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Trusts & Estates Glossary: L

LAPSE:
The falling of a gift into the residuary estate by reason of the death of the donee during the testator’s lifetime. Such a gift is known as a lapsed legacy or lapsed devise.

LAST WILL:
The will last executed by a person. Since all former wills ordinarily are revoked by the last one in point of time, the term is used to emphasize the fact that it is the latest and, therefore, the effective will of the maker.

LEGACY:
A gift of personal property by Will; the same as a bequest. A person receiving such a gift is called a legatee.

LETTERS TESTAMENTARY:
A certificate of authority to settle a particular estate issued by the appointing court to the executor named in the Will; to be distinguished from letters of administration.

LIEN:
An encumbrance on property—as to secure the payment of money.

LIFE BENEFICIARY:
The beneficiary of a trust usually for the term of his own life, but it may be for the life of some other person.

LIFE ESTATE:
Either an estate for the life of the life tenant alone or an estate for the life or lives of some other person or persons. If the estate is the life of a person other than the life tenant, it is known as an estate pur autre vie.

LIFE EXPECTANCY:
The length of time a person of a given age may be expected to live according to the statistical tables that have been worked out by or for life insurance and other companies.

LIFE INTEREST:
The estate or interest that a person has in property that will endure only during his own or someone else’s lifetime.

LIFE TENANT:
One who owns an estate in real property for his own life or for another person’s life or for an indefinite period limited by a lifetime.

LIMITED GUARDIANSHIP:
Some states have created a limited guardianship which allows a partially disabled or incompetent person to delegate limited powers and authority to the limited guardian.

LIMITED OPEN-END MORTGAGE:
An indenture under which additional bonds may be issued, but which establishes certain limits, or measures, of maximum amounts that may be issued.

LIMITED POWER OF APPOINTMENT:
A power of the donee (the one who has the power) to pass on an interest in property that is limited in some way—as to or for whom or to the time within which he must exercise the power; also known as special power; the opposite of general power of appointment; all powers that are not general are special or limited powers.

LIVING TRUST:
A trust that becomes operative during the lifetime of the settlor; as opposed to a trust under will. The same as a trust inter vivos.

LIVING WILL:
A document which allows a person to state in advance his or her wishes regarding the use or removal of life-sustaining or death-delaying procedures in the event of a terminal illness or injury.