 7, 2005 from http://legis.state.sd.us/statutes/in-dex.aspx?FuseAction=DisplayStatute&Statute=29A-2&Type=StatuteDisclaimerThis publication is not intended to be a substitute for legal advice. Rather, it is designed to create an awareness of the need for estate planning and to help families become better acquainted with some of the devices involved. Future changes in laws cannot be predicted, and statements in the fact sheet are based solely upon the laws in force on the date of  publication.AcknowledgementsUse of this document for non-profit educational purposes is encouraged. This document may be linked to or reprinted if no endorsement of a commercial product, service or company is stated or implied, and if appropriate credit is given to the authors and the South Dakota State University Extension Service.This publication is suggested for the reading of all South Dakotans. It has been reviewed and approved by the South Dakota Bar Association and South Dakota State University faculty in the Human Development, Consumer and Family Sci-ences Department, College of Family and Consumer Sciences, March 2005.The programs of the SDSU Extension Service are available to all people regardless of race, creed, color, sex, disability or national origin. Issued in furtherance of cooperative extension work in agriculture and home economics, acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Ag-riculture, Gerald W. Warmann, Director, Cooperative Extension Service, South Dakota State University, Brookings, SD 57007.6 Estate Planning SeriesThis report is available on the Web at http://www.sdstate.edu/~wpls/http/var/vartrial.html South Dakota State University, South Dakota counties, and U.S. Department of Agriculture cooperating. South Dakota State University is an Affirmative Action/Equal Opportunity Employer and offers all benefits, services, education, and employment opportunities without regard for race, color, creed, religion, national origin, ancestry, citizenship, age, gender, sexual orientation, disability, or Vietnam Era veteran status.

A Glossary of Estate Planning Terms

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A Glossary of Estate Planning Terms

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