Estate Planning Glossary

Each term is tagged with the document type where it most commonly appears (Will, Trust, or POA), so you know the context. The glossary is also included as an appendix in the downloadable Estate Snapshot PDF that you share with clients. Use this article to prepare for estate planning meetings or to explain terms to clients in plain language.

[DOWNLOAD ESTATE PLANNING GLOSSARY PDF]

5-page glossary with per stirpes/per capita distribution diagrams

Produced by: FP Alpha | Terms: 22 definitions | Context: Accompanies the Estate Snapshot

Complete Glossary

Term	Applies To	Definition
Accumulated Earnings / Income	Trust	Some trusts continue to track net income from prior accounting periods that was not distributed to beneficiaries. This accumulated income may be treated differently from principal for distribution purposes.
Agent	POA & Trust	The fiduciary named to act on behalf of the “principal,” most often under a durable power of attorney or a durable power of attorney for healthcare. The agent must act in the principal’s best interests.
Contingent Gifts	Will & Trust	A “catch-all” provision that directs assets if the named beneficiaries or members of a class fail to survive the person making the gift. Common destinations include “heirs” or charity.
Crummey / Crummey Power	Trust	Most often associated with an ILIT. A trust provision granting beneficiaries a temporary power to withdraw funds gifted to the trust. Converts what would be a “future interest gift” into a “present interest gift” so it qualifies for the annual exclusion. Named after the Crummey v. Commissioner court case.
Executor	Will	The fiduciary responsible for managing an estate and ensuring that the terms of the Last Will are executed. “Executrix” is the less common female-gendered variation.
Family Trust	Will & Trust	Typical name of the “B Trust” in an A-B trust estate plan. Funded using the first-to-die spouse’s lifetime estate tax exemption. Usually benefits the surviving spouse and can benefit multiple generations. Trustee is typically directed to distribute net income and given discretion over principal.
Grantor	Trust	The person who transfers assets into a trust. Also called the Settlor. The grantor establishes the trust terms and funds it with assets.
HEMS	Trust	Health, Education, Maintenance, and Support. The most common distribution standard in irrevocable trusts. Directs the trustee to distribute funds for typical life expenses but legally restricts distributions to these categories. Often modified with “in accustomed manner of living” to acknowledge that HEMS standards differ across families and net worth levels.
Marital Trust	Trust & Will	Typical name of the “A Trust” in an A-B trust estate plan. After funding the B Trust (Family Trust), this trust receives the remaining assets of the first spouse to die. Designed so that the assets are included in the surviving spouse’s estate for estate tax purposes.
Net Income	Trust	Trust accounting income: dividends + interest + other income (e.g., rental) minus 50% of (expenses + fees + taxes). Capital gains are generally treated as principal, not income, for trust accounting purposes. Additional complex rules apply to retirement income distributions (IRA, annuity) which may default to a 10% income / 90% principal split.
Per Capita	Will & Trust	A method of dividing assets when a beneficiary predeceases the grantor. Per capita allocates assets equally among all surviving descendants at the same generation level. Example: if a parent gifts to 3 children and 2 predecease (one leaving 1 grandchild, the other leaving 2), per capita gives each of the 3 grandchildren an equal one-third share of the two-thirds passing down.
Per Stirpes	Will & Trust	The default method of division when a beneficiary predeceases the grantor. Assets are divided into equal shares at the generation closest to the grantor, and a predeceased beneficiary’s share passes to their own descendants. Example: same family as above — per stirpes gives the single grandchild one-third, while the other two grandchildren split one-third (each receiving one-sixth). See the PDF for visual diagrams comparing both methods.
Power of Appointment	Will & Trust	Grants the beneficiary flexibility to alter the distribution of a trust from its original terms. Limited powers cannot be exercised in favour of the beneficiary, their estate, or their creditors. General powers allow the beneficiary to direct assets as they determine best. Can be testamentary (exercised at death, often via a Will) or inter-vivos (exercisable during lifetime).
Principal (Trust)	Trust	The value of a trust that is not income or accumulated income. May include prior-period income that was not distributed and was added to principal value. Distinct from income for distribution and tax purposes.
Principal (POA)	POA	The person creating and signing the Power of Attorney. The Agent must act on behalf of the Principal and in the Principal’s best interests. Not to be confused with trust principal (the asset value).
QTIP	Will & Trust	Qualified Terminable Interest Property. An election often made by a trustee over the Marital / A Trust. Allows the trust to qualify for the unlimited marital deduction and inclusion in the surviving spouse’s estate. More restrictive than a typical Marital Trust, giving the first-to-die spouse greater control. Commonly seen in blended families and multiple-marriage situations.
Residual Gifts	Will & Trust	Also called the “residuary estate.” What remains in an estate or trust after payment of all taxes, expenses, fees, and specific bequests. Most often divided equally among a class of descendants.
Settlor	Trust	The person who transfers assets into a trust. Synonymous with Grantor.
Specific Gifts / Bequests	Will & Trust	Gifts of a specific asset or a specific dollar amount. These are ordered first in distribution — they receive precedence over residual gifts if the estate or trust does not have sufficient funds to fulfil all bequests.
Springing Power	POA	A power that does not become effective until a defined event occurs — typically the “incapacity” of the principal, however that term is defined by the document. Most commonly seen in powers of attorney.
Successor Trustee / Executor	Will & Trust	The fiduciary named to succeed the first or previously named fiduciary. Critical to review — as Jesse Studeven demonstrated, successor executors can be on hospice or deceased without the client knowing.
Testator / Testatrix	Will	The male / female gendered terms for the person who executed a Last Will and Testament. See also Executor.
Trustee	Trust	The fiduciary responsible for managing a trust and ensuring that the trust document’s terms are executed. Can be an individual, multiple individuals, or a corporate trustee (bank, trust company).

Key Concept: A-B Trust Structure

Several glossary terms reference the “A-B Trust” estate plan structure. Here’s how it works:

When the first spouse dies, the estate is split into two trusts. The B Trust (Family Trust / Credit Shelter Trust) is funded up to the deceased spouse’s estate tax exemption. This trust is irrevocable and not included in the surviving spouse’s estate. The A Trust (Marital Trust) receives the remaining assets and qualifies for the unlimited marital deduction, but is included in the surviving spouse’s estate at their death. If a QTIP election is made over the A Trust, the first-to-die spouse retains greater control over ultimate distribution. This structure is one of the most common you’ll encounter in Estate Snapshots.

Key Concept: Per Stirpes vs Per Capita

These two distribution methods produce very different outcomes when a beneficiary predeceases the grantor. The full PDF includes visual distribution diagrams showing both methods side by side. Here’s the quick comparison:

	Per Stirpes	Per Capita
Division Method	Divided at the generation closest to the grantor. Each branch receives an equal share.	Divided equally among all surviving descendants at the same level.
Example	3 children, child 2 predeceases with 3 grandchildren. Share split: Child 1 = 1/3, Child 3 = 1/3, each of Child 2’s 3 grandchildren = 1/9.	Same family. Share split: Child 1 = 1/3, Child 3 = 1/3, and the 2/3 passing to the next generation is split equally among all 4 grandchildren (each = 1/6 of total).
When Used	Default in most estate plans. Preserves the “branch” structure of the family.	Less common. Used when the grantor wants equal treatment of all descendants regardless of family branch.

How These Terms Appear on the Estate Snapshot

When you download an Estate Snapshot, the document walks through the client’s estate plan in a visual flowchart format. Here’s where the glossary terms typically appear:

Family overview section: Testator/Testatrix, Grantor/Settlor, beneficiaries, and family relationships
Fiduciaries section: Executor, Successor Trustee/Executor, Agent, Trustee, and their contact information
Trust flowchart: Family Trust (B Trust), Marital Trust (A Trust), QTIP provisions, Crummey Powers, HEMS distribution standards
Distribution provisions: Specific Gifts/Bequests, Residual Gifts, Contingent Gifts, Per Stirpes vs Per Capita elections
Powers section: Power of Appointment (limited vs general, testamentary vs inter-vivos), Springing Powers
Trust income/principal: Net Income calculations, Accumulated Earnings, Principal definitions

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Disclaimer: Information provided is for educational purposes. Your advisor does not provide tax, legal, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions.