Legal Terms Glossary

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Advance Health Care Directive

This is a document by which a person may set out his or her directions concerning health care, end-of-life decisions, and related concerns. This form is comprised of three main components:

  • Power of Attorney for Health Care – allowing you to designate an “agent” to make health care decisions on your behalf should you be incapable, such as in a coma;
  • Health Care Directive – allowing you to direct that your health care provider provide, withhold, or withdraw health treatment for yourself under circumstances where your physicians expect you to die within a relatively short period of time; and
  • Additional Directives — granting you options such as organ donation and the ability to give instructions for burial/cremation.

(CPC §4670-4678; 4680-4691)

Beneficiary

An individual or organization to which a gift of property, whether real or personal, is made.  Such an individual or organization may receive the gift of property under a legal instrument such as a will, trust, or a non-probate transfer such as a life insurance policy.  A beneficiary is distinguished according to the legal instrument or process by which the gift of property is made.  For example:

  • For an individual who dies intestate (without a will), a beneficiary is called an heir.  Heirs are often the surviving spouse and/or the direct descendants of the decedent.  (CPC §6400-6414)
  • For an individual who dies with a will in which they name a beneficiary to inherit their estate, such a beneficiary is called a devisee.  (CPC §6102 & 7000)
  • For an individual who dies with a trust, a beneficiary is any individual or organization specifically named by the trust instrument to receive a gift of property from the trust assets.  (CPC §15800-15805)

Community Property

Any property acquired by either spouse during marriage, except for property acquired by gift or inheritance.  As for community property, each spouse owns an undivided one-half (1/2) interest in the property.

For example, if the wife’s friend gifts the wife $10,000, that would be separate property.  Similarly, should either spouse’s parent die and he or she inherited money, such inheritance would be considered separate property.  (CPC §28)

Contingent Beneficiary

An individual or organization to which a gift of property is made under a legal instrument such as a will, trust, or a non-probate transfer such as a life insurance policy, but only in the event one or more prior conditions occur such as the death of a primary beneficiary.  A contingent beneficiary has no actual interest in the assets conveyed by the legal instrument unless the prior conditions are actually satisfied.

For example, a trustor names her child as the beneficiary of her trust estate.  She also provides a non-profit organization as contingent beneficiary on the condition her child predeceases her.  During the Trustor’s life, she alone holds all the interest in the trust assets.  As a contingent beneficiary, upon the death of the trustor, the non-profit organization has no actual interest in the trust assets nor can they enforce any perceived rights unless her child has in fact predeceased her.

Devise

A gift of real or personal property made by a will.  An individual may devise to heirs, a trust, a non-profit corporation, or other entities.  (CPC §6102; 6300-6303)

Devisee

An individual or organization who is designated in a will to receive a devise.

For example, a will may direct that any property not already placed in a trust or not disposed of by a non-probate transfer such as a life insurance policy, pass to the individual’s trust to become part of the individual’s trust estate.  In such a case the trust or trustee is the devisee. (CPC §6300-6303, 21117)

Descendants

Descendants are generally considered to be the children, grandchildren, or great grandchildren of the decedent. The determining characteristic of a descendant is the parent and child relationship. Children who are adopted by the decedent, children of the decedent born outside of marriage, and any foster children of the decedent may also be considered descendants.  (CPC §6205, 6450-6455, 21115)

Heir

An individual who would inherit property from a decedent who died intestate (without a will).  In the event an individual dies intestate, heirs are determined by reference to intestate succession which considers any surviving family members of the decedent, such as a surviving spouse and/or children.  If there is no surviving spouse or children, intestate succession will extend to descendants, such as grandchildren, or other relatives, such as parents or siblings.  (CPC §44, 248, 6400-6414).

Intestate

An individual who has died without a will.  If an individual dies intestate, any part of their estate that is not disposed of by a non-probate transfer (such as a trust or life insurance policy), will pass to the individual’s heirs by intestate succession. (CPC §6400-6414).

Intestate Succession

Intestate succession refers to the state laws governing the distribution of an individual’s property among his or her heirs, in the event such individual dies intestate (without a will).  (CPC §248, 6400-6414)

Medi-Cal Recovery

When a Medi-Cal recipient dies, the state may make an “estate recovery claim” for repayment of certain health care services which the decedent received and were paid for by Medi-Cal. Since January 1, 2017, certain assets are exempt from such a claim, including real property held in a trust (such as a revocable living trust), and property held in a joint tenancy, survivorship and/or life estate arrangement.

Non-Probate Transfer

A legal instrument or designation made on financial plans and accounts, by which an individual may transfer real or personal property upon their death to a beneficiary without requiring a probate court proceeding.  The most common legal instrument to effect such a transfer is a living trust.  The most common designations on financial plans or accounts are those requested for insurance policies, pension plans, and individual retirement accounts.  (CPC §5000-5003)

Power of Attorney

A Power of Attorney is a document whereby an individual (the “principal”) can grant to another person (the “holder,” “attorney-in-fact,” or simply “agent”) the power to conduct functions, typically of a financial nature, on his or her behalf. A power of attorney is considered “durable” if the authority to conduct functions remains exercisable even if the principal should become incapacitated. In California the most commonly used general power of attorney is a Uniform Statutory Form Power of Attorney.  (CPC §4124; 4401-4409)

Power of Attorney for Healthcare

A Power of Attorney for Health Care allows you to designate a person (and any potential “backups”) as your agent, to make health care decisions on your behalf should you be incapable, such as in a coma. It is normally one of three parts that comprise a California Advance Health Care Directive. (CPC §4670-4678; 4680-4691)

Probate Fees

Probate Fees are the attorney and executor fees allowed by statute in a court-supervised administration (i.e., probate) of one’s estate. While there may be cause to request extraordinary fees from the court, the current fee structure is as follows:

  • Four percent on the first one hundred thousand dollars ($100,000).
  • Three percent on the next one hundred thousand dollars ($100,000).
  • Two percent on the next eight hundred thousand dollars ($800,000).
  • One percent on the next nine million dollars ($9,000,000).
  • One-half of one percent on the next fifteen million dollars ($15,000,000).
  • For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court.

For example, Probate Fees payable to the executor for the administration of an estate with a hypothetical value of $900,000:

  • 4% on the first $100,000: $ 4,000.00
  • 3% on the next $100,000: $ 3,000.00
  • 2% on the next $700,000: $14,000.00

Total: $21,000.00.

(CPC §10800-10805; 10806-10814)

Springing Power of Attorney

A power of attorney that “springs” into effect once a specified event or contingency has occurred, in accordance with the terms of the power of attorney document. For example, an individual could create a power of attorney that does not become effective until they take their next vacation or business trip to a foreign country. (CPC §4030)

Trust

A trust is a relationship, typically spelled-out in a written document, called a “trust agreement” or “declaration of trust,” whereby the creator of the trust (the “trustor”) transfer their property into the managerial hands of a “trustee” (who is typically the trustor during their lifetime) for the benefit of designated “beneficiaries” (typically the trustor during their lifetime, followed by a spouse and/or descendants upon the death of the trustor).  (CPC §15200-15212)

Testate

An individual who has died leaving a will.

Testator

The individual who makes and executes a will. (CPC §6110-6113)

Will

A will is a legally binding document that, upon the will creator’s (the “testator’s”) death, governs the disposition of the testator’s assets which have not been titled in a trust or devised by a non-probate transfer.  A will is revocable or amendable during the testator’s lifetime. (CPC §6100-6390)