Estate Planning & Wealth Transfer Terms & Definitions

Asset protection involves legal strategies and structures designed to safeguard an individual's or entity's wealth from potential claims by creditors, lawsuits, and other liabilities, particularly crucial for real estate investors.

A beneficiary is an individual, group, or entity designated to receive assets, property, or benefits from a will, trust, life insurance policy, or other legal instrument.

Estate planning is the process of arranging for the management and disposal of a person's assets, including real estate, during their life and after death, to minimize taxes and ensure wishes are met.

An executor is the individual or institution named in a will to manage the deceased's estate, pay debts, and distribute assets, including real estate, to beneficiaries.

Gifting property is the transfer of real estate ownership from one party to another without financial consideration, primarily used for estate planning or family support, with significant tax and legal implications.

A contract where an insurer pays a death benefit to beneficiaries upon the insured's death, in exchange for premiums. For real estate investors, it's a vital tool for risk management, wealth transfer, and leveraging cash value for investment opportunities.

Premature death in real estate investing refers to an investor's unexpected passing before their financial and estate plans are fully established, leading to potential financial, operational, and legal challenges for their real estate portfolio and heirs.

Probate is the legal process of proving a will's validity, settling a deceased person's estate, and distributing assets to heirs or beneficiaries under court supervision. It ensures proper asset transfer and debt settlement.

A real estate trust is a legal arrangement where a property owner transfers title to a trustee, who holds and manages the property for the benefit of designated beneficiaries, offering advantages like privacy, asset protection, and streamlined estate planning.

A trustee is an individual or entity legally entrusted with managing assets or property for the benefit of another party (the beneficiary) under the terms of a trust agreement, upholding strict fiduciary duties.

A Will is a legally binding document that specifies how an individual's assets, including real estate, should be distributed after their death, and designates an executor to manage the estate.