Glossary of Estate Planning Terms

A

Accumulation Trust: A trust that may pay out its income currently or accumulate it for distribution in a future year.

Adjusted basis: In income tax law, the taxpayer's basis in an asset, reduced for depreciation or depletion deductions properly allowable with respect to the asset.

Alternative valuation date: A date other than the date of death as of which the executor of an estate may elect to value all of the estate's assets. The alternative valuation date is the date six months after the date of death, except for assets that have been sold, exchanged, or otherwise disposed of before that date, as to which the alternative valuation date is the date of sale, exchange, or disposition.

Ambulatory: Ability to walk

Ambulatory with assistance: Mobilizing with a cane, walker or wheelchair

Annual exclusion (or Annual per donee gift tax exclusion): A gift tax exclusion of $13,000 per donee for gifts made each year as of 2011.  The amount of the exclusion is adjusted for inflation in $1,000 increments.  The gift must be of a present interest. The exclusion is unlimited for direct payments of a donee's medical or tuition expenses.

Annuity interest: A right to a fixed annual payment for life or a term for years, usually as to a trust fund, such as a charitable remainder annuity trust fund. See also "Privately annuity."

Anti-Byrum Rule: A statutory rule reversing the Supreme Court's decision in Byrum v. United States, under which a decedent's gross estate includes the value of closely held stock given away before death if the decedent retained the right to vote the stock. 
 

Assets: Anything you own. Assets can be tangible such as land (real property) or clothes (personnel property) or intangible such as patent rights.

Attorney-in-fact: The person authorized to represent the principal under a power of attorney.

Attorney, Power of: See "Power of Attorney"

 

B

Bargain sale: A sale, usually among family members or between an individual and a charity, at less than the full fair market value of the property.

Basis: What you paid for an asset.

Basis, adjusted: See "Adjusted Basis"

Beneficiaries: Persons for whose benefit a Trust or Insurance Policy was created.

Beneficiary-owned S corporation trust: A trust that owns stock in one or more S corporations, and that may do so without jeopardizing the corporation's special tax status because the trust is treated as owned entirely by someone other than its grantor.

Beneficiary-owned trust: A trust that is treated as owned by someone other than its grantor, by virtue of §678

Buy-sell agreement: A contract or provision in corporate documents or a partnership agreement under which one or more persons or entities (the partnership or the corporation) agree to buy the interests of the other parties to the agreement, at certain times (usually in lieu of other lifetime sales or transfers and at death), at a stated price and on stated terms.

 

C

Capital gains: Gains recognized from the sale or exchange of capital assets (most property other than inventory and certain specifically excluded types of assets).

Capital gains, long term: Capital gains recognized on the sale or exchange of a capital asset held for more than six months.

Capital gains, short-term: Capital gains recognized on the sale or exchange of a capital asset held for not more than six months.

Charitable lead trust: A charitable trust under which the charity receives an annuity interest (a fixed dollar amount, or a percentage at least 5 percent of the annual or initial value of the trust assets), for a term of years, after which a non-charitable person or group received the remainder interest.

Charitable remainder annuity trust: a charitable remainder trust under which the non-charitable income interest is expressed as a fixed dollar amount or percentage (at least 5 percent) of the initial value of the trust assets, and which does not permit subsequent additions.

Charitable remainder trust: A trust under which an individual or group of individuals receive an income or annuity interest for life or a term of years, and a charity receives the remainder interest thereafter.

Charitable remainder unitrust: A charitable remainder trust under which the non-charitable income interest is expressed as a percentage (at least 5 percent) of the annual value of the trust assets.

Closely held corporation: A corporation the stock of which is owned by relatively few person (often under thirty-five), rather than being subject to public trading.

Commissioner: The Commissioner of Internal Revenue.
 
Community property: A concurrent ownership of property between spouses under the law of some states under which each spouse owns an undivided one-half interest in all property acquired during the marriage (often with specific exceptions).

Complex trust: A trust that is not a simple trust, because it does not have to distribute all of its income currently, or because it makes a charitable distribution, or because it distributes principal.

Concurrent ownership: The ownership of property by more than one person at the same time. Takes the form of community property, tenancy by the entirety, tenancy in common, or join tenancy.

 

Controlled Corporation: A corporation the majority of the stock of which is owned by one or a very few persons.

Credit, unified: See "Unified credit."

Cross-owned life insurance: Policies of life insurance on the lives of a husband and wife, where each spouse owns the policy on the life of the other spouse.

Cross-purchase agreement: A buy-sell agreement under which the other partners or stockholders agree to buy the interest of a deceased or transferring partner or stockholder. Distinguished from a redemption agreement.

Crummey demand power (or trust): A power granted an individual an individual under a trust instrument, whereby the individual can, for a limited period following any gift to the trust (usually thirty through ninety days), withdraw all or some stated portion of the gift. The power issued to make gifts to the trust present interests qualifying for the annual gift tax exclusion.

 

Custodial Care: Long term care of someone who is stabilized medically. Does not require skilled nursing or rehabilitation.

Credit Shelter Trust: Upon the individual's death this Trust is funded with assets from the estate up to the dollar amount of estate assets that are exempt from Federal estate taxes. It is also called the "A" Trust.

D

Defective trust: a trust that is taxed as a grantor trust, usually because of a power inserted specifically to achieve this result, as with some life insurance trusts.

Demand loan: A loan on which the lender can demand repayment at any time.

Depletion deduction: An income tax deduction for the annual diminution of value in a natural resource (such as an oil and gas interest) caused by its exhaustion from productive use.

Direct skip gift: A gift to the donor's grandchild or other person assigned to a similar or more remote generation (see "Skip person"), upon which a generation-skipping transfer tax may be imposed.

Durable Power of Attorney: A Power of Attorney that does not end on the disability of the principal. Authorized in every state but not in the District of Columbia.

 

E

ESOP: A variation of the classic Voting Trust is the Trust created as part of an Employee Stock Ownership Plan, or ESOP. An ESOP is a qualified retirement plan that invests only in the stock of the sponsoring company. Like any retirement plan, there has to be a plan document adopted by the sponsoring company. Like any retirement plan, there has to be a plan document adopted by the sponsoring company, but in addition there has to be a trust that hold the stock of the company purchased or issued in accordance with the plan. Like a classic Voting Trust, the ESOP trust hold the voting rights of the common stock and acts to protect the rights of the beneficiaries of the trust by voting for the directors and officers of the Corporation. Unlike a classic Voting Trust, the ESOP trust cannot receive the stock directly from the existing shareholders, as their shares must be purchased by the Trust either by taking out a loan from a bank or by issuing a promissory note to the current shareholders. The beneficiaries of the trust are employees of the corporation and their respective share is determined by the terms of the ESOP plan document adopted by the sponsoring corporation, and not be the the ESOP trust itself, as the beneficial ownership of the shares in the Trust will change as the employee's vesting in the retirement plan changes.

 

Additionally, the ESOP trust traditionally has an employee of the corporation (such as the CFO) act as the Trustee of the ESOP trust, through an independent Trustee can be used.

Estate: All property that an individual owns at his or her death. It does not include property which passes to another individual or entity automatically upon the individual's death such as jointly owned property or the life insurance policy payment.

Estate Freeze: The use of one or more techniques (such as a recaptiazation of a corporation or partnership, or a buy-sell agreement) to fix the value of a business interest or other property for estate tax purposes, causing all subsequent appreciation to insure to someone other than the interest's owner.

 

Executor (M)/Executrix (F): Individual or institution named in a Will to carry out the terms of the Will.

Executorship: This is the most limited and benign form of legal delegation. The individual or firm has been instructed to complete the settlement of an estate and to comply with a discrete set of directives that the client has authorized counsel to perform in his/her name even if the individual is deceased. Once the specified tasks have been completed, the Executor's work is usually finished. 
 

F

Family attribution rules: several tax rules under which stock or other interests owned by one family member are treated as owned by another family member.

Family corporation: A corporation in which one or more family memebers are stockholders, often receiving their stock by gifts from other stockholder/family members.

Family partnership: A partnership in which one or more partners receive their interests by gifts from other partners.

Fiduciary: Person having a legal duty to act for the benefit or another person. Usually this means persons such as a Trustee or Guardian.

Funded life insurance trust: A life insurance trust that holds significant assets other than life insurance policies.
 

Funding: The process of transferring the ownership of assets to a Trust.
 

 G
General power of appointment:
See "Power of appointment, general."

Generation-skipping offer: A transfer to a grandchild or other individual who is at least two generations below that of the donor, or to a trust for the benefit of such individuals, upon which a generation-skipping transfer may be imposed.

Generation Skipping Tax (GST): If an individual (Parent) has a living child (Child) at the time when the individual makes a gift, or at probate of the individual's will assets are bequeathed to, the living issue of such child (i.e. to the Parent's Grandchild or Great-grandchild, etc.) the asset transferred is subject to a special tax at a 35% rate called the generation skipping tax.  An individual can transfer up to a $5,000,000 during his or her lifetime without having to pay any GST based on the law in effect as of January 1, 2011.

Generation-skipping transfer tax: A tax imposed on a generation-skipping transfer.

Gift/leaseback: A gift of property followed by the donor's leasing property back.

Gift-splitting: A donor's making of a gift as to which the donor's spouse elected on a timely gift tax return to be treated as the donor of one half of the gift, thus enabling the use of the donor's spouse's unified credit and annual gift tax exclusion.

Gift Tax: A Federal tax on gifts made while you are alive. Currently $13,000 per recipient per year is exempt from the gift tax.  A person in his lifetime can give gifts aggregating up to $5,000,000 which gifts are exempt from the Federal gift tax based on the law in effect as of January 1, 2011.

Grantor or Settlor: The person who establishes a Trust.

Grantor-retained annuity trust: A trust under which the grantor retrains an annuity interest for a term of years, followed by a transfer of the trust funds to the named individual or individuals.

Grantor-retained income trust: A trust under which the grantor retains an income interest for a term of years, followed by a transfer of the trust funds to the named individual or individuals.

Grantor-retained unitrust: A trust under which the grantor retains an annuity interest for a term or years, measured by a percentage of the annual value of the trust assets, and followed by a transfer of the trust funds to the named individual or individuals.

Grantor S corporation trust: A trust that owns stock in one or more S corporations, and that may do so without jeopardizing the S corporation's tax status because the trust is wholely treated as owned (under $671 through 677) by a grantor who is a U.S. citizen or resident alien.

Grantor trust: A trust that is treated as owned, in whole or in part, by its grantor under ;$;$671 through 677, 679.

Group-term life insurance: A term life insurance policy covering a group of persons, usually employed by the same employer.

Guardian: A person or entity appointed by a Court to act on behalf of an incapacitated person.

Guardian Ad Litem: A guardian appointed by a Court in connection with specific matter.

Guardianship: This is a more extensive and more generalized form of legal delegation because it usually involves the care and maintenance of a living person and covers an unknown set of future circumstances over an unknowable period of time. As a result, the attorney is given much more flexible powers than those involved with an executorship. These powers are focused upon more upon securing certain outcomes intended by the client for the best interests of the person, rather providing a precise and detailed list of instructions. Because the future is uncertain, no one can know exactly what powers will be required. The client and the attorney just operate almost as partners in a joint venture to ensure that a thoughtful plan is in place so that there is a reasonable likelihood of achieving the desired outcome.

 

H

Health Care Proxy: A document that gives the specified individual the right to make decisions about your medical care when you are incapacitated. 

Holding period: The length of time a taxpayer is deemed to have held an asset. This is important in distinguishing between long-term and short-term capital gains.

Hybrid buy-sell agreement: A buy-sell agreement under which both the entitiy (partnership or corporation) and the other owners (partners or stockholders) have rights and obligations to buy the interest of a transferring or deceased partner or stockholder.

 

I

ILIT: An irrevocable life insurance Trust. If the owner of the policy survived for three years after donating the policy to the ILIT the proceeds of the policy are no included in the former owner's estate upon his death so no estate taxes are due when the policy is paid.

Incidents of ownership: Economic benefits from the ownership of a life insurance policy. If a deceased holds at death one or more incidents of ownership on a policy of insurance on his or her own life, the proceeds are part of his or her gross estate for estate tax purposes.

Intervivos trust: A Trust that you create while you are alive. Contains your instructions for managing the assets with which the Trust is funded during your lifetime and for their distribution upon incapacity or death. It avoids probate at death but not Federal and State Estate taxes.

Intestate: A person who dies with out a Will.

Irrevocable trust: A Trust that cannot be changed or cancelled once it is set up.

Installment gift: A gift made by selling property on the installment basis (receiving a note calling for a series of installment payments) and forgiving the payments annually.

Installment sale: A sale in which the seller receives a note calling for a series of installment payments, rather than a sale wholely for cash. 

 

J
Joint ownership:
Two people own the same property. When one of them dies the survivor becomes the sole owner.

Joint tenancy: A type of concurrent ownership under which each owner owns an undivided interest in the whole property, and when one owner dies, the surviving joint owners succeed to his or her interest.

 

K

 

L
Letter of Intent:
Letter prepared by Parent of disabled child. It should specify the child's like and dislikes, the parent's goals and desires for the child, give the names of those persons who interact with the child, name potential guardians, and give any other information the Parent feels pertinent. The Letter should be made available to appropriate people and relatives.

Leveraged purchase: A purchase of an asset paid for largely with the buyer's debt, rather than for cash.

Limited power of appointment: See "Power of appointment, limited."

Living Will: A legal document whereby you indicate your wishes concerning life support should you become terminally ill and be incapacitated.

Long-term capital gains: See "Capital gains, long-term."

M

Marital Deduction: There is no Federal Estate Tax or Gift Tax due upon any transfer of assets between spouses.

Marital Deduction Trust (MDT): Upon the death of a spouse, after funding the Credit Shelter Trust, the remaining estate assets are usually used to fund the Marital Deduction Trust established for the benefit of the surviving spouse. When the surviving spouse has no General Power of Appointment the Trust is called a QTIP Trust (Qualified Terminal Interest Trust). 
 

N
Net gift: A gift as to which the donee agrees to pay the donor's gift tax liability.

Nonrecourse debt: A debt on which the specified security alone may be foreclosed upon to satisfy the debt.
 

O
Ombudsman for the Elderly:
The federal Older Americans Act requires every state to operate a long-care ombudsman program. The ombudsman is responsible for advocating on behalf of residents of nursing homes, assisted living facilities and other long-term care facilities. The ombudsman provides information about options and rights and can resolve complaints.

Original issue discount: Under the income tax law, a system under which interest is imputed on a debt instrument that files to state a total interest equal to the applicable federal interest rate for loans of that term.

Outright gifts: Gifts to an individual not made through a trust.

 

P

Part-sale/part-gift: A transfer of property for less than its fair market value, creating a transaction that is in part a sale (receipt by the transferor of some consideration or the property) and in part a gift (a receipt by the transferee of some of the property for no adequate consideration.)

Per se rule on incidents of ownership:
A position of the IRS, now apparently relaxed, that incidents of ownership on a life insurance policy held by the insured in a fiduciary capacity would cause the insured's estate to include the proceeds, notwithstanding, that the insured could receive no personal benefit from the trust or estate.

Personal holding company: A closely held corporation that primarily serves to own the stock of other corporations/

Personal holding company tax: A surtax imposed on closely held corporations that receive most of their income from passive sources, such as rents, royalties, interest, and dividends.

Personal Property: Moveable property including cash and stocks.

Per Stirpes: A way of distributing your estate so that surviving descendents will receive equal shares of only what their immediate ancestor would have received if he/she had been living at your death.

Pick-up tax: A state death tax measured by the allowable federal estate tax credit for state death taxed.
Pooled income fund: A charitable trust created and maintained by a charitable institution to which individual donors may make gifts and as to which the donor or some designated person retains for life (or a long term of years) the right to a proportionate share of the trust's income, the remainder being vested in the charity.

Pour over will: A short Will used with a Revocable Living Trust (RLT). It states that any assets left out of the RLT will become part of the RLT upon your death and will be distributed according to the terms of the RLT.

Pooled Trust: A trust managed by a not-for-profit association where by assets are pooled for investment purposes but separate accounts are maintained for each individual investor.

Ombra Pooled Trust: a supplemental Needs Trust that can be established with a not-for-profit organization for the benefit of a disabled person of any age. The disabled person himself can also establish it. If the disabled person is over 65 Medicaid transfer penalty provisions will apply. Upon the death of the disabled person all of the remaining assets usually remain with the not-for-profit organization. There are no Medicaid payback requirements.

Power of appointment: A charitable trust created and maintained by a charitable institution to which individual donors may make gifts and as to which the donor or some designated person retains for life (or a term of years) the right to a proportionate share of the trust's income, the remainder being vested in the charity.

Power of appointment, general: Under tax law, any power of appointment that can be exercised in favor of the holder, the holder's estate, the holder's creditors, or the creditors of the holder's estate.

Power of appointment, limited: Under tax law, any power of appointment that is not a general power of appointment. Also known as a "special" power of appointment.

Power of attorney (POA): A legal document giving the individual named therein the legal authority to act in your place in accordance with the particular powers specified therein. A general POA allow the individual to act in your place in all matters. A Durable POA allows the person to act even if you become incapacitated. A Springing POA only becomes effective when you become incapacitated. All POA's granted terminate upon the grantor's death.

Private annuity: The sale, usually by one family member to another, of property or the payment of money in exchanged for an agreement to make a stated periodic payment, e.g., weekly, monthly, annually, for the rest of the seller's life.

Probate: The legal process through a Court where by the Will is validated, debts paid and remaining assets are distributed according to the instructions specified in the Will.

Put: The contractual right to insist that someone else purchase stock or other assets at a specified price.
 

Q
Qualified conservation contribution:
A gift, deductive for income tax purposes, of a remainder interest or perpetual restriction for any of the following charitable purposes:

  1. preserving land areas for outdoor recreation by the general public;
  2. preserving land areas for education of the general public;
  3. protecting in a relatively natural habitat fish, wildlife, plants, or similar ecosystems;
  4. preserving an historical important land area  or certified historic structure.

Qualified interest: An annuity interest the retention of which by a donor will be related as a valuable interest for purposes of measuring the value of the interest transferred in the same assets, under the special valuation rules.

Qualified payment: A right to a fixed and cumulative distribution with respect to preferred stock or a partnership interest, the value of which is taken into account in determining the value of a transferred interest in the same enterprise, under the special valuation rules.

Qualified subchapter S trust (QSST): A trust that, because it meets certain requirements, may be a shareholder of an S corporation. The trust must do the following:

  1. own stock for one or more S corporations
  2. distribute all of its income currently to one U.S. resident or citizen, and;
  3. be required to make any principal distributions it makes during the income beneficiary's life to the income beneficiary.

The income beneficiary's interest must terminate at death or when the trust terminates, the trust assets must be distributed to the income beneficiary if the trust terminates while the beneficiary is alive, and the beneficiary, or his or her legal representative, must elect to be treated as the trust's owner. 

 

 R

Real Property: Real Estate, land and buildings attached thereto.

Recapitalization: A change in the stock, partnership, or debt interests of a corporation or partnership, sometimes accomplished to freeze the value of one party's interest artificially.

Recourse debt: A debt on which the debtor is personally liable, so that if the creditor forecloses on the specified security (if any), and the proceeds of its sale are inadequate to satisfy the debt, the creditor may take and sell the debtors other assets.

Redemption agreement: A buy-sell agreement under which the corporation or partnership agrees to buy out the interest of a shareholder of partner. Distinguished from a cross-purchase agreement or a hybrid agreement.

Remainder interest: The right given to a beneficiary of a trust (or the beneficiary of certain non-trust arrangements, such as life estates or terms for years) to receive the trust fund upon some event, such as the death of another beneficiary.

Remainderman: The person who received the Trust assets upon the termination of the Trust. During the existence of the Trust the assets were available for use by other persons in accordance with the Grantors instructions.

 

Residents Rights: Federally mandated rights for every resident in a long-term care setting.

Respite: Implies a temporary break in providing care.

Reversionary interest (or reversion): A right retained by a trust's grantor (or by the creator of certain non-trust arrangements, such as life estates or terms for years) to receive the trust fund upon some event, such as the death of a beneficiary.

Revocable Trust: A Trust in which the person establishing the Trust retains the right to change the terms of the trust during his/her lifetime.

Right of survivorship: A right as to property owned as joint tenants or as tenants by the entirety, whereby one joint owner succeeds to the interest of a deceased joint owner. 
 

S

S Corporation: A closely held corporation whose stockholders have elected to have corporate net earnings taxed directly to themselves, rather than taxed once at the corporate level and again when paid out as dividends.

Section 306 Stock: Certain preferred stock that, because of the circumstances of its issuance and acquisition, will generate ordinary income, rather than capital gains, on its disposition.

Section 2503 (b) trust: A minors' trust that qualifies for the gift tax annual exclusion because it gives the income beneficiary a right to all of the trust's income for life or for a term of years. Only the income interest qualifies for the annual exclusion as a present interest.

Self-Settled Trust: A Living Trust in which the Grantor makes himself the beneficiary.

Self-destructing trust clause: A provision in a life insurance trust under which, if any of the proceeds are included in the insured's gross estate (as when the insured dies within three years of having given the policy to the trustee), the proceeds are paid back to the insured's estate or to the insured's surviving spouse.

Self-settled trust: A trust, which is established with the funds of the beneficiary -  typically, a tort victim or a  person receiving an inheritance.

Settlement options: The various options, given by a life insurance company to the beneficiary of the policy proceeds, as to the form in which the proceeds will be paid.

Short-term capital gains: See "Capital gains, short-term."

Simple trust: A trust that is required to distribute all of its income currently, that does not pay principal and that makes no charitable distributions.

Skip person: An individual assigned to a generation at least two generations below that of a grantor, or a trust solely for such individuals. A gift to a skip person is subject to the generation-skipping transfer tax as a "direct skip" gift.

Soak-up tax: Also known as a "sponge" tax; this is a state death tax measured by the allowable federal estate tax credit for state death taxes. Massachusetts and several other states have "decoupled" their estate tax from the federal estate tax since the phase out of the state death tax credit, setting the state estate tax at the same rate the sponge tax would have been prior to the repeal of the federal estate tax in 2001.

Special allocation: A provision in a partnership agreement by which tax or other benefits are allocated among the partners otherwise than in accordance with their percentages of partnership interest generally.

Special Needs Trust: A Trust established for the benefit of a disabled person who is receiving governmental benefits and which complies with specified requirements so that distributions from the Trust would not result in the loss of such governmental benefits. The Trustee can distribute assets of the Trust to the disabled person only for his supplemental needs and not for any needs covered by the governmental benefits.

Spendthrift Clause: A provision in a Trust that prevents the beneficiary thereof from using the Trust assets as security or collateral for his or her debts.

Split-purchase: An arrangement under which two persons buy property together, one buying a life interest and the other buying the remainder interest.

Sprinkling trust: A trust in which the trustee may pay income (and sometimes principal) to any of a number of beneficiaries, usually in any proportions the trustee deems appropriate.

Standby trust: A revocable trust that is used to manage the assets of the grantor after his or her disability.

Stepped-Up-Basis: Assets which are transformed by inheritance after the death of their owner, whether through a Will or through a Trust are revalued to their current fair market value as the owner's day of death. If an asset has increased in value over what the owner paid for it (or the basis at which he received it) the new basis is called a step-up basis. Capital gains tax is paid upon the difference between the price the asset is sold and the basis at which it was acquired.

Supplemental Needs Trusts: A special Needs Trust established by the disabled person's parent, grandparents, legal guardian or a Court. The Trust does not result in any Medicaid disqualification period for the beneficiary or for the Grantor. The beneficiary must be under 65 when the Trust is established. Upon the beneficiary's death any remaining assets must be used to payback Medicaid for the benefits paid out to the deceased beneficiary. These types of Trusts are usually funded with money awarded to the disabled person as a result of medical malpractice or from a personal injury award. The term "Special Needs Trust" and "Supplemental Needs Trust" are frequently used as if they were interchangeable.

Sweetheart contract: A contract made on especially favorable terms.

 

T
Taxable distribution:
Distribution of income or principal from a trust to a beneficiary assigned to a generation of at least two below the grantor, if there remains at least one trust beneficiary assigned to a generation not more than one below that of the grantor.

Taxable termination: Termination of an interest of a trust beneficiary who is assigned to a generation not more than one generation below that of the grantor, if that termination causes the trust to vest in one or more beneficiaries who are assigned to generations at least two below that of the grantor.

Tenancy by the entirety: A type of concurrent ownership between spouses in which each spouse owns an undivided interest in the whole, with a right of survivorship, and which can be terminated only by the consent of both spouses or the termination of the marital relationship.

Tenancy in common: A type of concurrent ownership of property whereby each party owns an undivided fractional interest in the property, with no right of survivorship. The fractional interests need not be equal.

Term life insurance: A type of life insurance that provides a death benefit and generally has no cash values.

Three-part gift/leaseback: A gift/leaseback in which the donor leases the property directly from the donee.

Transient Ischaemic Attach (TIA): TIA's are commonly known as "small strokes" or "baby strokes". It is a temporary interruption of the blood supply in the brain. The symptoms might be speech slurring and weakness on one side of the body. The symptoms commonly clear within 24 hours.

Trust: A legal relationship created by one person, called the Grantor in which another person, called the Trustee, manages property donated to the Trust by the Grantor for the benefit of a third person, called the Beneficiary.

Trusteeship: This is the greatest level of legal delegation of control. Here, the Trustee is provided with the actual legal title of property - for the benefit of another - with the most extensive powers and the most discretion with respect to exercising those powers. Trustees are held to the highest duty of care and loyalty and are required to exercise their powers only in the best interests of the beneficiaries.

Their role is defined and guided by the Trust documents and, if the Trust is silent on an issue, but the extensive Common Law traditions and statutory authority generally will provide direction where the Trust document does not. Trusts attempt to anticipate the future, sometimes for several generations, and must be flexible and not rigid to avoid falling apart - and failing to achieve their original intent - when facing the challenges of the future. Consequently, the need for sound thinking, practical experience, reasoned drafting and the right kind of firm is paramount.

Testamentary Trust: A Trust established under a Will which will take effect upon the death of the Testator (the individual whose Will is it).

Testator (M)/Tessatrix (F): The individual who makes the Will.

Third Party Trust: A Special Needs Trust which is established by a person who is not the disabled person or the spouse thereof, the parent or grandparent thereof, or the legal guardian thereof, and who has no legal obligation to support the disabled person.

Trustee: The person or entity who manages the Trust for the benefit of the beneficiary.

Tenants-In-Common: Two persons own the same property. When one of them dies his heirs inherit his share of the property. 

U

Uniformed 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.

Uniformed 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 presumption of an order of death when it is impossible to determine which of the two related persons died first.

Uniformed Transfers to Minors Act: The 1984 revision to 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) and permissible.

Urinary Tract Infections (UTI): An infection in the urinary tract.

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.

 

V

 

W
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 furniture premiums. This is 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 best known instrument in estate planning. Among other things, a will can do the following things:

  • 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;
  • 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 of all of the trust corpus should occur;
  • 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 estate tax exemption;
  • designate how estate taxes are to be paid;
  • name guardians for children,
  • name executors and/or trustees; and
  • provide the fiduciaries with adequate powers to carry out the administration of estate assets.

 

X

 

Y

 

Z

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Hank and his staff are friendly, helpful, and knowledgeable. They have taken time to research problems in depth before giving advice. I regard my relationship as more than merely a client/lawyer relationship. Read More
– S.H.P.

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