Estate Planning has its own vocabulary. To help you speak the language, we've created a glossary of the more commonly used words and phrases. This glossary is comprised of 26 individual pages, one for each letter of the alphabet. To find a particular word or phrase that starts with the letter "L" - simply scroll down the list below. If your word or phrase starts with another letter, please use the alphabet index below.
Last Will and Testament
A "Last Will and Testament" is a document by which a person (the testator) gives instructions regarding the rights of others over his or her property or family after his or her death. In the strictest sense, the term "will" is a general term, while the term "testament" applies only to dispositions of personal property. However, this distinction is seldom observed today. Instead, the terms "will" and "testament" are used almost interchangeably. In fact, the term "Last Will and Testament" is often used interchangeably with the terms "will" and "testament." For the disposition of property not disposed of by a Last Will and Testament, see "inheritance" and "intestacy."
Life insurance trust
Life insurance policies are often placed in trust so as to avoid estate taxes on the death proceeds following the death of the insured. These trusts, called "life insurance trusts," generally do not hold any other assets. In order to exclude the insurance death benefits from estate taxation, a life insurance trust must be irrevocable.
A "life interest" is an interest in property that terminates upon the death of the owner of the interest. A life interest generally entitles the owner to use and enjoy the property during his or her lifetime. The owner of the life interest does not have the right to determine who gets the property upon his or her death.
The term "lineal descendant" refers to a person who descends in a direct line from an ancestor. For example, a child is a lineal descendant of his father, his grandfather, his great-grandfather, etc. A "collateral descendant," by comparison, refers to a person who descends from a brother or sister of an ancestor. For example, a cousin, niece, nephew, aunt or uncle.See also "descent and distribution."