Estate planning comes with a lot of unfamiliar terminology. This glossary is designed to provide general definitions and explanations of commonly used estate planning terms. It is intended to help individuals better understand the language often used in estate planning documents and discussions. It is not legal advice. The following terms and definitions are specific for Arizona. Other states may refer to the same definition with a different term. Laws and applications vary, and readers should consult a licensed attorney for advice specific to their situation.
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A
A/B Trust
A trust structure historically used by married couples to reduce federal estate taxes by dividing assets into two trusts when the first spouse dies. Each trust uses one spouse’s estate tax exemption. While less common today due to higher exemption limits, A/B trusts may still be useful in certain planning situations.
Advance Directive
A general term for documents that communicate a person’s wishes regarding medical treatment and end-of-life care, often including a Living Will and healthcare/medical powers of attorney.
Affidavit to Transfer Personal Property
A legal affidavit used in Arizona to transfer certain personal property—such as bank accounts, vehicles, or other non-real-estate assets—without going through full probate, if the estate qualifies under Arizona’s small estate laws.
Affidavit to Transfer Title to Real Property
A legal affidavit used in Arizona to transfer ownership of real property without full probate, when the estate qualifies as a small estate under state law.
Agent
A term used for the fiduciary named in Powers of Attorney. Also known as a representative.
Ancillary Probate
A secondary probate proceeding conducted in a state other than the decedent’s primary residence, usually required when real property is owned in multiple states or another state other than the one the decedent resided at the time of passing.
Asset
Anything a person owns that has monetary value or personal significance. Assets may include real estate (or the equity in real estate), bank accounts, investments, retirement accounts, vehicles, business interests, personal belongings, digital assets, and intellectual property. In estate planning, how an asset is titled and whether it has a beneficiary designation can affect how it is managed during life and transferred after death.
Asset Protection
Planning strategies designed to reduce exposure of assets to creditors, lawsuits, or financial risk. Asset protection may involve trusts, LLCs, insurance, or ownership structuring.
Attorney-in-fact
The term used for the fiduciary named in General / Financial Powers of Attorney.
B
Basis
See “Tax Basis”.
Beneficiary
A person, group, or organization designated to receive assets or benefits from a trust, will, insurance policy, retirement account, or other legal arrangement.
Beneficiary Deed
A deed used in Arizona that allows a property owner to name one or more beneficiaries who will automatically receive ownership of real property upon the owner’s death, without going through probate.
Bypass Trust
A trust that allows a surviving spouse to disclaim (refuse) certain assets so they pass into a separate trust, preserving estate tax exemptions and controlling ultimate distribution.
C
Capital Gains Tax
A tax imposed on the profit from selling an asset. Proper estate planning can minimize or delay capital gains through stepped-up basis rules.
Codicil
A written amendment to an existing will. A codicil must meet the same legal requirements as a will to be valid.
Community Property
Property acquired by spouses during marriage or brought into a marriage for marital benefit in a community property state like Arizona, generally owned equally by both spouses.
Community Property State
A state that recognizes community property laws in which most property acquired by spouses during marriage is considered jointly owned by both spouses, regardless of which spouse earned or purchased it. Arizona is a community property state.
Community Property with Right of Survivorship
A form of ownership available to married couples in Arizona that allows property to automatically pass to the surviving spouse while retaining community property tax benefits.
Conservator
A court-appointed individual responsible for managing the financial affairs and property of a minor or incapacitated adult.
Conservatorship
A court-controlled legal arrangement in which a conservator manages the finances of someone unable to do so themselves.
Contingent Beneficiary
A backup beneficiary who receives assets if the primary beneficiary cannot or does not survive.
Creditor
A person or institution to whom money is owed, such as banks, lenders, medical providers, or credit card companies.
D
Decedent
The person who has died.
Digital Assets
Online accounts, electronic files, cryptocurrencies, cloud storage, social media profiles, and other digital property.
Disclaimer Trust
See “Bypass Trust”.
Disinherit
To intentionally exclude a person—often a family member—from receiving any portion of an estate or trust. Disinheritance must be clearly stated in estate planning documents to avoid confusion or disputes.
Do Not Resuscitate (DNR) Order
A medical order instructing emergency personnel not to perform life-saving procedures (i.e., CPR, etc.).
Durable Power of Attorney
A legal document authorizing an agent to manage financial and legal matters on behalf of the principal, even if the principal becomes incapacitated.
Durable Healthcare Power of Attorney
A document authorizing an agent to make medical decisions if the principal cannot communicate or make decisions themselves.
E
Estate
All assets and debts owned by an individual during life and at death, including real property, personal property, financial accounts, and liabilities.
Estate Plan
A coordinated set of documents addressing asset distribution, incapacity planning, guardianship, and healthcare decisions.
Estate Planning
The process of creating a plan for how a person’s assets, responsibilities, and personal affairs will be managed during their lifetime and transferred after death. Estate planning commonly includes documents such as wills, trusts, powers of attorney, healthcare directives, and beneficiary designations.
Estate Taxes
Taxes imposed on the transfer of assets at death. Federal estate taxes apply only to estates exceeding a certain threshold, which is adjusted periodically.
Executor
Another term for Personal Representative (Arizona)—the individual named in a will to administer the estate.
F
Fiduciary
A person legally obligated to act in the best interests of another, with honesty, care, and loyalty. Trustees, Personal Representatives, agents, and conservators are fiduciaries.
Financial Power of Attorney
See “Durable Power of Attorney”.
Funding
See “Trust Funding”.
G
General Power of Attorney
See “Durable Power of Attorney”.
Generation-Skipping Transfer Tax (GSTT)
A federal tax that may apply when assets pass directly to grandchildren or later generations, bypassing children.
Gift
A voluntary transfer of property (real or personal) without receiving something of value in return. Gift tax may apply.
Gift Tax
A federal tax that may apply when one person gives money or property to another without receiving something of equal value in return. Most gifts do not result in immediate tax owed because federal law allows an annual gift tax exclusion (which is adjusted periodically) and a lifetime gift and estate tax exemption. Gifts that exceed the annual exclusion may be required to be reported to the IRS, but typically count against the giver’s lifetime exemption rather than triggering out-of-pocket tax. Gift tax rules are often considered in estate planning to reduce the size of a taxable estate and manage wealth transfers over time.
Grantor
See “Trustor”.
Guardian
A court-appointed individual responsible for managing the personal care and well-being of a minor or incapacitated adult.
H
Healthcare Power of Attorney
See “Durable Healthcare Power of Attorney”.
Heir
A person who is legally entitled to inherit from someone who has died, either under the terms of a will or, if no will exists, under state intestacy laws. In Arizona, heirs are typically close family members such as spouses, children, or other relatives. The term “heir” is most often used when someone dies without a valid estate plan, and the law determines who receives the estate.
HEMS Standard
A common trust distribution guideline allowing funds to be used for Health, Education, Maintenance, and Support.
HIPAA Authorization
A document allowing medical providers to release protected health information to designated individuals.
I
Incapacitated
A legal determination that a person cannot manage their personal or financial affairs. Incapacity may be temporary or permanent.
Intestate / Intestacy
Dying without a valid will or trust. Arizona law determines who inherits.
Intestate Heirs
Individuals entitled to inherit under state law when no estate planning documents exist.
Issue
A legal term referring to lineal descendants, such as children and grandchildren.
J
Joint Ownership
A form of property ownership in which two or more people share ownership of the same asset at the same time. Joint ownership can take several legal forms—such as joint tenancy, community property, or tenants in common—and each type has different rules regarding control, inheritance, and transfer at death. How property is jointly owned can significantly impact estate planning, probate avoidance, and tax treatment.
Joint Tenancy
A form of property ownership with a right of survivorship, meaning ownership automatically transfers to surviving owners at death.
L
Last Will and Testament
A legal document directing how assets are distributed after death and naming guardians and Personal Representatives. Wills generally require probate.
Letters of Appointment
Probate court-issued documents granting authority to act on behalf of the estate. Also known as Letters of Personal Representative.
Liability
A legal or financial obligation owed by an individual or entity, such as debts, loans, mortgages, credit card balances, taxes, or potential legal claims. Liabilities are considered part of an estate and may need to be paid or addressed before assets can be distributed to heirs or beneficiaries.
Life Estate
The right to use and benefit from property for life without owning it. Ownership passes to another upon death.
Living Trust
A trust created during life to manage assets, avoid probate, and provide instructions after death.
Living Will
A document expressing wishes regarding life-sustaining medical treatment when recovery is no longer expected.
M
Marital Deduction
A federal estate tax provision allowing assets to pass to a surviving spouse without immediate estate tax.
Medical power of Attorney
See “Durable Healthcare Power of Attorney”.
Mental Healthcare power of Attorney
A legal document in which an individual appoints an agent to make mental health treatment decisions on their behalf if they become unable to make or communicate those decisions themselves. This may include consenting to or refusing psychiatric treatment, medications, or admission to a mental health treatment facility, as authorized by the document and Arizona law. A Mental Healthcare Power of Attorney is separate from a general Healthcare / Medical Power of Attorney and is specifically designed to address mental and behavioral health care needs.
N
Non-Probate Asset
An asset that transfers automatically at death through beneficiary designations or survivorship.
O
Operating Agreement
An LLC document outlining ownership, management, and succession planning.
P
Pay on Death (POD) Account
A financial account where the value of such account is paid directly to a named beneficiary upon death.
Per Capita
A method of distribution where each living beneficiary receives an equal share.
Per Stirpes
A method of distribution where a deceased beneficiary’s share passes to their descendants.
Personal Property
All property that is not real property, including items such as vehicles, bank accounts, investment accounts, household goods, jewelry, collectibles, business interests, and digital assets. In estate planning, personal property may transfer through a will, trust, beneficiary designation, or small estate affidavit, depending on how the property is owned and the total value of the estate.
Personal Representative
The person appointed to administer an estate through probate.
Pour-Over Will
A will directing probate assets into a trust after death. Typically used in conjunction with a trust.
Pre-Hospital Medical Directive
See “Do Not Resuscitate (DNR) Order”.
Probate
The court-supervised process of transferring assets, paying debts, and distributing property after death.
Probate Threshold
The value limits established by state law that determine whether an estate may qualify for simplified transfer procedures instead of full probate.
Q
QTIP Trust
A trust allowing assets to qualify for the marital deduction while controlling ultimate distribution after the surviving spouse’s death.
Quitclaim Deed
A deed transferring ownership interest without warranties.
R
Real Property
Land and anything permanently attached to it.
Representative
See “Agent”.
Revocable Trust
A trust that can be amended or revoked during the trustor’s lifetime. The trust becomes irrevocable upon the trustor’s death.
Right of Survivorship
A legal feature of certain forms of joint ownership in which a deceased owner’s interest automatically passes to the surviving owner or owners, without going through probate. Right of survivorship is commonly associated with joint tenancy and community property with right of survivorship.
S
Separate Property
Property owned before marriage, acquired by gift or inheritance, or otherwise stipulated as separate property through a nuptial agreement.
Settlor
See “Trustor”.
Small Estate Transfer
A simplified Arizona procedure allowing certain estates to bypass a full probate proceeding. Includes Affidavit to Transfer Personal Property or Affidavit to Transfer Title to Real Property.
Spendthrift Clause
A trust provision protecting assets from a beneficiary’s creditors.
Springing Power of Attorney
A type of General/Durable Power of Attorney that does not become effective immediately upon signing, but instead “springs” into effect only after a specific event occurs—most commonly a determination that the principal is incapacitated. The document typically defines how incapacity is established, such as certification by one or more physicians. While a springing power of attorney can limit an agent’s authority until it is needed, it may also create delays if proof of incapacity is required before the agent can act.
Stepped-Up Tax Basis
Many assets receive a “step-up” in basis to fair market value at death, which can reduce capital gains taxes when beneficiaries later sell the asset.
Successor Trustee
The individual who manages and distributes trust assets when the original trustee can no longer act.
T
Tangible Personal Property
Physical items that can be seen and touched, such as furniture, jewelry, artwork, vehicles, tools, collectibles, and household goods. Tangible property is a subset of personal property and is often distributed through a will, trust, or separate written memorandum referenced in an estate plan. Does not include cash.
Tax Basis
The value of an asset for tax purposes.
Tenants-in-common / tenancy in common
A form of joint ownership in which two or more people own an interest in the same property, but do not have a right of survivorship. Each owner may hold equal or unequal shares, and each owner’s share becomes part of their estate upon death. Because there is no automatic transfer to the surviving owner(s), a deceased owner’s interest may need to go through probate unless other estate planning tools are in place.
Testamentary Trust
A trust created by a will after death. Assets must go through probate first.
Titled Asset
An asset with ownership shown on a title or registration.
Transfer on Death (TOD) Account
A financial account that transfers directly to a named beneficiary upon death.
Trust
A legal entity where assets are held and managed for beneficiaries.
Trust Accounting
A record of trust income, expenses, and distributions.
Trust Administration
The process of managing and distributing trust assets after incapacity or death.
Trust Funding
The process of transferring ownership of assets into a trust so that the trust, rather than the individual, legally owns and controls those assets. Trust funding may include retitling real estate, changing ownership of bank and investment accounts, and updating beneficiary designations where appropriate. A trust can only govern and distribute the assets that are properly funded into it. Assets left outside the trust may still require probate or other court involvement, even if a trust exists.
Trustee
The person responsible for managing trust assets.
Trustor
The person who creates a trust.
W
Warranty Deed
A deed guaranteeing clear title and ownership rights.
Will
A legal document directing asset distribution and guardianship after death.
Disclaimer: I am not an attorney, and the information above is for general informational purposes only. It should not be considered legal advice. For legal advice tailored to your situation, please consult a licensed attorney.