The reduction of bequests when the assets of an estate are insufficient to pay all taxes, expenses, and bequests in full.

When property listed in a will is subsequently disposed of prior to death, thus preventing the beneficiary from inheriting the property.

The person or institution appointed by the court to administer or settle the estate of a deceased person who dies intestate.

The date six months after your death (in most cases). Your estate representative has the option of valuing your assets as of the date of death or as of the alternate valuation date if certain criteria are met.

Everyone can give away assets or cash up to the annual gift tax exclusion amount to as many people as they desire each year free of gift taxes. For 2011 the annual gift tax exclusion amount is $13,000. For subsequent years the amount is indexed for inflation.

A tax credit allowed by the federal government against taxes due on gifts or transfers from your estate, and for 2011 and 2012 the applicable credit amount is $1,730,800.

The dollar value of assets that you can give to a nonspouse either during your lifetime or at your death free of estate or gift taxes. For 2011 and 2012, the dollar value is $5 million for estate taxes and gift tax purposes.

A person who is designated to receive benefits under a will, trust, or insurance policy.

Property left to a person or organization under a will or trust.

See credit shelter trust.

An amendment to a previous will. A codicil is executed with the same formalities as a will.

Nine states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) have community property laws, which, in general, state that all property acquired by either partner in a marriage is considered owned one-half by each partner.

A person or organization that is a beneficiary only upon the occurrence of some contingent event. For example, “I give Jean Daily the sum of $5,000 only if she is married to my brother John Daily at the time of my death.”

Also known as bypass trust. A trust established under your will to take advantage of the applicable exclusion amount.

See dower.

A person or trust company responsible for the care and management of property for a minor. The relationship is a fiduciary relationship.

The person who died.

When a person disclaims benefits received from a decedent. If the disclaimer is timely (usually within nine months of receiving the rights to the property), irrevocable, the person never received any benefits from the property, and all other requirements are met, then there will be no tax consequences to the disclaiming person.

The state in which you have your permanent residence.

A person receiving a gift.

A person making a gift.

(female); curtesy (male). Some states have laws that give your spouse the right to receive a certain portion of your estate (usually one-third to one-half) even if he or she is left out of your will. Also referred to as an elective share.

State law that requires the estate of a person who dies without a will and without heirs to revert to the deceased's primary state of residence.

All of the property you own at your death (your gross estate).

Transfer taxes imposed by our federal government (and our states in some cases) for the privilege of giving your property to your heirs.

The person (or institution) you name in your will who will be responsible for settling your estate at your death.

A person or institution occupying a position of trust. Fiduciaries are held to high standards of accountability by our courts.

A provision common in a trust agreement giving a surviving spouse the noncumulative right to withdraw annually the greater of (a) 5 percent of the trust corpus or (b) $5,000. The exercising of such right does not cause inclusion of the trust assets in the estate of the surviving spouse.

A tax imposed on transfers of assets (either through gifts or your will) to a “skip” generation (e.g., a grandchild). For 2011 and 2012 the first $5 million of transfers are not subject to the GSTT.

The transfer of property to another person or organization without receiving anything of value in return.

A tax imposed on the transfer of assets made during a person's lifetime. Note that the tax is due on gifts in excess of certain limits.

A person who establishes and transfers property to a trust. Also called a settlor.

A person responsible for the care of a minor (called guardian of the person) or a minor's property (called the property guardian).

A person entitled under state law to receive assets of another person who died without a will.

A will that is completely handwritten. Many states recognize holographic wills only under certain circumstances.

Someone who has been judged by a court of law to be incapable of managing his or her financial affairs.

A tax imposed by some states on heirs who receive an inheritance.

A trust created during your lifetime rather than under your will. Also called a living trust.

The laws of each state that determine who will receive the assets of a person who dies without a will.

To die without a will.

A type of trust that cannot be revoked, changed, or amended. This type of trust is often used to remove assets from one's estate.

Your direct descendants, such as children, grandchildren, and great-grandchildren.

A way of titling property whereby at the death of one joint tenant the remaining joint tenant(s) automatically receives the deceased person's interest.

A single document that serves as the will for two people (usually a married couple).

A gift of property under a will. The recipient of such property is called a legatee.

Typically a lifelong trust, and often a multigenerational trust that contains asset protection attributes.

The right to use property during one's lifetime. At death, that person's rights terminate.

See inter vivos trust.

A document that declares the level of care you desire should you become medically incapacitated. Generally, it states that you do not wish to be kept alive by artificial means.

The law provides that a married person may leave (or gift) an unlimited amount of assets to his or her spouse free of estate and gift taxes. This typically results in a postponement (rather than elimination) of the estate or gift taxes.

A trust set up to receive assets that qualify for the marital deduction.

A person who is not legally considered an adult (age 18, 19, or 21 in most states). Minors cannot legally enter into binding contracts.

A provision in a will that provides that any person contesting the will shall have no rights to any assets under the will. Also known as the in-terrorem clause.

An oral will. Many states do not allow oral wills at all; other states allow them only in extreme circumstances such as imminent death.

A distribution that is divided equally among the named persons (or their descendants) who have survived the testator. For example, you leave $100,000 to be divided per capita among your two sons and two daughters ($25,000 each). If one of your daughters predeceased you but had two children, your surviving children and two grandchildren would each receive $20,000.

All property other than real estate.

A distribution that is divided among named persons or their descendants should they predecease the testator. For example, you leave $100,000 to be divided among your two sons and two daughters ($25,000 each). If one of your daughters predeceased you but had two children, your surviving children would each receive $25,000, and your deceased daughter's children would each receive $12,500.

A right given to a person allowing him or her to designate to whom someone else's assets will go at the occurrence of a specified event.

A document executed by you that gives another person (your agent) the right to act on your behalf. A power of attorney can be written to include very broad or very limited powers.

The person (or persons) who will receive property under a will, trust, or insurance policy.

The court-supervised process of transferring one's property at death to his or her rightful heirs.

All property of a deceased person that is subject to probate. Certain property such as joint tenancy property is not subject to probate.

Legally referred to as a qualified domestic trust. This is a spousal trust that allows non–U.S. citizen spouses to receive assets qualifying under the unlimited marital deduction.

Legally referred to as a qualified terminable interest property trust. This spousal trust allows you to control the ultimate disposition of the assets in the trust. Your spouse receives all income from the trust during his or her lifetime. This trust can qualify for the unlimited marital deduction.

Land and fixed improvements such as buildings, trees, and fences.

The portion of your estate that remains after all specific distributions have been made. Also known as the residuary estate.

A type of trust that can be changed, modified, amended, or terminated at any time by the grantor during his or her lifetime.

A complicated section of the law that prohibits leaving assets in trust indefinitely while avoiding taxes. Basically, the law states that funds can be left in trust for the lifetime plus 21 years of any beneficiary living at the time the grantor establishes the trust. Beyond that time a severe penalty is imposed.

A person who establishes and transfers property to a trust. Also called a grantor.

A provision in a trust that prevents trust assets from being pledged, assigned, or otherwise used as collateral for a loan. The purpose is to protect the assets from the beneficiary's creditors.

A provision in a trust that allows the trustee the discretion to distribute trust income among the beneficiaries as the trustee deems appropriate. The distributions can be uneven (excluding some beneficiaries in favor of others), or the trust income can be accumulated.

The tax basis of appreciated property steps up to fair market value on the date of death. For example, if you own a stock that is worth $40,000 for which you paid $10,000 (your tax basis), you have a taxable gain of $30,000. If you died, the tax basis would step up to the fair market value of $40,000, and an immediate sale would result in no taxable gain.

The portion of your estate that is subject to federal and/or state taxes. From the gross estate you subtract funeral and administrative expenses, debts (including certain unpaid taxes), charitable contributions, and the marital deduction (if applicable).

A trust that is created under your will that will take effect at your death.

One who dies having made a valid will.

A legal arrangement whereby one person (the trustor, grantor, or settlor) places assets under the management or supervision of another person or institution (the trustee) for the benefit of a third person (the beneficiary).

A person or institution that manages and administers a trust.

See applicable credit amount.

State laws that provide a method of holding assets for minors.

A provision in the law that allows a married person to give or leave an unlimited amount of assets to his or her spouse free of gift or estate taxes.

A legal document that details how your estate is to be distributed upon your death.