PPC1 Probate & Tax key terms

The statutory scheme that distributes a decedent's probate property when no valid will exists, or when a will fails to dispose of all assets. State law fixes the shares of surviving spouses, descendants, and other relatives.

Property that passes under a valid will through the probate process. The will governs distribution, subject to spousal and family protections and to creditor claims against the estate.

A distribution method in which each branch of descendants receives an equal share, with a deceased child's share divided among that child's own descendants. Contrasts with per capita distribution at each generation.

A person's lineal descendants, including children, grandchildren, and more remote generations. Many wills and statutes define the term to include adopted persons and, sometimes, nonmarital children.

A separate testamentary instrument that amends, adds to, or partially revokes an existing will. It must be executed with the same formalities as a will and is probated together with the original will.

The act of witnesses signing a will to confirm the testator's signature and capacity. Witness requirements and any self-proving affidavit rules are set by state statute.

The mental ability a person must have when signing a will: knowing the nature of the act, the property owned, the natural objects of bounty, and the plan of disposition.

Coercion that overcomes a testator's free will and causes a will or gift to reflect another person's desires rather than the testator's intent. It is grounds for contesting the instrument.

A formal challenge to the validity of a will, typically raised during probate and alleging defects such as lack of capacity, undue influence, fraud, or improper execution.

The court-supervised process that validates a will, appoints a personal representative, identifies and values assets, pays debts and taxes, and distributes remaining property to beneficiaries.

Only the assets that pass under a will or by intestacy and are therefore subject to court administration. Nonprobate assets such as jointly held property and life insurance pass outside it.

Assets that transfer by contract or operation of law rather than through the probate court, such as payable-on-death accounts, retirement plans, life insurance, and property held in survivorship form.

The fiduciary appointed to administer a decedent's estate, called an executor when named in a will and an administrator when appointed by the court in intestacy.

The court-issued document authorizing a named executor to act on behalf of the estate, such as collecting assets, signing documents, and transferring title.

A statutory right allowing a surviving spouse to claim a minimum portion of the decedent's estate instead of taking under the will, protecting the spouse from disinheritance.

The legal obligation of a personal representative or trustee to act in the beneficiaries' best interests with loyalty, impartiality, and prudence, and to avoid self-dealing and conflicts of interest.

An arrangement in which a grantor transfers property to a trustee who holds and manages it for the benefit of one or more beneficiaries according to the trust instrument.

The person or institution holding legal title to trust property and administering it under the trust terms and fiduciary standards, including duties of loyalty, prudence, and impartiality.

A standard requiring fiduciaries to invest trust assets as a prudent investor would, considering the portfolio as a whole, the purposes of the trust, and diversification rather than isolated holdings.

A trust whose income is taxed to the person who created it because the grantor retains powers or interests that trigger the grantor trust rules of the Internal Revenue Code.

The starting value for federal estate tax purposes, including the decedent's property, certain lifetime transfers, jointly held interests, and insurance proceeds under the decedent's control.

The gross estate reduced by deductions for funeral and administration expenses, debts, casualty losses, and charitable bequests, before applying the marital and charitable deductions.

An unlimited federal estate and gift tax deduction for property passing to a surviving spouse in a qualifying form, generally limited to U.S. citizen spouses unless special trust rules apply.

An election to treat qualifying terminable-interest property left in trust for a surviving spouse as passing outright for marital deduction purposes, deferring estate tax until the survivor's death.

The per-donee amount a donor may give each year free of federal gift tax and without using lifetime exemption, subject to rules on present interests and gift splitting.

The federal credit that shelters a set lifetime amount of cumulative taxable gifts and estate transfers from tax, unifying the gift and estate tax exemption into one system.

The rule allowing a surviving spouse to use a deceased spouse's unused exclusion amount, provided a timely estate tax return is filed to elect and compute the deceased spousal unused exclusion.

The value used to measure gain or loss on sale of property. Inherited property generally takes a stepped-up basis equal to fair market value at the decedent's death.

The adjustment of inherited property's income tax basis to its fair market value on the date of death, generally eliminating pre-death appreciation from the beneficiary's taxable gain.

An election to value the gross estate as of six months after death, or on the distribution date for sold assets, available only when it lowers both the estate tax and the estate's income tax.

The federal estate tax return, filed to report the gross estate, deductions, and tax, and also used to elect portability and to make certain allocation elections.

The federal gift tax return used to report gifts exceeding the annual exclusion, split gifts, and certain transfers of future interests, and to track lifetime exemption usage.

The federal income tax return for estates and trusts, reporting income, deductions, and distributions, and computing the income tax owed by the entity or passed through to beneficiaries.

A tax concept that caps the amount of an estate's or trust's income that can be deducted for distributions and taxed to beneficiaries, determined by statutory adjustments to taxable income.

The individual income tax return filed for the year of death, covering income received before death and including the decedent's deductions and credits for that period.

A screening arrangement that prevents a lawyer with a conflict from accessing or sharing information about a matter, used to avoid imputed disqualification in a firm.

A situation where a lawyer's or fiduciary's personal interests or duties to another person could impair independent judgment, requiring disclosure, consent, or withdrawal.

The professional duty to protect information relating to a client's representation from disclosure, subject to exceptions such as client consent or legal compulsion.

A creditor's demand for payment of a debt owed by the decedent, which must be presented within the statutory period and is paid from estate assets before distribution.

The statutory deadline for filing a claim, return, or action. Missing it generally bars the remedy, so probate and tax calendars must track each filing date.