A
A-B TRUST: Also called a marital life estate
is a trust designed to help couples with combined assets over
$600,000 save money on estate taxes. A bypass trust allows each
member of a couple to use the $600,000 estate tax exemption.
AFFIDAVIT: A written statement made under
oath.
AGE OF MAJORITY: The age when a person acquires
all the rights and responsibilities of being an adult. In most
states, the age is 18.
ALIMONY: Also called maintenance or spousal
support. In a divorce or separation, the money paid by
one spouse to the other in order to fulfill the financial obligation
that comes with marriage.
ASSIGNMENT: The transfer of legal rights,
such as the time left on a lease, from one person to another.
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B
BANKRUPTCY: Insolvency; a process governed
by federal law to help when people cannot or will not pay their
debts.
BENEFICIARY: Person named in a will or
insurance policy to receive money or property; person who receives
benefits from a trust.
BUY-SELL AGREEMENT: An agreement among business
partners that specifies how shares in the business are to be
transferred in the case of a co-owner's death.
BYPASS TRUST: Also called a marital life
estate or an A-B trust. A trust designed to help couples with
combined assets over $600,000 save money on estate taxes. A
bypass trust allows each member of a couple to use the $600,000
estate tax exemption.
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C
CAPITAL GAIN: The profit made from the
sale of a capital asset, such as real estate, a house, jewelry
or stocks and bonds.
CAPITAL LOSS: The loss that results from
the sale of a capital asset, such as real estate, a house, jewelry
or stocks and bonds. (Also the loss that results from an unpaid,
non-business (personal) loan.)
CHAPTER 7 BANKRUPTCY: A type of bankruptcy
in which a person's assets are liquidated (collected and sold)
and the proceeds are distributed to the creditors.
CHAPTER 13 BANKRUPTCY: A type of bankruptcy
in which a person keeps his assets and pays creditors according
to an approved plan.
CHILDREN'S TRUST: A trust set up as part
of a will or outside of a will to provide funds for a child.
CODICIL: A supplement to a will.
COHABITATION AGREEMENT: Also called a
living-together contract. A document that spells out the
terms of a relationship and often addresses financial issues
and how property will be divided if the relationship ends.
COLLATERAL: An asset that a borrower
agrees to give up if he or she fails to repay a loan.
COMMON-LAW MARRIAGE: In some states,
a couple is considered married if they meet certain requirements,
such as living together as husband and wife for a specific length
of time. Such a couple has all the rights and obligations of
a traditionally married couple.
COMMUNITY PROPERTY: Property acquired
by a couple during their marriage. Refers to the system in some
states for dividing the couple's property in a divorce or upon
the death of one spouse. In this system, everything a husband
and wife acquire once they are married is owned equally (fifty-fifty)
by both of them, regardless of who provided the money to purchase
the asset or whose name the asset is held in.
CONSERVATOR: Person appointed to manage
the property and finances of another. Sometimes called a guardian.
CONSIDERATION: Something of value that
is given in exchange for getting something from another person.
CONTRACT: An agreement between two or
more parties in which an offer is made and accepted, and each
party benefits. The agreement can be formal, informal, written,
oral or just plain understood. Some contracts are required to
be in writing in order to be enforced.
CREDITOR: A person (or institution) to
whom money is owed.
CUSTODIAN: Under the Uniform Transfers
to Minors Act, the person appointed to manage and dispense funds
for a child without constricting court supervision and accounting
requirements.
CUSTODIAN OF THE WILL: The person who
has the Will when the person who wrote the Will dies.
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D
DEBTOR: Person who owes money.
DEED: A written legal document that describes
a piece of property and outlines its boundaries. The seller
of a property transfers ownership by delivering the deed to
the buyer in exchange for an agreed upon sum of money.
DEFAULT: The failure to fulfill a legal
obligation, such as neglecting to pay back a loan on schedule.
DEFINED CONTRIBUTION PLAN: Also called
an individual account plan. A type of retirement plan
in which the employer pays a specified amount of money each
year, which is then divided among the individual accounts of
each participating employee. Profit-sharing, employee stock
ownership and 401(k) plans are all defined contribution plans.
DISBURSEMENTS: Legal expenses that a
lawyer passes on to a client, such as for photocopying, overnight
mail and messenger services.
DOCKET NUMBER: Number designation assigned to
each case filed in a particular court.
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E
EASEMENT: Gives one party the right to
go onto another party's property. Utilities often get easements
that allow them to run pipes or phone lines beneath private
property.
ELECTIVE SHARE: Refers to probate laws
that allow a spouse to take a certain portion of an estate when
the other spouse dies, regardless of what was written in the
spouse's will.
EMANCIPATION: When a minor has achieved
independence from his or her parents, often by getting married
before reaching age 18 or by becoming fully self-supporting.
ENCUMBRANCE: Any claim or restriction on a
property's title.
EQUITABLE DISTRIBUTION: In a divorce,
one of the ways in which property is divided. In states with
equitable distribution systems, property acquired during a marriage
is jointly owned by both spouses. Equitable distribution does
not necessarily mean equal distribution, and ownership does
not automatically split fifty-fifty. Rather, the distribution
must be fair and just (equitable).
ESCROW: Money or documents, such as a
deed or title, held by a third party until the conditions of
an agreement are met. For instance, pending the completion of
a real estate transaction, the deed to the property will be
held "in escrow."
ESCROW ACCOUNT: A special account in
which a lawyer or escrow agent deposits money or documents that
do not belong to him or his firm.
ESTATE: All the property a person owns.
EXECUTOR: Person named in a will to oversee
and manage an estate.
EX PARTE: Latin that means "by or for
one party." Refers to situations in which only one party (and
not the adversary) appears before a judge. Such meetings
are often forbidden.
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F
FIDUCIARY DUTY: An obligation to act
in the best interest of another party. For instance, a corporation's
board member has a fiduciary duty to the shareholders, a trustee
has a fiduciary duty to the trust's beneficiaries, and an attorney
has a fiduciary duty to a client.
FORECLOSURE: When a borrower cannot repay
a loan and the lender seeks to sell the property.
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G
GRANTOR: The person who sets up a trust.
GUARDIAN: Person assigned by the court
to take care of minor children or incompetent adults. Sometimes
called a conservator.
GUARDIAN AD LITEM: Latin for "guardian
at law." The person appointed by the court to look out for the
best interests of the child during the course of legal proceedings.
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H
HEALTH CARE PROXY: Someone designated
to make a broad range of decisions for a person who is not able
to give informed consent.
HEIRS: Persons who are entitled by law
to inherit the property of the deceased if there is no will
specifying how it's divided.
HOLOGRAPHIC WILL: An unwitnessed handwritten
will. A few states allow such documents to be admitted to probate,
but most courts are very reluctant to accept them.
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INTESTATE: When someone dies without a will.
INTESTATE SUCCESSION: The order of who inherits
the property when someone dies without a Will.
IRREVOCABLE LIVING TRUST: A trust created during
the maker's lifetime that does not allow the maker to change
it.
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JOINT AND SURVIVOR ANNUITY: A form of pension
fund payment in which the retired participant gets a check every
month. If and when the participant dies, the spouse continues
to get a monthly check equal to one-half of the benefit for
the rest of his or her life.
JOINT PROPERTY: Sometimes called joint
tenancy. Property that names a co-owner on its deed or
title. Co-owners retain ownership of the property upon
the death of a co-owner. A co-owner in a joint property
arrangement cannot give away his or her share of the property.
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L
LEGATEE, or DEVISEE: Also known as a
beneficiary. Person named in a will to receive property.
LIEN: A claim against someone's property.
A lien is instituted in order to secure payment from the property
owner in the event that the property is sold. A mortgage is
a common lien.
LIVING-TOGETHER CONTRACT: See cohabitation
agreement.
LIVING TRUST: A trust created during
the maker's lifetime. Some living trusts are set up so that
they can be changed during the maker's lifetime. These are called
"revocable." Others, known as "irrevocable," are set up so that
they can't be touched.
LIVING WILL: A written document that
states a person's wishes regarding life-support or other medical
treatment in certain circumstances, usually when death is imminent.
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MAINTENANCE: In a divorce or separation,
the money paid by one spouse to the other in order to fulfill
the financial obligation that comes with marriage.
MINOR: A person who does not have the
legal rights of an adult. A minor is usually defined as someone
who has not yet reached the age of majority. In most states,
a person reaches majority and acquires all of the rights and
responsibilities of an adult when he or she turns 18.
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N
NOTARY PUBLIC: A person authorized to
witness the signing of documents.
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P
PENSION PLAN: An employer's program for
providing retirement income to eligible employees.
PERSONAL PROPERTY: Smaller items owned
by a person like cash, stocks, jewelry, clothing, furniture,
boats or cars.
PERSONAL REPRESENTATIVE: (also known
as the administrator or executor) The person in charge of overseeing
the distribution of the estate. Additionally, the Personal Representitive
manages the legal affairs of the estate and is often granted
power of attorney for the deceased.
PETITION FOR PROBATE: The document that
summarizes a will's provisions and names the heirs.
POWER OF ATTORNEY: The authority to act
legally for another person.
PROBATE: The legal process which decides
how,, where and to whom the decedent's property is distributed.
PROBATE ESTATE: Property passing from
a decendent's estate by his or her will or as directed by State
intestate succession law.
PROMISSORY NOTE: A written document in
which a borrower agrees (promises) to pay back money to a lender
according to specified terms.
PROPERTY GUARDIAN: Person appointed to
oversee property left to a minor in a will. Distinguished
from a personal guardian.
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QUITCLAIM DEED: A deed that transfers
the owner's interest to a buyer but does not guarantee that
there are no other claims against the property.
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REAL PROPERTY: Land and all the things
that are attached to it (homes, offices, buildings, etc.). Anything
that is not real property is personal property. Personal property
is anything that isn't nailed down, dug into or built onto the
land. For example: A house is real property, but a dining room
set is not.
RESIDUARY ESTATE: Also known as residue
of the estate. Portion of the estate left after bequests of
specific items of property are made. Often the largest portion.
RESIDUARY LEGATEE: The person or persons
named in a will to receive any residue left in an estate after
the bequests of specific items are made.
RETAINER: Refers to the up front payment
a client gives a lawyer to accept a case. The client is paying
to "retain" the lawyer's services.
RETAINING LIEN: Gives a lawyer the right
to hold on to your money or property (such as a deed) until
you pay the bill.
REVOCABLE LIVING TRUST: A trust created
during the maker's lifetime that can be changed. Allows the
creator to pass assets on to chosen beneficiaries without going
through probate.
RIGHT OF SURVIVORSHIP: In a joint-tenancy,
the property automatically goes to the co-owners if one of the
co-owners dies. A co-owner in a joint tenancy cannot give away
his or her share of the property.
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SECURITY AGREEMENT: A contract between
a lender and borrower that states that the lender can repossess
the property a person has offered as collateral if the loan
is not paid as agreed.
SELF-PROVING WILL: A will accompanied
by a sworn statement from witnesses and signed before a notary
public. Many states accept such wills in order to avoid the
cumbersome process of requiring an executor to track down the
witnesses.
SINGLE LIFE ANNUITY: A form of pension
plan payment in which the retired person receives a monthly
check from the time of retirement until death.
SPENDTHRIFT TRUST: A trust designed to
keep money out of the hands of creditors, often established
to protect someone who is incapable of managing his or her financial
affairs.
SPOUSAL RIGHT: The entitlement of one
spouse to inherit property from the other spouse. The right
varies from state to state.
SPOUSAL SUPPORT: See alimony.
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TANGIBLE PERSONAL PROPERTY: Anything
other than real estate or money, including furniture, cars,
jewelry and china.
TENANCY IN COMMON: A type of joint ownership
that allows a person to sell his share or leave it in a will
without the consent of the other owners. If a person dies without
a will, his share goes to his heirs, not to the other owners.
TESTAMENTARY TRUST: A trust created by
the provisions in a will. Typically comes into existence after
the writer of the will dies.
TESTATE: When someone dies with a Will.
TESTATOR: The person who makes a will.
TITLE: Ownership of property.
TOTTEN TRUST: A bank account in your name
for which you name a beneficiary. Upon the death of the named
holder of the account the money transfers automatically to the
beneficiary.
TRUST: Property given to a trustee to
manage for the benefit of a third person. Generally the beneficiary
gets interest and dividends on the trust assets for a set number
of years.
TRUSTEE: Person or institution that oversees
and manages a trust.
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Waiver: The voluntary relinquishment
of a privilege or a right.
Ward: A person who is under a guardian's
charge or protection.
Will: An instrument executed by a person,
which disposes of a person's property on or after his or her
death.
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Orange
County's friendly and caring estate planning law office.
The Law Office of Tracy Murphy is located in the city of
Irvine, in Orange County, California. Tracy Murphy represents
individuals, families, and small business owners in estate planning,
business planning, and tax planning. Tracy Murphy is a knowledgeable
estate planning attorney who understands the value of establishing
trustworthy, long-term relationships with each client. Clients
appreciate the availability of house calls and hospital visits
at no additional cost. 
"I
believe the most important estate planning objectives are protecting
what you have earned, and planning to provide for your loved ones"
- Tracy Murphy. 
