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Glossary Of Terms
Administrator
The person appointed by the court to administer an estate when deceased dies without leaving a will.
Appreciated Property
Property, such as real estate or stock, which has increased in value since its purchase.
Beneficiary
An individual designated to receive benefits or funds under a will, life insurance policy, trust, IRA, retirement plan or other contract.
Bequest
To give or leave something to family, charity or others by means of a will.
Charitable Gift Annuity
An agreement in which you transfer cash or other assets to a charitable organization in exchange for its promise to pay you guaranteed income for life or for a term of years.
Charitable Trust
A trust having a charitable organization as a beneficiary.
Codicil
A legal instrument made to modify an earlier will, typically used to make minor changes in or additions to an otherwise acceptable will.
Corporate Fiduciary
An institution that acts for the benefit of another, such as a bank trust department acting as trustee.
Cost Basis
The original value of an asset when purchased.
Durable Power of Attorney
A written legal document that lets an individual designate another person to act on his or her behalf, even in the event the individual becomes disabled or incapacitated.
Estate Tax
A tax imposed at one's death, based upon the value of assets owned. Transfers of those assets to a spouse or eligible charity are deducted from the taxable estate.
Executor (or Personal Representative)
The person named in a will to administer the estate. This person will collect the property, pay any debts and distribute the assets according to the will.
Fiduciary
A person or institution legally responsible for the management, investment and distribution of funds. Examples include trustees, executors, administrators, banks, certain foundations, etc.
Gift Tax
Tax on gifts made to family members or other persons. The person making the gift, rather than the recipient, is generally liable for the taxes.
Gift-Tax Annual Exclusion
The provision in the tax law that exempts from federal gift tax the first $11,000 (as adjusted for inflation) in present-interest gifts a person gives to each recipient during a calendar year.
Grantor
The person who transfers assets into a trust for the benefit of another.
Guardian
An individual legally appointed to manage the rights and/or property of a person incapable of taking care of his or her own affairs.
Inter Vivos Trust
A trust created during one's lifetime to hold property for the benefit of another.
Intestate
The term applied when an individual dies without a will.
Joint Ownership
The undivided ownership of property by two or more people, usually with the right of survivorship.
Life Insurance Trust
A trust that has the proceeds of an individual's life insurance policy as its principal.
Living Trust
A revocable trust established by a grantor during his or her lifetime in which the grantor transfers some or all of his or her property into the trust.
Living Will
A legal document directing that the maker's life is not to be artificially supported in the event of a terminal illness or accident.
Marital Deduction
A deduction allowing for the unlimited transfer of any or all property from one spouse to the other, generally free of estate and gift tax.
Pour-Over Will
A simple document which states that any asset owned personally at the time of a person's death is to be transferred into their living trust for estate administration purposes, provided that the deceased person had such a trust in effect at the time of his/her death.
Power of Attorney
A written legal document that gives an individual the authority to act for another. It expires upon incapacitation of the person who gives another person the authority to act on their behalf.
Probate
The court process for determining the validity of a deceased person's will.
Tenants In Common
The divided ownership of property by two or more people. Common type of ownership when distribution by will is preferable to rights of survivorship.
Testamentary Trust
A trust that is created upon death by the terms of a person's will.
Testator
An individual who dies leaving a will or testament in force.
Trust
A written legal instrument created by a grantor, becoming effective either during his or her lifetime or at death for the benefit of another.
Trustee
The individual or institution entrusted with the duty of managing property placed in a trust. A "co-trustee" serves as trustee with another. A "contingent trustee" becomes trustee upon the occurrence of a specified future event, such as the death of the trustee.
Unified Credit
A federal tax credit that offsets gift tax and estate tax liability. For gift tax purposes, the unified credit remains at $345,800 through 2009, which is equivalent to an applicable exclusion amount of $1 million. For estate tax purposes, the unified credit is being gradually increased from $345,800 in 2003 to $1,455,800 in 2009, which is equivalent to an applicable exclusion amount of $1 million in 2003 to $3.5 million in 2009. This credit may be used for the lifetime gifts to individuals as well as for estate taxes at death.
Will
A legally executed document that directs how and to whom a person's property is to be distributed after death.
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