Estate Planning Terms to Know in Arizona

In Estate Planning, we have many different legal terms and titles in our documents in Arizona. Some of them are commonplace and others are based on old English common law. It can certainly become confusing when someone is referring to one term, and everyone else knows that term by a different name. For example, Personal Representative and Executor are really the same term, for someone in charge of administering an estate (either a probate or trust administration). Depending on what state you are from and on their choice of verbiage, you may know this person as a Personal Representative, an Executor, an Executrix, an Administrator, a Custodian, or a Fiduciary. All of these terms are technically correct when dealing in probate or if the decedent has a will-based estate plan. However, the term changes if we are using a trust-based estate plan. The person in charge of a trust could be called a Trustee, a Successor Trustee, a Trust Administrator, a Fiduciary, a Trust representative, or a Trust protector. The point of this isn’t to confuse, it is simply to highlight how the legal world has adapted and changed over the years.

To help you keep these terms straight, we are creating a list of titles for you that can help you to decipher who is supposed to do what in your Estate Plan. Remember, although we have different titles for items, you can have the same person performing multiple tasks under your estate plan. As we are an Arizona law firm, we will also be primarily focused on the main terms used in Arizona. One other item to remember is that there are three main goals of a complete estate plan:

• To avoid probate court and to make it as easy as possible when you pass away;
• To ensure that your assets go to the people you want them to go to; and
• To protect yourself during life from incapacity or the need for long-term care.

With those three items in mind, and using a mixture of trusts, financial powers of attorney, healthcare power of attorney, living wills, and pour-over wills, we can achieve those three goals. All of the titles listed below are actors that play a role in a complete estate plan.

The first term we will speak of is that of TrustMaker. We use this term as it is the simplest to understand. This is the person that creates a trust. They put their assets in the trust, and they develop the rules for the trust. With a revocable living trust, this person will usually reserve the right to make changes to the trust if they so wish in the future. A Trustmaker is also known as a Trustor, a Grantor, A donor, A principal, or a Settlor.

The second title we will mention is that of Personal Representative. A personal representative is the executor or administrator for the estate of a deceased person, but not someone with a trust. Personal representatives serve as fiduciaries of the beneficiaries of estates and have the duty to act in good faith, with honesty, loyalty, and candor, and in the best interests of the estate’s beneficiaries. The law requires personal representatives to follow the terms of the deceased person’s will. If the deceased person died intestate, or without a will, the personal representative will serve as the administrator of the intestate or probate estate. Other names for this title or roll include Executor, Executrix, Administrator, and Fiduciary. This person is most likely named in a will, or designated by a court to act in a probate matter. For the trust plans that we create here at Citadel Law Firm, the Personal Representative is named in our Pour-Over Will. This document is a safety net for those that fail to fully transfer their assets to their trust during life. If enough assets are left outside of a trust, then the Personal Representative can go to court and utilize the Pour-Over Will to have assets put into the trust so that we only have our one set of rules that apply to all assets.

Next up is Agent or Power of Attorney. We utilize agents mainly on power of attorney documents. This is the person that we will designate to make decisions for us if we become incapacitated and are no longer able to make our own decisions. There are two main types of powers of attorney: medical, and financial. Our agents can be simply called health care agent, or financial agent. They could also be called healthcare power of attorney, or financial power of attorney. Some other terms are Attorney-in-fact, Proxy, Fiduciary, Representative, Custodian or Guardian, or simply just POA. This person is usually the most important person that you will have performing duties under your estate plan. They will take care of you if you are sick and will continue to pay your bills and make medical decisions for you while you are alive. This power expires at death. This person must be trustworthy, as you are trusting them with your entire financial well-being, as well as your medical health.

The Final title we will mention is that of Beneficiary. This is the persons, charities, or organizations that you direct to inherit your assets. They are the beneficiary of your estate. These people might also be called Heirs, Devisees, Inheritors, Legatee, Grantee, Assignee, Survivor, or Next of Kin.

In conclusion, it isn’t as easy as it seems. As the law has expanded, so too has our vernacular and use of different terms to describe the same title or roll. If you come from another state, it is important to know that the terms in your estate plan may not match the above listed titles. It is always important to have your trust reviewed to see if there is any room for improvement under Arizona law. Having an experienced estate attorney review your estate plan can make a world of difference. Please feel free to reach out to our office at any time to schedule a free review, or to schedule a free consultation to look at options for creating a brand-new estate plan. Click here to schedule your free consultation or call (480)565-8020.

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