A helpful glossary of terms used when discussing trusts and estate planning.
| Term | Definitions |
|---|---|
| Creator | See Grantor. |
| Credit shelter trust | A Trust that uses an individual’s available exclusion for federal estate and gift tax purposes. |
| Disclaimers | The refusal or rejection of any rights, interest or property that was offered to a person. Taxpayers have a limited time to disclaim a gift or a bequest/devise without potentially incurring transfer taxes. |
| Durable power of attorney | See Power of Attorney. |
| Form 706 | IRS Estate Tax Return. |
| Form 709 | IRS Gift Tax Return. |
| Form 1041 | IRS Estate and Trust Income Tax Return. |
| Grantor | The person who sets up or creates the trust; also called settlor, trustor or creator. |
| Inter vivos trust | Another name for a living trust (See Living Trust). |
| Intestate | Describes one who dies without a will. Typically, state statutes will then dictate the distribution of assets. |
| Personal representative | Another name for an executor or administrator. |
| Power of attorney | A legal document that gives someone else full legal authority to make decisions on your behalf in your absence (different from the fiduciary duty of a trustee). Ends at disability or death. Some states permit a durable power of attorney that is valid through disability and ends at death. Limited powers of attorney give someone else only limited authority for a very specific purpose. |
| Probate guardianship | The court-supervised appointment of a person to oversee the personal matters (guardian of the person) or the financial matters (guardian of the estate) of a person unable to manage their affairs because of incompetency or age. |
| Qualified terminable interest property (Q-TIP Trust) | A marital trust that qualifies for the estate or gift tax marital deduction. Provides for the trust creator’s spouse during his/her lifetime, and then distributes as directed by the trust creator. |
| Real property | Land and/or property that is permanently attached to land (such a building or house). |
| Settlor | See Grantor. |
| Tenancy-by-the-entirety | A form of joint ownership involving two spouses. Upon death of a spouse, ownership transfers to the surviving spouse. Not available in all states. |
| Tenancy-in-common | A form of joint ownership involving two or more people. Upon the death of a tenant-in-common, that person’s ownership interest transfers to the designated beneficiaries or heirs, not to the remaining joint owner(s). |
| Testate | Describes one who dies with a will established. |
| Testator | One who creates a will. |
