Glossary of Terms

A B C D E G H I J L M N O P R S T U V W Y Z


A

Abandon – To give up rights, property, or a family relationship by desertion without intention to return or reclaim.

Abstract of Title – A condensed, chronological history of the recorded titles to a piece of real estate.

A/B Trust – For use when a married couple has a combined estate of more than $11,700,000. This Trust helps to avoid estate taxes by preserving two unified credit/applicable credit amounts without having to file a 706 Estate Tax Return and claim portability.

Acceleration Clause – States that the balance of a debt shall be considered due upon the occurrence of an event, for instance the default of a single installment.

Addendum – Something added; a supplement.

Adverse Possession – Continuous, open, hostile, and notorious possession and occupation of real estate for a statutory length of time by a trespasser attempting to claim or establish title.

Affiant – A person who swears to and signs an affidavit.

Affidavit – A written and signed statement sworn to under oath.

Agency – An arrangement whereby a person or corporation acts on behalf of another person or corporation with his/her/its permission.

Agent – One who represents, does business for, or acts on behalf of another with the other’s permission.

Alien – An individual who is not a United States citizen.

Amend – To revise, change, or alter.

Amortization – Reduction of a debt, such as a mortgage, by regular payments on the principal together with each periodic interest payment.

Annuity – An arrangement whereby a specific sum is paid to a person in periodic payments of one or more per year.

Antenuptial Agreement – A pre-wedding contract made between a man and woman declaring the agreed rights and obligations of each during their marriage and any subsequent divorce or separation.

Arrears – The amount that a debt is overdue or unpaid.

Asset – Certain holdings, cash or property, having value that must be evaluated during the eligibility determination/benefit calculation.

Asset List – Summary of assets owned by a Living Trust.

Assign – To convey or transfer, as to assign property rights or interests to another.

Assignment – The transfer of property by the assignor to the assignee.

Attest – To certify the signatures on a document by signing the document as a witness.

Attorney-at-Law – A lawyer, a person who is licensed to practice law, try cases in court, and give legal advice.


B

Back-up Trustee – Also called Successor Trustee; person or institution named in the Trust agreement who can take over should the first trustee die, resign or become unable to act.

Balloon Payment – A final payment that is more than twice the amount of earlier regular payments.

Bankrupt – The condition of an insolvent debtor in which his or her property is turned over, under jurisdiction of a federal bankruptcy court, to a Trustee to be distributed for the benefit of creditors.

Beneficiaries – In a Living Trust the persons and/or organizations who receive the Trust property after the death of the Trust grantor.

Bequeath – To leave personal property to someone by Will; to make a bequest

Bill of Sale – A document attesting to the conveyance of ownership of property, other than real estate, from the seller to the buyer.

Binder – A preliminary agreement. In insurance, a binder serves to provide immediate coverage until such time as a written policy is issued.

Blanket Mortgage – A mortgage that covers more than one piece of real estate.

Blindness – Central visual acuity of 20/200 or less in the better eye with the use of correcting lens, or a limitation in the field of vision of the better eye such that the widest diameter of the visual field subtends an angle no greater than 20 degrees.

Breach of Contract – Failure to perform one or more conditions of a contract without a legal excuse.

Broker – A middle person who transacts business for the benefit of others for a commission, as does a real estate broker, stockbroker, etc.


C

Chattel – Personal, tangible, movable property.

Chattel Mortgage – A mortgage on personal, movable property, such as furniture, an auto, or cattle.

Clear Title – A title to property that has been determined to be free from all liens and encumbrances.

Closing – The meeting at which the buyer and seller of a piece of real estate transfer ownership with the exchange of money and the deed to the property.

Codicil – A written change or amendment to a Will.

Collateral – Property used as security for a loan. Also refers to that which is supporting, corroborating, or secondary. Collateral evidence.

Community Property – A principle recognized in some states whereby property acquired by a husband or wife during their marriage to each other becomes the property of both. Inheritances and gifts are often exempt.

Condemnation – A legal declaration taking privately owned real estate for public use without the owner’s consent with the payment of compensation. This may be done pursuant to a governmental body’s right of eminent domain. Also the declaring of a premises to be unsafe for human habitation.

Contract – A legally enforceable, explicit, written agreement between two or more parties and made for a consideration.

Convey – To transfer ownership of property.

Conveyance – The document by which title to property is transferred from one party to another. Also, the act of transferring ownership of property.

Corporation – An association of one of more shareholders having its own legal entity separate from the individual shareholders.

Corporation Close – A corporation incorporated by a small group of individuals, such as a family, in which the majority of stock is ordinarily held by the officers and directors.

Corporation “S” – A corporation that chooses, as permitted by the Internal Revenue Service, to be taxed as a partnership. Stockholders’ individual incomes are taxed rather than that of the corporation.

Cosigner – A person who, by his or her signature, guarantees the payment of a debt should the original signer default; a co-maker.


D

Death Probate – The legal proceeding in the probate court, designed to change title of the property of a deceased person to any person who owns property in his name alone at the time of his death. Your estate will go through probate whether or not you have a Will.

Decedent’s Trust – Consists of one-half of the decedent’s community property, up to $11,700,000. The surviving spouse has use of the income and assets, if necessary for support.

Deed – The legal instrument or document used to transfer the ownership of real estate.

Deed, Warranty – A deed in which the seller agrees to defend the title against any liens or claims, thereby warranting the title.

Deed, Quit Claim – A deed relinquishing and denouncing all of a seller’s claims to a property but does not guarantee against claims by others.

Default – Failure to meet a legal obligation, as in failure to pay a debt when due. Also failure to take steps required in a legal action.

Dependent – This means the same thing as it does for federal income tax purposes. Someone a person is entitled to take as a deduction on your personal income tax return.

Disability – The inability to engage in any substantial gainful activity due to a medically determinable physical or mental impairment. The impairment must be expected to result in death, or have lasted or be expected to last for at least twelve months.

Disabled – Having an inability to engage in any substantial activity due to any medically determinable physical or mental impairment that has lasted or can be expected to last for a period of at least twelve consecutive months or can be expected to result in death. It also refers to having an incapacity for full employment of ordinary legal rights or an impediment to marriage.


E

Easement – The legal right to use of a limited portion of another’s land for a specific purpose, usually for the user’s access to his or her own land.

Eminent Domain – The right of a government unit to take private property for public use without the owner’s consent but upon payment of just compensation.

Escrow – The delivery of a document, money, or property to a third party to be held in Trust by the third party until certain conditions of an agreement between other parties have been met.

Estate Lawyer – A lawyer that helps you create an estate plan to protect your family and assets; provides a way to avoid probate and reduce or eliminate estate taxes.

Estate Planning – The creation of a plan for managing your wealth while you are alive and distributing it after your death. Your estate plan should protect you, your family and property from guardianships, death probate, death taxes and provide for the distribution of your property upon your death.

Estate Taxes – Federal or state taxes on the value of the property left at death; often called inheritance tax or death tax.

Estoppel – A restraint to prevent a person from producing evidence to contradict or deny his or her own previous assertion.

Executor – Person or institution named in a Will to carry out its instructions (female is executrix); called Personal Representative in Florida.


F

Fee Simple – Describes an estate, the inheritance of which confers unconditional ownership and possession of real property that can be sold or left to heirs without restriction. Also expressed as “in fee” or “fee simple and absolute”. Real property so conveyed is usually conveyed “to Jones in fee simple”.

Fiduciary – Person having the legal duty to act primarily for another’s benefit, implies great confidence and trust and a high degree of good faith; (usually associated with a Trustee).

Foreclosure – To legally terminate a mortgage and take possession of the mortgaged property by court order after default by a borrower.


G

Garnishment – A legal proceeding whereby a debtor’s salary is withheld from him or her by the debtor’s employer and paid to a judgment creditor instead of to the debtor.

Grantor – The person who sets up or creates the Trust; also called the Trustor or Settlor.

Gross Value – The value of an estate before the debts are paid; (probate fees are usually calculated on the gross value of the estate).

Guarantee – To promise to be responsible for a debt or legal obligation of another in the event of default. To promise that one will do a specific thing. A warranty to assure the continued quality of a thing. To furnish security for an arrangement.

Guardian – One who is legally responsible for the care and well being of another person; if appointed by a court, the guardian is under the court’s supervision.


H

Health Care Power of Attorney – Authorizes someone to make health care decisions for you if you become incapacitated.

Heir, Legal – One who inherits property pursuant to the laws of intestacy; an heir at law.

Holographic Will – A Will written entirely in the hand of the maker.

Homestead – A residence and related property exempt from execution for general debts in bankruptcy.

Hospice – A Medicaid program that provides special services for terminally ill individuals.

Hypothecate – To pledge property as security but without transfer of title or possession to the lender.


I

Incapacitated – An individual whose sickness or disability affects his or her ability to care for the individual’s children or perform employment and training activities.

Incompetence – A person declared incompetent by the court (legal) or the person’s inability to function normally (functional).

Incapacitated/Incompetent – One who is unable to manage his/her own affairs, either temporarily or permanently; also applies to minor children; lack of legal power.

Irrevocable Trust – Opposite of Revocable Trust; a trust that cannot be changed, revoked or canceled once it is established.

Intestate – Without a Will. The legal process of the probate court receiving all claims, ordering creditors paid and property distributed according to the laws of the state (state’s Will).


J

Joint Ownership – Also called joint tenancy; when two or more persons own the same property; death of a joint owner immediately transfers ownership to the surviving joint owner(s); different from tenancy-in-common.

Judgment – The final determination of a court.


L

Landlord – The owner of real property who rents or leases it to another.

Lease – A written contract in which a landlord (lessor) and a tenant (lessee) agree to the conditions whereby the tenant has a right to the possession and use of a specific property for a specific consideration.

Lessee – One who leases or rents real property.

Lessor – The owner of real property who rents or leases it to another.

License – Legal permission to engage in an activity that would be illegal without the authority of the license.

Lien – A legal claim that one party has against the property of another as security for a debt.

Life Insurance – A contract under which the insurer agrees to pay a specified amount upon the death of the insured.

Liquidate – To coMaintenance care or care that is expected to last for an exceptionally long period of time not covered by medical insurancenvert assets to cash. To settle a business affair or pay off a debt or obligation.

Living Will – A written document stating you do not wish to be kept alive by artificial means when the illness or injury is terminal.

Long-Term Care – Maintenance care or care that is expected to last for an exceptionally long period of time not covered by medical insurance.


M

Maker – One who makes or signs a promissory note payable to another.

Marketable Title – A title that any reasonably informed buyer can assume to be sufficiently free and clear of encumbrances for the transaction of business.

Medicaid – A state administered federal program of medical assistance available to groups of specific individuals defined in policy. Federal matching funds for Medicaid are available to states under Title XIX of the Social Security Act, as amended. The purpose of this federal funding is to enable states to provide a more effective medical assistance program to individuals identified on a defined basis of financial need.

Medicare – A federal insurance program based on entitlement. It covers aged and disabled individuals who have sufficient work history. There are two parts: hospitalization (Part A) and medical coverage (Part B).

Minor Child – A child under the legal age for an adult; varies by state (usually under 18 or 21).

Modify – To change or alter.

Mortgage – A contract pledging real property as security for a debt the lender being the mortgagee and the borrower being the mortgagor.


N

Notary Public – A person authorized by law to perform certain public functions such as witnessing signatures, administering oaths, and taking affidavits.

Novation – The writing of a new contract that supersedes a previous contract between the same parties and that is related to the same matters.


O

Oath – A solemn avowal made as to the truth of a matter, the intentional breaking of which is cause for prosecution for perjury.

Option – An agreement giving one of the parties the right to buy or sell property at a specific price within a specific time.


P

Parent – The natural, legal, or adoptive father or mother of a child.

Partnership, General – A relationship between two or more parties, usually defined by a written agreement, whereby each furnishes specific material or nonmaterial assets (such as labor) for the joint conduct of a business and each shares profits and losses therefrom in specific proportions.

Partnership, Limited – A contract between two or more persons whereby the active partner or partners operate a business and are solely responsible for its debts and commitments and who share its profits with others; limited partners, who have invested only money (rather than time and effort) in the venture.

Patent – A document granted by the federal government giving an inventor exclusive rights to manufacture, sell, and otherwise exploit an invention for a specific period of time.

Personal Property – Movable property (as opposed to real property which is permanent, such as land); includes furniture, automobiles, equipment, cash and stock.

Petit – Petty; on a lesser scale; of minor significance, as distinguished from grand.

Petition – A formal request for action usually court action.

Plaintiff – A complainant; one who initials a lawsuit against the defendant.

Plat – A map of an area that shows streets, lots, and the locations of boundary markers, including measurements as surveyed.

Pour-over Will – A short Will often used with a Living Trust; states any property left out of your Living Trust will become part of (“pour over” to) your Living Trust upon your death.

Power of Attorney – A legal document giving another person full legal authority to sign your name on your behalf in your absence; different from the fiduciary duty of a Trustee. It ends at disability or death and some states permit a durable power of attorney which is valid through disability and ends at death. These are general powers of attorney. There are also limited powers of attorney which give someone only limited authority for a very specific purpose (for example, to sell a car).

Premises – A specific parcel of land or specific portion of a building. Also refers to the preliminary statements explaining or describing a document.

Probate – To prove officially after the death of a testator that his or her Will is authentic, valid, and properly executed so that its provisions may be carried out.

Proceeds – The amount of money gained; the financial yield of profits from a particular venture. Also the amount of a money judgment handed down by a court.

Promissory Note – A written instrument in which the maker promises to pay the bearer of the note a specific sum, with interest, at a specific time, or on demand, in payment of a debt.

Property – Anything that can be owned. Real property refers to land and its buildings. Property other than real property (real estate) is referred to as personal property, personalty, or chattels.


R

Real Property – Land and property which is “permanently” attached to the land (such as a building or house).

Receiver – A court appointed officer who holds possession of a defendant’s property during civil litigation and who then may be ordered to dispose of the property under direction of the court, as in a foreclosure or bankruptcy. Such property is said to be in receivership.

Reciprocity – The recognition in one state of the laws, judgments, rights, and licenses granted by another state in exchange for similar recognition of such laws, judgments, rights, and licenses by the other state.

Referee – A court appointed officer having the power to take testimony, hear arguments, and arbitrate disputes.

Release – A document relinquishing a claim or freeing one from an obligation or responsibility.

Remainderman – One who is entitled to an estate by gift or by bequest only after the termination of someone else’s interest in that estate.

Rescind – To cancel or annul; to make no longer legally binding and to return the parties to a contract to a position of never having made the contract.

Resolution – A determination by court; the successful arbitration of a dispute.

Retainer – An initial, advance payment to an attorney to secure professional services and, occasionally as a matter of legal tactics, to secure an attorney’s refusal to represent one’s adversary in a case.

Revocable Living Trust – Opposite of Irrevocable Trust; a Trust in which the person creating it retains the power to change, revoke or cancel the Trust during his/her lifetime. This Trust is used primarily as a probate and guardianship avoidance tool.

Riparian Rights – The special rights of an owner whose land borders on rivers, streams, and other waterways. 

Run with the Land – A covenant is said to run with the land when it passes from one owner to the next with the title, such as restriction upon a particular use of the land or type of building to be constructed thereon.


S

Sale – The transfer of ownership of property in exchange for a sum of money.

Sale, Executed – A completed sale.

Sale, Executory – An incomplete sale; a sale that will be complete when all conditions of the sales contract have been met.

Satisfaction – Payment of or in some other manner discharging an obligation or debt.

Seal – To authenticate or confirm. A stamp or other device used to certify or authenticate a document.

Security Deposit – Money left on deposit with a landlord by a tenant to insure that the tenant will abide by a lease agreement. A landlord may use all or part of a security deposit to pay for any damages that may be caused by a tenant. Such deposit may also be used to pay liquidated damages in the event that a tenant requests premature termination of a lease.

Severalty – Refers to the holding of property alone and without another person having any right of ownership.

Special Needs Trust –  A Trust under which the individual is the beneficiary of all or part of the payments from the Trust. The distribution of Trust payments is determined by the Trustee, who has discretion with regard to amounts to be distributed to the individual. A properly drafted Special Needs Trust will allow a beneficiary to receive some monetary distributions but not lose Medicaid or SSI benefits.

Stock – A certificate held by a stockholder as evidence of ownership of a stated number of shares of a corporation.

Stockholder – One who owns stocks in a corporation.

Sublet – The renting by a tenant, to a third party, of all or part of the premises that the tenant is leasing from a landlord.

Subornation – The crime of inducing another person to commit perjury.

Subscribe – To consent to or to affirm the contents of a document by signing one’s name to the document.


T

Tangible – Material; capable of being touched, as distinguished from intangibles, such as easements and rights.

Tenancy – A right to possess property either by lease or by title.

Tenancy, Joint – The joint ownership of real property by two or more persons.

Tenancy at Will – The possessing of real property with a lease of indefinite term. Either landlord or tenant may terminate the tenancy by written notice to quit.

Tenancy by the Entirety – The holding of real property by a husband and wife jointly, with the right-of-survivorship so that on the death of either the other becomes sole owner. Neither can sell his or her interest without the consent of the other.

Tenancy for Life – The possessing of real property for the duration of one’s life.

Tenancy for Years – The possessing of real property for a specified limited time, usually for years, but may be for weeks or months.

Tenancy in Common – The ownership of real property by two or more people, each with an undivided interest in it and all with equal right to possession of it. The undivided interests may or may not be equal. Upon the death of a tenant in common, his or her interest does not pass to the survivors but becomes part of his or her estate.

Tenant – One who holds title, lease, or right to possession of real property.

Term Insurance – A form of life insurance having no cash surrender value and generally furnishing insurance protection for only a specified or limited period of time.

Testamentary Trust – A Trust set up in a Will that only takes effect after death.

Testate – One who dies with a Will.

Testator – One who executes a valid Will.

Title – Legal ownership of property; a document proving ownership.

Title Search – A review of public records to determine if the title to a parcel of real estate is free of encumbrances (such as mortgages, judgments, tax or other liens) restrictions or easements.

Trespass – An illegal intrusion into real property, or a disturbance of real property that is in the legal possession of another.

Trustee – Person or institution agreeing to accept and manage property according to the instructions in the Trust agreement.

Trust Transfer Documents – Copies of deeds, assignments, etc, showing which assets were transferred to the Trust.


U

Undivided Interest – The right or interest in real property whereby each tenant in common, tenant by the entirety, or joint tenant has equal rights to use of the entire property.

Usury – The crime of charging a rate of interest on a loan that is greater than the amount permitted by law.


V

Vacate – To set aside or annul a judgment. Also, in real estate law, to quit a premises.

Void – Of no legal force; null; invalid.


W

Waiver – A voluntary relinquishment or renunciation of a claim, right, or privilege.

Warrant – A judicial writ authorizing the execution of a judgment or the making of a search, seizure, or arrest.

Warranty – A statement of assurance by the seller or manufacturer that goods are as represented to the buyer; also an assurance that goods or property will be repaired or made serviceable if found defective within a stipulated period of time.

Will – A legal instrument by which a person declares how his or her property is to be distributed after death.


Y

Yield – To surrender; to give up.


Z

Zoning – The setting apart of specified areas of a town, village, or municipality for specified activities or types of construction.