Question 1

Attorney-in-Fact

Accepted Answer

An agent appointed by a Power of Attorney to act on behalf of another person, referred to as the "principal." The attorney-in-fact can be granted powers to act in business, financial, or legal transactions.

For estate planning purposes, the benefit of appointing an attorney-in-fact is to have someone in place who can manage your finances and act on your behalf to maintain your assets if you become incapacitated and cannot communicate on your own behalf.

Question 2

Certificate of Trust

Accepted Answer

A document certifying the existence of a trust and showing a Trustee's authority to act on behalf of the trust. The Certificate of Trust contains all information most financial institutions or other third parties need to interact and transact with a Trustee regarding trust assets.

This document is much shorter than the trust itself and allows key information to be shared without exposing the entirety of the trust language to third parties.

Question 3

Codicil

Accepted Answer

An amendment to a Will, which changes, adds, or removes language to/from a Will. They do not replace the original language of the Will but exist separately from the Will to effectively create a paper trail to show how language of the Will has been changed over time.

If the original Will is several years old or if you are making major changes to the document, it is often advisable to just create an entirely new Will and revoke the old Will entirely.

Question 4

Conservator

Accepted Answer

A court-appointed fiduciary whose job is to manage assets for someone deemed legally incapacitated - meaning they cannot manage assets themselves. For estate planning purposes this position is most often considered for minors, who are considered legally incompetent, but may also be appointed for an adult who is incapable due to mental or physical incapacity.

This role can be supplanted by holding inheritance for an incapacitated person in a Trust for their benefit. In this case, a Trustee would effectively replace the need for a Conservator.

Question 5

Estate

Accepted Answer

A legal entity created to hold the property of a deceased person until that property can legally transferred to a new owner. The estate includes the sum of all assets (real property, personal property, investments, etc.) owned at the time of an individual's death that does not also have a joint owner or attached transfer mechanism (i.e. beneficiary, transfer-on-death designee, etc.).

Question 6

Estate Tax

Accepted Answer

A tax paid on the total value of an individual's taxable estate that is being transferred upon the individual's death. The tax itself is only levied on the value of the estate exceeding the exemption threshold.

For 2025, the estate tax exemption for Minnesota is $3,000,000 and the federal tax exemption is $13,990,000. Any tax due will only be levied on the value that exceeds these exemptions.

Question 7

Guardian

Accepted Answer

A court-appointed role responsible for making decisions for someone who cannot act independently. This is commonly minor children or incapacitated adults. Within the scope of estate planning, this role most commonly focuses on the care of minor children and includes providing for the housing, safety, education, and health care of children.

Question 8

Health Care Agent

Accepted Answer

An agent appointed in a Health Care Directive. This agent is responsible for making health care decisions and communicating those decisions to on behalf of the appointing individual to make health care decisions and communicate with the appointing individual's health care team.

Question 9

Heirs

Accepted Answer

Legal heirs are individuals who are entitled to inherit a deceased person's property if that person dies without a will. The hierarchy of legal heirs depends on the relationship to the deceased. In Minnesota, the path of inheritance for heirs is:

1.) spouse; 2.) children, 3.) parents, 4.) siblings, 5.) nieces and nephews - etc.

Question 10

Intestate/Intestacy

Accepted Answer

If a person dies without a valid estate plan, they are considered to have died "intestate." When intestacy occurs, the distribution of their assets is governed by state laws, which sets the priority of legal heirs to inherit the deceased person's estate.

Question 11

Irrevocable Trust

Accepted Answer

If a trust is irrevocable, then the person who created it cannot alter, amend, or revoke the trust after it has been established, except under very specific circumstances or with the consent of all beneficiaries. Once assets are transferred into an irrevocable trust, the grantor essentially gives up control over those assets.

Question 12

Last Will and Testament

Accepted Answer

A Last Will and Testament ("Will") allows a person to specify how their assets and property should be distributed after their death. It can also include other important instructions, such as who will act as the Personal Representative (executor) and will care for minor children.

Question 13

Personal Representative (Executor)

Accepted Answer

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Question 14

Power of Attorney

Accepted Answer

Document by which authority is granted to an attorney-in-fact to make legal and financial decisions on an individual's behalf.

Question 15

Probate

Accepted Answer

A legal proceeding used to facilitate the transfer of assets held by an estate to its new owner. Generally guided by the terms of the deceased person's Will, if they have one, or by statute if they don't.

Question 16

Revocable Trust

Accepted Answer

An entity created to hold and manage property for a specific purpose.

Question 17

Settlor

Accepted Answer

Individual who creates a trust

Question 18

Transfer-on-Death/Pay-on-Death Designation

Accepted Answer

Designation given to accounts or certain property that acts as a contractual beneficiary designation. These don't change ownership of property but trigger on death to transfer assets.

Question 19

Trustee

Accepted Answer

People responsible for administering a Trust and managing assets held in trust.

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Glossary of Terms