Estate and Tax Planning is an important practice area with a number of terms that are used universally. In order to support a general understanding of the myriad of complex terms, we created this glossary for our clients’ reference. While many are familiar with terms such as trusts and wills, there are a number of others that are discussed throughout the planning process. Read on to learn more:


Durable Power of Attorney for Financial Affairs: A Durable Power of Attorney for Financial Affairs (DPOA) appoints someone you trust to handle financial and legal transactions on your behalf. You can choose to have it take effect immediately or only go into effect upon your subsequent mental incapacity. When used properly, the DPOA can avoid the need to establish a Conservatorship, and hence, is a very important document to have.

Advance Health Care Directive: The Advance Health Care Directive communicates your health care wishes and appoints an agent to carry out such wishes upon your inability to communicate with a treating physician. This document sets forth your decisions about artificial life support, types of treatment you may or may not allow, and other personal health care matters, well in advance of those questions ever arising. Not only does it ensure that your wishes will be heard, but prevents your loved ones from having to guess about what you would have wanted. In doing so, it prevents potential conflict within the family in a time of crisis. Any well-planned estate will include an Advance Health Care Directive.

Wills: Simple Wills can be prepared in the ‘Testator’s’ own handwriting. Or, should the situation merit, an attorney can prepare a more formal Will for a client. However, if a person dies with a Will, and their Probate Assets are valued at more than $166,250, and not otherwise exempt, the Estate will have to go through the process known as ‘Probate.’ Probate is the court-supervised administration of a Decedent’s Estate. While it is a functional process, it is generally much slower and much more costly to administer an Estate through the Probate process as opposed to a Trust Administration.

Guardianships and Conservatorships: Generally speaking, guardianships are for minors whose parents are no longer caring for their children, or when a child stands to receive an inheritance from a probate estate or a pay-out under a life insurance policy. Conservatorships are created for adults who have become incapacitated. Both Guardianships and Conservatorships are established by court order, create a fiduciary relationship between the Guardian or Conservator and the minor or Conservatee, and have strict accounting requirements. Further, both require periodic reporting to the Court system. The reporting and accounting requirements have been subject to recent changes, which have been implemented to establish a better mechanism of protection for the person subject to the Guardianship or Conservatorship. While these processes can be at first daunting, with proper guidance and representation, a Guardianship or Conservatorship can be the best way to assist a family member through a time of need.

Business Entity Formation: Again, this is an area where a business owner can find many self-help legal document services that will claim that you can save money without an attorney. But what will be the cost of making important legal decisions with respect to your business without proper legal advice? A business entity can take many forms, including: Sole Proprietorships, Partnerships, Joint Ventures, Corporations, or Limited Liability Companies. Each form of business entity offers unique advantages, and also involves its own administrative formalities. Selection of the correct business entity when starting a new business is one of the most important decisions for a small business owner. Whether the business is a professional practice, a licensed trade, retail store, or real estate investment, all owners need to be educated as to their options, as well as the benefits and risks that any particular form of business entity can present. Experienced counsel is strongly recommended.

Corporations: There are two reasons that a business owner will incorporate: The first is to save money on income taxes; and the second is to limit the liability of the owners/ shareholders. In evaluating the decision to incorporate, we strongly advise that our clients properly evaluate their income and expenses, and work with a skilled income tax advisor. While a good errors and omissions, liability, and/or malpractice insurance policy is always prudent, the corporate form will provide the extra degree of comfort that many business owners need.

Limited Liability Companies: Similar to a corporation, a Limited Liability Company generally shields the owner/ membership interest holder from liabilities in excess of the LLC assets. However, also similar to a corporation, limited liability is not the only factor one should evaluate in selecting this form of business entity. For example, as single-member LLC’s are generally disregarded as separate entities for tax-paying purposes, many solely-owned businesses would be better organized as a corporation. On the other hand, LLC’s are particularly well suited to hold title to real estate held for investment purposes. As each client’s goals and needs are unique, we can help you with the distinct challenge of selecting and forming the most appropriate entity for your business endeavor.

Real Estate Transactions: Inter-family transactions, Option Agreements, Tenancy-In-Common Agreements, and advising clients on more intricate aspects of real estate sales/ purchase agreements are all areas in which Mr. Longo regularly practices.

Estate Planning: Estate Planning is the practice of analyzing a person’s over-all financial picture, strategizing to minimize estate tax, and other post-death administrative expenses, considering testamentary and other family needs, and implementing the plan of action. The concept of the ‘Family Trust’ or ‘Revocable Living Trust’ is basic to creating an estate plan.

Revocable Living Trust: A Revocable Living Trust is a written legal document that partially substitutes for a will. With a living trust, your assets (your home, bank accounts and stocks, for example) are put into the trust, administered for your benefit during your lifetime, and then transferred to your beneficiaries when you die.

Trust Administration: the administration of a Trust Estate after the settlor (again, that’s the person that created the trust) passes away.

Probate: the court supervised administration of a decedent’s estate. A functional method of handling the distribution of the wealth of a deceased loved one. However it is not the most efficient in terms of time or money.