A helpful glossary of terms used when discussing trusts and estate planning.
|Credit shelter trust
|A Trust that uses an individual’s available exclusion for federal estate and gift tax purposes.
|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.
|IRS Estate Tax Return.
|IRS Gift Tax Return.
|IRS Estate and Trust Income Tax Return.
|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).
|Describes one who dies without a will. Typically, state statutes will then dictate the distribution of assets.
|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.
|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.
|Land and/or property that is permanently attached to land (such a building or house).
|A form of joint ownership involving two spouses. Upon death of a spouse, ownership transfers to the surviving spouse. Not available in all states.
|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).
|Describes one who dies with a will established.
|One who creates a will.