Definitions

Annuity: The periodic payment of a definite sum of money, with such payments to continue for life or for a definite number of years.

Beneficiary: A generic term that refers to a person or an entity that is entitled to receive something. For example, a beneficiary of an estate or trust or a beneficiary of life insurance or retirement benefits.

Estate: All that someone owns in real estate, personal property, finances and other assets. Commonly, all the possessions belonging to someone who has died and are subject to the probate process.

Estate Planning: The process of arranging one's personal and financial affairs.

Estate Tax: Taxes assessed by the federal government upon a decedent's right to transfer property. Estate taxes are intended to raise revenue for the government and break up a family's wealth so that the nation's wealth does not concentrate in the hands of a few families.

Heir: A person who inherits property from the estate of a deceased person who died without a will.

HIPAA: Stands for the Health Insurance Portability and Accounting Act of 1996. HIPAA improves healthcare delivery by standardizing electronic data interchange and protects confidentiality and security of health data through setting and enforcing standards.

Irrevocable Trust: The trust that, once established, cannot be changed or revoked by the Grantor, the Trustees or the Beneficiaries.

Long-Term Care: A term used in referring to the care needed of an individual with a chronic illness or disability that prevents them from caring for themselves for long periods of time.

Long-Term Care Insurance: A private insurance policy to help pay for some long-term medical and non-medical care, like help with activities of daily living. Because Medicare generally does not pay for long-term care, this type of insurance policy may provide coverage for long-term care that you may need in the future.

Medicaid: A federally-funded, state-run program that provides medical assistance for individuals and families with limited incomes and resources. It pays for health care costs, including: nursing home care, vaccinations for children and medical care for disabled individuals.

Medicaid Planning: Along with qualifying you for Medicaid benefits, Medicaid planning seeks to accomplish the following goals: sheltering your countable assets, preserving assets for your loved ones, and providing for your healthy spouse (if you are married).

Medicare: The federal health insurance program for: people 65 years of age or older, certain younger people with disabilities, and people with End Stage Renal Disease.

Patient Advocate Designation: A legal document authorizing a person you select to manage your health care decisions if you become incapacitated. In Michigan, this document is called the Patient Advocate Designation, however, it is also commonly referred to as an Advanced Directive or Medical Power of Attorney.

Personal Representative: In other states the Personal Representative is called the "Executor." The Personal Representative is appointed by the Will and is responsible for overseeing the probate process and distributing the assets.

Power of Attorney: Authorizes the people you select to manage your property if you become incapacitated. Power of attorney may be drafted so that it would only become effective upon the disability or incapacity of the person in question, or so that it is effective immediately.

Probate: The process of proving a will and transitioning the assets from the deceased person to his or her heirs after death. So-called "living probate" is the process appointing an individual as guardian and/or conservator over another person who is: a minor, incapacitated or someone who is otherwise unable to care for themselves.

Probate Court: A court that handles family related legal issues. Examples of matters falling into the jurisdiction of the probate court include estates, divorce, adoptions, guardianships, and legal matters involving juveniles. In Washtenaw County, the Court that oversees adoptions, divorces and Juvenile law is also called the "Family Division," and the Court that oversees estates, adult guardianships and the mental health docket is called the "Probate Court." There are two Probate Judges in Washtenaw County, the Honorable Nancy Francis and the Honorable Darlene O'Brien. Judge Francis oversees the domestic relations cases and Judge O'Brien hears the juvenile, estate and guardianship actions.

Revocable Trust: Often called a "living trust," a revocable trust is created so that when the person who creates the trust dies, the trust does not die. There is a person who is promoted to be the trustee at that time.

Social Security: The comprehensive federal program of benefits providing workers and their dependents with retirement income, disability income, and other payments. The Social Security tax is used to pay for this program.

SSDI: Social Security Disability Insurance. This enable workers who are employed in covered employment and who have a medical condition that meets Social Security's definition of disability to collect benefits while they are unable to work.

SSI: Supplemental Security Income. A federally-funded needs-based disability program for adults and children which provides monthly cash benefits, and in most states, automatic Medicaid eligibility.

Testator/Grantor/Settlor: In the context of a trust, this refers to a person that established a living trust. It is also used to refer to one who is transferring real estate in a deed.

Trust: An entity created which holds assets for the benefit of certain persons or entities with a trustee as manager. During the life of a trust, profits, and sometimes, a portion of the principal, may be distributed to the beneficiaries, and at sometime in the future the remaining assets will be distributed to the beneficiaries.

Will: A written document which directs the Probate Court how to distribute assets. A will usually names an executor (in Michigan an executor is called a Personal Representative) to manage the estate and see the estate is settled.