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Estate Planning Glossary
An A-to-Z reference of trust and estate planning terms used throughout New Jersey estate law.
Authored by Christopher T. Tappan, Esq., Client Services Director and Attorney, Estate Planning · Reviewed by Britt J. Simon, Esq., Managing Partner, Simon Law Group, LLC · May 202610 min read
Estate planning has a vocabulary most clients didn't sign up for. "Revocable" and "irrevocable," "per stirpes" and "per capita," "fiduciary" and "beneficiary," "intestacy" and "probate": the terms appear in documents clients are asked to sign and in conversations with attorneys, financial advisors, and accountants who use them as if everyone already understands. The glossary below is the working reference we use ourselves and that we share with clients. The point is not to make you read every entry; it's to make sure the page is here when an unfamiliar term appears in a document or conversation.
A-Z Estate Planning Terms
The entries below are organized A to Z. Each one explains not just what a term means but why it matters to a New Jersey estate plan, because a definition you can read but not use is no help when a document is in front of you. If a term you are looking for is not here, or if you want to understand how one of these concepts applies to your own assets and family, contact the Simon Law Group to discuss your estate planning needs.
A
- A/B Trust
- A two-part trust structure commonly used by married couples. When the first spouse passes away, the trust splits into an "A" trust (the survivor's trust) and a "B" trust (the bypass or credit shelter trust). The B trust holds assets up to the federal estate tax exemption, which can reduce estate-tax exposure when the surviving spouse later dies. The structure is designed to let a married couple use both spouses' estate tax exemptions; whether it is the right tool today depends on the size of the estate and current exemption levels, which have changed substantially over the years.
- Administration
- The process of managing and distributing a deceased person's estate. In New Jersey, administration typically involves filing the will with the county Surrogate Court, obtaining Letters Testamentary or Letters of Administration, inventorying assets, paying debts and taxes, and distributing the remaining property to beneficiaries according to the will or state intestacy laws.
- Annual Exclusion Gift
- A gift up to a specified dollar amount that an individual can generally give to another person each year without filing a gift tax return, using lifetime gift tax exemption, or owing federal gift tax. The IRS adjusts the exclusion amount periodically for inflation, so the current figure should be confirmed for the year of the gift. Used consistently, annual exclusion gifts are a common tool for transferring wealth to the next generation over time.
- Asset Protection Trust
- An irrevocable trust designed to reduce creditor, lawsuit, or judgment exposure when properly structured and funded before creditor issues arise. New Jersey does not currently authorize domestic asset protection trusts in the same way some other states do. Proper legal counsel is essential to structure these trusts in compliance with both state and federal law.
B
- Beneficiary
- A person, organization, or entity designated to receive assets or benefits from a will, trust, insurance policy, retirement account, or other financial instrument. Beneficiary designations on accounts such as life insurance and IRAs generally control the disposition of those assets at death and typically take precedence over instructions in a will, which is why it is critical to keep designations current after major life events like marriage, divorce, or the birth of a child. New Jersey law revokes some designations to a former spouse automatically on divorce, but not all (federally governed retirement plans, for example, follow the form on file with the plan administrator), so a will update alone does not reliably redirect these assets.
C
- Charitable Trust
- An irrevocable trust established to benefit a charitable organization or purpose. Common forms include the charitable remainder trust (CRT), which provides income to the grantor or other beneficiaries for a period before the remainder passes to charity, and the charitable lead trust (CLT), which reverses that arrangement. Both structures offer potential income tax deductions and estate tax benefits under federal and New Jersey law.
- Conservatorship
- A court-appointed arrangement in which a conservator manages the financial affairs and/or personal care of an individual deemed unable to do so themselves. In New Jersey the term "guardianship" is generally used for both the person and the estate, but the concept is the same. A proper estate plan with durable powers of attorney and advance healthcare directives can often prevent the need for a court-supervised conservatorship.
D
- Durable Power of Attorney
- A legal document that authorizes another person (the agent or attorney-in-fact) to act on your behalf in financial and legal matters. The word "durable" means the authority remains effective even if the principal becomes mentally incapacitated. Under the New Jersey Revised Durable Power of Attorney Act (N.J.S.A. 46:2B-8.1 et seq.1), specific powers must be expressly granted in the document to be effective.
E
- Executor
- The person named in a will to carry out the terms of the document after the testator's death. In New Jersey, the executor (sometimes called a personal representative) is responsible for filing the will with the Surrogate Court, inventorying assets, paying debts and taxes, and distributing the estate to beneficiaries. If no executor is named or the named individual is unable to serve, the court appoints an administrator.
F
- Fiduciary
- Any individual or institution that holds a legal obligation to act in the best interest of another party. In estate planning, fiduciaries include executors, trustees, guardians, and agents under a power of attorney. New Jersey law imposes strict duties of loyalty, care, and impartiality on fiduciaries, and they can be held personally liable for breaches of those duties.
G
- Grantor
- The person who creates and funds a trust. Also referred to as the settlor or trustor. The grantor transfers ownership of assets into the trust and establishes the terms under which the trustee manages and distributes those assets. In a revocable living trust, the grantor often serves as both trustee and beneficiary during their lifetime.
I
- Irrevocable Trust
- A trust that generally cannot be modified, amended, or terminated by the grantor once it is executed. Because the grantor gives up control of the assets, those assets may be excluded from the grantor's taxable estate, providing potential estate tax savings if the structure is respected. Irrevocable trusts are used for asset protection, Medicaid planning, life insurance ownership, and charitable giving. Changes may be possible in limited circumstances through court proceedings or, where the trustee has broad discretionary authority, common-law decanting (Wiedenmayer v. Johnson, 106 N.J. Super. 161 (App. Div. 1969)2; New Jersey has no decanting statute).
L
- Living Will
- A written document, also known as an advance directive for healthcare, that expresses your wishes regarding medical treatment if you become unable to communicate those wishes yourself. In New Jersey, the Advance Directives for Health Care Act (N.J.S.A. 26:2H-53 et seq.3) allows individuals to specify which life-sustaining treatments they do or do not wish to receive and to designate a healthcare proxy to make decisions on their behalf.
P
- Probate
- The legal process through which a court validates a will and oversees the administration of a deceased person's estate. In New Jersey, probate begins when the executor files the original will with the Surrogate Court in the county where the decedent resided. The process can range from straightforward to lengthy and contested depending on the complexity of the estate, the clarity of the will, and whether any beneficiaries challenge the document.
S
- Step-Up in Basis
- A federal tax provision that adjusts the cost basis of an inherited asset to its fair market value on the date of the owner's death. The adjustment can eliminate the capital gains tax that would otherwise be owed on appreciation that occurred during the decedent's lifetime if the heir sells at that stepped-up value, because the gain is measured from the new basis rather than the decedent's original cost. For example, if a parent purchased a home for $200,000 and it was worth $600,000 at the time of death, the heir's cost basis becomes $600,000. Understanding the step-up in basis is critical for estate planning strategies that involve appreciated real estate, securities, and business interests.
T
- Testator
- The person who creates and signs a will. Under New Jersey law (N.J.S.A. 3B:3-14), a testator must generally be at least 18 years old and of sound mind at the time the will is executed, and the will must be signed by at least two witnesses (N.J.S.A. 3B:3-25). A self-proving affidavit (N.J.S.A. 3B:3-46), while not required for validity, can streamline probate by reducing the need to locate the witnesses later.
- Trust
- A legal arrangement in which a grantor transfers assets to a trustee who manages those assets for the benefit of designated beneficiaries according to the terms set out in a trust document. Trusts serve a wide range of purposes in New Jersey estate planning, including avoiding probate, reducing estate taxes, protecting assets from creditors, providing for minor children or individuals with special needs, and facilitating charitable giving. Trusts can be revocable (modifiable during the grantor's lifetime) or irrevocable (generally fixed once created). New Jersey trusts are governed primarily by the New Jersey Uniform Trust Code (N.J.S.A. 3B:31-1 et seq.7). A trust is not an add-on for the wealthy only; it is often the appropriate tool where there is real estate, a blended family, a minor or special-needs beneficiary, or a net worth above roughly $250,000, and whether one fits is a question for individualized counsel rather than a rule of thumb.
Related Estate Planning Resources
- Estate Planning Overview: the pillar covering wills, trusts, powers of attorney, advance directives, probate, and the broader estate-planning framework
- Revocable Living Trusts: probate avoidance, privacy, and incapacity continuity
- Irrevocable Trusts: asset protection, federal estate-tax mitigation, Medicaid planning
- Power of Attorney: financial decision-making during incapacity
- Advance Directives: healthcare proxy and living-will framework
- Complete Resource Library: every estate-planning resource on the site indexed
How we help: We translate these definitions into an asset-by-asset plan for authority during incapacity, beneficiary transfers at death, fiduciary succession, tax exposure, and trust administration. This glossary is a reference, not a document template; legal work accepted by the firm is bespoke and designed around the client's facts. Map these terms to your estate plan.
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