Abatement. Abatement occurs when there are insufficient assets in the deceased person's estate to cover debts and obligations in the will and thus certain obligations must be reduced or eliminated.  In Vermont, absent an abatement clause in the will, abatement applies first to property not disposed of by the will, then residuary devises and bequests, then general devises and bequests, then specific devices and bequests. A will may also state the priority by which to abate probate assets.

Ademption. Ademption means the destruction or extinction of a legacy or bequest because the asset is not part of the probate estate. This can occur if the beneficiary received the deceased person’s asset as a gift prior to the decedent’s death, or where the asset was lost, sold or otherwise disposed of by the owner and thus not part of the person’s estate when they died.

Administration.Administration is the process of collecting and managing a decedent's property, paying taxes and creditors and distributing the remaining property to beneficiaries or heirs.

Administrator or Administratix.A person appointed by the court to administer an estate, in the capacity of a fiduciary. If the fiduciary was named in the will, the person is called the executor, but if the court appoints a person not named in the will to fulfill this role, the person is known as the administrator. Historically, women administrators have been referred to as an administratix.

Alternate Valuation Date.The alternate valuation date is a date six months after the decedent died at which time the decedent's estate may be valued. If the alternate valuation date would save taxes versus a valuation based on the decedent's date of death, the alternate valuation date may be used for estate tax filings.

Ancillary Administration. Ancillary administration refers to the administration of a decedent's estate in a state that is not the decedent's domiciliary state. For example, if a Vermont resident owns real property in New York, there may be a need for an ancillary administration (probate process) in New York upon the death of the property owner.

Annual Gift Exclusion. The annual gift exclusion is the amount that an individual may pass to anyone free of federal gift or other transfer taxes. In 2010, the annual exclusion amount was $13,000.

Ascertainable Standard. An ascertainable standard defines the permissible standard for making distributions of income or principal from a trust. Ascertainable standards that are acceptable to the Internal Revenue Service are used so that the trust assets are not considered part of the recipient’s gross estate. The most commonly used ascertainable standard allows distributions for health, education, maintenance or support.

Beneficiary. A beneficiary is someone who receives property according to the terms of a will or receives equitable title to property in trust according to the terms of a trust.

Bequest. A bequest is a gift of personal property in a will. See also Devise and Legacy.

Codicil. A codicil is an amendment to a will.

Credit Shelter Trust. A credit shelter trust is a trust that preserves a decedent's unified credit for estate and gift tax purposes.  The trust "shelters" the decedent's estate tax exclusion so that married couples retain two estate tax exemptions rather than just one.

Devise. A devise is a gift of real property (real estate) in a will. See also Bequest and Legacy.

Devisee. A devisee is someone named in a will who is to receive real property (real estate) from the decedent’s probate estate.

Disclaimer. A disclaimer is a person's refusal to accept rights or interest in specific property offered to the person. A successful disclaimer must be done within nine months, and must follow specific requirements, so it is important to discuss with a CPA or attorney when contemplating a disclaimer.  When property is disclaimed, it passes as if the disclaimant were not alive at the time.

Domicile. Domicile is one's permanent state of residence.

Donor. A donor is someone who makes a gift.

Estate. One's estate is the total of your assets, debts and other obligations. Estate can be used in different contexts, for instance probate estate (all assets passing through probate) and estate tax estate (all assets subject to federal or state estate tax).

Estate Tax. The estate tax is a tax imposed on transfers of property after death. Many states, including Vermont, impose an estate tax in addition to the federal estate tax.

Executor or Executrix. An executor is a person named in a will, or appointed by the court, that is in charge of administering the deceased person's estate during the probate process. Executors are usually reimbursed for expenses related to the position, including hiring an attorney to assist with the probate process.  The will may also allow the executor to be paid compensation for duties performed. Historically, women executors have been referred to as an executrix.

Fiduciary. A fiduciary has a legal duty to act in the best interest of another, for example a trustee has fiduciary obligations to the beneficiaries.  Fiduciaries generally have a duty of loyalty, a duty of care and a duty to account.

Generation Skipping Transfer Tax (GSTT). The GSTT is a federal tax imposed on outright gifts and transfers in trust to beneficiaries two or more generations younger than the donor. An available GSTT exemption equals the federal estate tax exemption amount.

Gift Tax. A tax imposed on transfers of money or property during the giver's lifetime.

Grantor Trust. A grantor trust is a type of trust whereby the person who created the trust is treated by the Internal Revenue Service as the owner of the assets in the trust for tax purposes.  Most revocable living trusts are grantor trusts.

Guardian. A guardian is legally responsible for the care and well being of another person, usually a minor. Guardians are appointed by the court, but the courts will usually honor a parents selection of a guardian in the parent's will, provided there are no compelling reasons not to appoint that person.

Guardianship. A guardianship is the court-managed process for overseeing the affairs of a minor child or incompetent person.

Heir. An heir is someone who receives property under a state's intestacy laws.

Insolvency. Insolvency refers to a situation where a person's total assets are insufficient to pay off the person's debts.

Interested Person. An interested person is someone who likely has a close relation to the decedent or the probate process. While they are interested persons, they must receive notice of various court filings and related matters. At the beginning of a probate proceeding, the class of interested persons usually includes heirs, devisees, legatees, children, spouses, and other persons named by the probate court. The designation of interested person may be removed from a person, or a person may be added as an interested person during the probate process, as determined by the probate court.

Intestate. A person who dies without a valid will is said to have died intestate. Intestate also refers to the Vermont rules applicable for probating an intestate person’s property, commonly referred to as the intestacy rules. See also Testate.

Inventory. An inventory is an itemized list of assets owned by the decedent at the time of death.

Irrevocable Trust. An irrevocable trust is a trust that may not be modified or terminated by the grantor after execution.

Joint Tenancy. Joint tenancy is a form of ownership where two or more people own property together, and if one of the joint owners dies, their share passes to the remaining joint owners. A form of joint tenancy for married couples is known as tenancy-by-the-entirety.

Legacy. A legacy is a gift of money in a will. See also Bequest and Devise.

Legatee. A legatee is a person named in a will who is to receive personal property from the decedent’s probate estate.

Letters of Administration. Letters of Administration is a document issued by the probate court appointing the administrator of an estate where the decedent died without leaving a will.

Letters Testamentary. Letters Testamentary is a document issued by the probate court appointing the executor of an estate where the decedent died leaving a will.

Marital Deduction. The marital deduction is the amount that one spouse can pass to the other free of state or federal taxes.  Currently, the marital deduction is unlimited, meaning that a spouse can pass an unlimited amount of money or assets to their surviving spouse tax free.

Marital Deduction Trust. A marital deduction trust is often included in a living trust to hold assets exceeding the decedent's estate tax exclusion amount. By holding the excess assets in a trust that qualifies for the unlimited marital deduction, taxes are delayed until the death of the second spouse.

Personal Property. Personal property is anything that is movable, such as the contents of a home, automobiles, equipment and cash.

Per Stirpes. Per stirpes is a method for allocation of assets according to a family tree where descendents of a deceased ancestor split the ancestor’s share equally. For example, Parent has four children, A, B, C and D. If D is deceased and has three children, those three children would split D’s one-quarter share of Parent’s inheritance equally.

Power of Appointment. A power conferred by a donor to a person by language in a deed, will or trust allowing the person to select one or more recipients of the donor's estate or income.

Probate. Probate has come to mean the process of proving the validity of a will and administering the related assets in conjunction with the probate court's oversight until final distribution of the deceased person’s assets to their beneficiaries or heirs. This process, which can last either a few months or several years is known as the probate process. The process of taking assets through the probate court is known as probating assets. Assets that must pass through probate are called the decedent’s probate estate, or the estate inventory.

Real Property. Real property is land, also known as real estate, and anything that is permanently attached to the land, such as a home, office building or farm barn.

Revocable Living Trust. A revocable living trust is created by the settlor while the settlor is alive to achieve various estate planning goals, including reducing or eliminating federal and state estate taxes, avoiding probate, providing for stability in the event the settlor becomes incapacitated, and creating a smooth transition and transfer of assets to the beneficiaries after the settlor dies.

Settlor. A settler is the person who creates a trust and transfers property to the trust.

Spendthrift Provision. A spendthrift provision restricts both voluntary and involuntary trust distributions to a beneficiary, usually to protect the beneficiaries interest from creditors’ claims.

Tenancy-by-the-Entirety. Tenancy-by-the-entirety is a form of joint tenancy for married couples.

Tenancy-in-Common. Tenancy-in-common is a form of ownership where two or more people own property together, but if one joint owner dies, the property passes to decedent's beneficiaries or heirs, and not the other joint owners.

Testamentary Capacity. Testamentary capacity is the minimum level of mental competence a will maker must possess when writing a will. Generally, a will maker must be able to: (1) understand the nature and extent of their assets; (2) identify the natural objects (usually children) of his or her bounty; and (3) understand the nature of a will and express the intention to provide for the disposition of his or her assets.

Testamentary Trust. A testamentary trust is included in a will and comes into being only after the will maker dies and the assets pass through probate first.

Testate. A person who dies with a valid will is said to have died testate. See also Intestate.

Testatorand Testatrix. A person who dies with a valid will. A testator is male; a testatrix is female. Over time, testator has come to be used for both males and females who die with a valid will.

Trust. A trust is a fiduciary relationship established between the trustee and the beneficiary where the trustee is the holder of legal title to property that is being held for the benefit of the beneficiary.  Trusts come in many forms, but the majority of trusts used in estate planning are knows as revocable living trusts, or inter vivos trusts.  Revocable living trusts may be amended or revoked by the trust maker, known as the grantor.  Advanced estate planning often incorporates irrevocable trusts, which may not be amended after going into effect.

Trustee. A trustee is a person who has legal title to property, but holds it in trust for the benefit of another (beneficiary) and owes the beneficiary fiduciary obligations.

Undue Influence. Undue influence refers to someone exerting pressure on a will maker to write their will a certain way, usually to the benefit of the person exerting the undue influence.

Will. A will is a written document (or sometimes an oral declaration) providing instructions for who should receive your property after you die. A will usually names an executor to manage the Vermont probate process and a guardian to raise your minor children.  In Vermont probate courts, wills must be signed and properly witnessed by two individuals to be valid.  A will has no effect until the drafter's death, at which time the will must be submitted to the Vermont probate court and the probate process begun.

Will Contest. A will contest occurs when someone objects to the validity of a will or a will's dispositions.  Will contests tend to slow down the probate process considerably and make the process far more expensive, because attorneys are usually hired to defend or attack the will, which often focuses on the competency of the will maker at the time the will was drafted.