Legal Terms You May Need to Know

1031 Exchange: Tax process that allows you to sell one or more appreciated rental or investment real estate and defer the payment of your capital gain and depreciation recapture taxes by acquiring one or more like-kind properties.

Action: A lawsuit or proceeding in a court of law.

Adjudication: Giving or pronouncing a judgment or decree. Also the judgment given.

Administrator: A person appointed by the Court to pay the debts of a deceased person and distribute the remaining property according to law. (See also Executor and Personal Representative.)

Advance Directive: See Living Will.

Affidavit: A document in which the signer swears under oath before someone authorized to take oaths (such as a County Clerk or a Notary Public) that the statements in the document are true.

Agent: A person who acts on behalf of someone else.

Answer: The written response to a complaint, petition, or motion.

Assignment: A transfer to another of all or part of one’s property, interests, or rights, such as when you let someone take over the rest of your obligations under a lease or contract.

Attorney-in-Fact: The person named as agent under a power of attorney to handle the financial affairs of another.

Case: A dispute which has been taken to court; a lawsuit.

Case Law: Decisions of federal and state courts about how laws should be applied in specific fact situations. Opinions are reported in various volumes.

Cause of Action: A point of controversy; basis of a legal action.

Civil Action: A legal proceeding in which one person (plaintiff) sues another (defendant) who has caused him injury or loss. The plaintiff seeks compensation from the defendant for his loss.

Codicil: A written modification to a person’s will, which must be dated, signed, and witnessed just as a Will would be. It must make some reference to the will it amends.

Complaint: the first document filed with the court clerk to start a lawsuit by a person or business claiming legal rights against another.

Complainant: The one who files the case with the Court. (See also Plaintiff and Petitioner.)

Conservator: Someone appointed by the Court to take care of an incompetent person and/or their property or affairs. (See also Guardian.)

Contempt: Failure to follow a court order. One side can request that the court determine that the other side is in contempt and punish them.

Continuance: Postponement of a legal proceeding to a later date.

Counsel: Attorney; lawyer.

Debt: A sum of money, services, or goods owed to another.

Debtor: A person or company that owes money to another.

Decision: The result reached by a Court in resolving a dispute before it.

Decree: In general, it is the same as a judgment or order.

Deed: A document that transfers real property or the right to real property.

Default: A party’s failure to answer a complaint, motion, or petition.

Default Judgment: A judgment awarded in favor of the plaintiff when the defendant fails to appear.

Defendant: The person the case is brought against. The person sued in a civil lawsuit or the person charged with a crime in a criminal prosecution.

Devisee: A person who receives a gift of real property by a Will.

Discovery: A way for getting information from the other side or other people. Discovery methods include interrogatories (written questions which one side gives the other side to complete) and depositions (question and answer sessions conducted in person and recorded).

Easement: The right to use the real property (land) of another for a specific purpose.

Estate: All that a person owns in real or personal property.

Estate Planning: A process by which an individual designs a strategy and executes a Will, Trust agreements, or other documents to provide for the administration of his or her assets upon his incapacity or death.

Eviction: When the landlord removes a tenant from rental property. (See also Unlawful Detainer).

Executor: A person named in the Will and approved by the judge to carry out the instructions in a Will.

Fair Market Value: The amount for which an item can be sold on the open market by a willing seller to a willing buyer.

Fiduciary: A person or institution who manages money or property for another. For example, an Executor of an estate, a Trustee, etc.

Fiduciary Duty: An obligation to act in the best interest of another party. For instance, a corporation’s board member has a fiduciary duty to the shareholders and a Trustee has a fiduciary duty to the Trust’s beneficiaries.

Filing: Recording documents with the Court so they are made public record.

Grantor (pertaining to Trusts): A person, including a Testator, who creates, or contributes property to a Trust. If more than one person creates or contributes property to a Trust, each person is a Grantor with respect to the portion of the Trust property attributable to that person’s contribution. (See also Settlor, Trustor, and Trustmaker.)

Guardian: A person who has been appointed y a judge to take care of a child or incompetent adult.

Guardian Ad Litem: A person appointed by the Court only to take legal action on behalf f a minor or an adult not able to handle his/her own affairs. Duties may include filing a lawsuit for an injured child, defending a lawsuit, or filing a claim against an estate.

Hearing: A formal proceeding (generally less formal than a trial) with definite issues of law or fact to be heard. Hearings are used by courts and also by legislative and administrative agencies.

Heir: An individual entitled to a distribution of an asset or property interest under applicable state law.

Holographic will: A handwritten Will.

In Re: In the matter of.

Incapacity: Lacking the ability to understand one’s actions.

Incompetent: A person lacking the legal capabilities to manage his/her own affairs or property.

Inheritance: Whatever one receives upon the death of a relative due to the laws of descent and distribution or by the terms of the will.

Intestate: When a person dies without leaving a valid Will.

Irrevocable Trust: A Trust that cannot be terminated or revoked or otherwise modified or amended by the Grantor. As modern trust law continues to evolve, however, it may be possible to effect changes to irrevocable trusts through court actions or a process called decanting, which allows the assets of an existing irrevocable trust to be transferred to a new trust with different provisions.

Judgment: A court’s decision.

Jurisdiction: The authority of the court to hear a case.

Lessee: The renter of the property. (See also tenant.)

Lessor: The owner of the property. (See also landlord.)

Life Estate: The interest in property owned by a life beneficiary (also called life tenant) with the legal right under state law to use the property for his or her lifetime, after which title fully vests in the remainderman (the person named in the deed, trust agreement, or other legal document as being the ultimate owner when the life estate ends).

Living Will: Also known as a medical directive or advance directive. A written document that states a person’s wishes regarding life-support or other medical treatment in certain circumstances, usually when death is imminent. (See also Advance Directive.)

Marital Property: Includes all property acquires during the marriage, even if not titled in both names, with some exceptions.

Mediation: Process of alternative dispute resolution in which a neutral third party, the mediator, assists two or more parties in order to help them negotiate an agreement.

Motion: A request to the court.

Notary Public: A person authorized by the state to administer oaths or certify documents.

Offer-in-Compromise: An agreement between a taxpayer and the IRS that settles a taxpayer’s tax liabilities for less than the full amount owed.

Order: Ruling or decision by the Judge in a court case.

Paralegal: A person, usually with special training but who has not earned a law degree, who works under the supervision of a lawyer.

Parties: The plaintiff(s) and the defendant(s).

Personal Property: Movable property or possessions, as distinguished from real property (real estate).

Personal Representative: Usually, the Executor or Administrator of a deceased person.

Per Stirpes: A Latin phrase meaning “per branch” and is a method for distributing property according to the family tree whereby descendants take the share their deceased ancestor would have taken if the ancestor were living. Each branch of the named person’s family is to receive an equal share of the estate. If all children are living, each child would receive a share, but if a child is not living, that child’s share would be divided equally among the deceased child’s children.

Pour Over Will: A will used in conjunction with a trust to pass title at death to property not transferred to the trust during lifetime.

Petition: A legal paper that starts a case.

Plaintiff: The person who started the lawsuit by filling a complaint.

Pleadings: Form written statements by the parties to a lawsuit indicating their respective claims and defenses which are filed with the court.

Power of Attorney: A document that gives someone authority to act on your behalf on matters that you specify. The person who acts on behalf of someone else is called the agent (see also attorney-in-fact). The person who has given the authority to the agent is called the principal.

Principal: The person who has given the authority to an agent to act on his behalf.

Probate: Court proceeding by which a will is proved valid or invalid. Term used to mean all proceedings pertaining to the administration of estates such as the process by which assets are gather’ applied to pay debts, taxes, and expenses of administration; and distributed to those designated as beneficiaries in the will.

Process Server: Any person over 18, not directly involved in the case, who will deliver the Summons and a copy of the plaintiff’s Complaint, and later return to the Court an affidavit that he or she has completed service.

Quitclaim Deed: A real property deed that transfers only the interest in the property which the Grantor has.

Real Property: Land, and anything growing on, affixed to, or built upon land.

Retainer: A term sometimes used to describe the fee which the client pays when he or she retains the attorney to act for them.

Revocable Trust: A legal document that places the Grantor’s assets into a trust during his lifetime and then distributes them to his heirs or beneficiaries after his death.

Service: Providing a copy of the papers being filed to the other side.

Served: The defendant has been “served” when he or she personally receives a Summons to appear in court and a copy of the Plaintiff’s Complaint.

Settlement: Resolving the dispute, without a judge’s ruling, a mutually acceptable out-of-court agreement between the defendant and the plaintiff.

Settlor: Term frequently used for one who establishes or settles a trust. (See also “Trustor” or “Grantor.”

Statute of Limitations: Law whereby all claims must be filed within a certain period of time (usually three (3) years from the time the claim arose), but some may be filed later, and some must be filed sooner. Advice as to whether the Statute of Limitations has “run” (requiring the suit to be dismissed) may be obtained from an attorney. A defendant may ask the judge at trial whether the claim is barred by the Statute of Limitations.

Subpoena: A form issued by the court requiring someone to appear in court and/or bring documents.

Subpoena duces Tecum: An order commanding the person on whom it is served to appear at certain proceedings and to bring with them, specified documents or other items which are in his possession.

Summons: A notice requiring a defendant to appear in court.

Tangible Personal Property: Property that is capable of being touched and moved, such as personal effects, furniture, jewelry, and automobiles.

Tenant: A person who occupies real property owned by another based upon a lease or other agreement.

Testator/Testatrix: A person who has written a will.

Undue Influence: The amount of pressure that someone uses to force another to execute a will leaving assets in a particular way, to make a direct gift while alive or to sign a contract.

Venue: The county where the case is heard. The proper or most convenient location for trial of a case.

Ward: A person who has a guardian appointed by the Court to care for and take responsibility for that person.

Tax Dispute: Any dispute, audit, request for information, investigation, examination, claim, appeal, litigation, proceeding, controversy, assessment or collection action, in each case relating to taxes or any tax return.