Getting Up to Speed on Estate Planning Basics

Jul 20, 2017 9:30:00 AM

Once you decide to start an estate planning practice or expand your existing practice into estate planning, you need to make the time and effort to learn the basics, including vocabulary, strategies, and documents. Without a basic understanding of these estate planning principles, you’ll struggle to both present your value to potential clients and implement estate plans for the clients you do win.

The language of estate planning alone can be confusing. Words like “testator,” “administrator,” and “executor” might seem like a foreign language now, but they’ll soon be part of your everyday conversations. That’s not to mention the many planning concepts and strategies you’ll soon recommend to your clients. Let’s take a closer look at the fundamental concepts and terminology of estate planning. 

What is estate planning?

Estate planning fundamentalsEvery attorney already understands what estate planning is, but it’s important to remember that many potential clients actually don’t. Part of your job is to help clients and potential clients look at the big picture and understand why estate planning is important regardless of age or income.

Be prepared to explain that estate planning is the process by which a person can:

  • Provide for themselves and their loved ones
  • Leave what they want to whom they want
  • Minimize taxes and avoid unnecessary fees and court costs
  • Care for themselves and their loved ones
  • Support the causes they care about

Estate planning is a process, rather than an event. Your clients’ plans will combine legal strategies that help them achieve their goals, address their concerns, and provide peace of mind. These plans will evolve over time and might include both lifetime and at-death components.  

Estate planning terminology

The basic terminology of estate planning will underpin everything you do as an estate planning attorney. Knowledge of this terminology and how to apply it correctly is critical to communicating with clients, drafting documents, and ultimately, the success of your practice. Let’s start by defining a few foundational will-based estate planning terms:

  • Testate. The condition of having died with a valid Last Will and Testament that covers at least part of the estate.
  • Intestate. The condition of having died without a valid Last Will and Testament.
  • Testor. Someone who makes a Last Will and Testament.
  • Heir. A person who receives assets.
  • Fiduciary. Someone who acts on behalf of another person and is legally obligated to act in the best interests of that person. Types of fiduciaries include:
    • Administrator. Person appointed by the court to administer an intestate estate.
    • Executor. Person named in a will and appointed by the court to administer a testate estate.
    • Personal Representative. Gender-neutral term used in some states to refer to executors and administrators.

In many cases, you’ll recommend your clients adopt a revocable living trust-based estate plan with a pour-over will to take care of any assets not in their trust and to name a guardian for any minor children. A trust is fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary. As you can probably tell from that definition, trusts carry additional terms that you’ll need to know in order best serve your clients. These terms include:

  • Trustor/Grantor. Person who establishes a trust.
  • Beneficiary. One or more individuals, trusts, or entities that receive assets from a trust.
  • Trustee. Person named in a trust or appointed by a court to administer trust assets.

There’s a lot to consider when starting or expanding your legal practice, but overlooking the details of estate planning could lead to poor plan execution and even lost clients.

A WealthCounsel membership provides you with the resources you need to get up to speed on estate planning basics. WealthCounsel’s Continuing Legal Education program offers specific tracks for new and transitioning attorneys to help you get up and running faster. Plus, our software helps you master document drafting with guided navigation. Contact us to learn more about all the benefits of WealthCounsel membership.

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