Weatherby & Associates, PC

Unified credit
A credit allowed against both the federal estate and gift taxes. To the extent the credit is not used against an individual's lifetime gift tax liabilities, it is available to offset estate tax obligations. The credit, in 2002, was $345,800, equivalent to an exemption of $1 million. In 2004, $1.5 million and. It is scheduled to increase for estate tax purposes to an exemption equivalent of $1.5 million in 2004, $2 million in 2006, and $3.5 million in 2009. It is unlimited in 2010, as the federal estate is then repealed for one year, but the exemption is only $1 million in 2011 under the current law.

Uniform Gifts to Minors Act
A uniform law, adopted in every state, under which gifts of cash or "securities," and sometimes other types of property, may be given to a named custodian on behalf of a minor donee.

Uniform Gifts to Minors Act custodian
The person who holds property for a minor under the Uniform Gifts to Minors Act.

Uniform Simultaneous Death Act
A uniform law, adopted in every state, that creates a presumption of an order of death when it is impossible to determine which of two related persons died first.

Uniform Transfers to Minors Act
The 1984 revision of the Uniform Gifts to Minors Act, under which more and different types of property may be the subject of gifts to minors through custodians and more types of transfers (by trusts and estates) are permissible.

U.S. person
An individual who is either a U.S. citizen or who is an alien residing in the U.S. for tax purposes.

Whole life insurance
A type of life insurance whereby part of the premiums is invested and the principal and earnings on these investments are used to defray part of the cost of future premiums. This product will develop cash value which can be accessed by borrowing from the insurance company or by surrendering the policy.

Will
A will is the most valuable instrument in estate planning. Among other things, a will can do the following things:

1. designate who should receive various items of the testator's probate property, and provide a line of beneficiaries in the event that the primary beneficiary predeceases the testator;
2. prescribe whether the property should be transferred outright or in trust, and if in trust, whether income should be paid or accumulated, upon what events or criteria principal can be invaded, and when outright distributions of part or all of the trust corpus should occur;
3. coordinate the amount transferred to a spouse under its terms with property passing to the spouse outside the will to not permit too much property to qualify for the marital deduction resulting in unnecessary estate tax on the surviving spouse's estate;
4. designate the fund from which estate taxes are to be paid;
5. appoint guardians for children, executors and/or trustees; and
6. provide the fiduciaries with adequate powers to carry out the administration of estate assets.