Glossary
BASIS: A term used by the IRS which normally describes the original purchase price of an asset.
BENEFICIARY: The party for whose benefit the Trustmanager manages and oversees the trust, and the ultimate recipient of the property in the trust at the time of death of the last surviving Creator.
BEQUEST: A disposition of personal property or real property by a will.
CODICIL: A document amending or supplementing a will.
COMMUNITY PROPERTY: Essentially all money and/or other property which is accumulated during a marriage, and which belongs to each party of the marriage equally.
COMMUNITY PROPERTY AGREEMENT: An agreement between two parties which states that their property is community property no matter what form the title is being held in.
CONSERVATOR: A person, official, or an institution designated to take over and protect the interests of an incompetent.
CORPORATE TRUSTMANAGER: A financial institution which oversees and manages a Trust for a fee. Also referred to as a Professional Trustmanager, Professional Trustee, or Corporate Trustee.
CREATOR: A party who creates the trust by transferring his or her property into it. Also commonly referred to as Settlor, Grantor, or Trustor.
DEATH TAXES: The federally imposed taxes that your estate, or your heirs or beneficiaries, must pay upon your death. Also sometimes referred to as Estate Taxes or Inheritance Taxes.
DEVISEE: The beneficiary named in a testamentary gift of real estate.
DURABLE POWER OF ATTORNEY: The legal power given by one party to another to conduct his or her business affairs, and which is not invalidated due to the incapacity of the party granting it. This power may be limited by the party giving it.
ESTATE TAXES: The federally imposed taxes that your estate, or your heirs or beneficiaries, must pay upon your death. Also, often times, referred to as Death Taxes, or Inheritance Taxes.
EXECUTOR: The person nominated by the maker of a will to carry out the directions and requests in his or her will, and to dispose of the property according to his testamentary provisions after he or she dies.
FIDUCIARY: A person charged with the duty of trust or confidence on behalf of a beneficiary. This duty is to act with the utmost care and responsibility towards his or her beneficiary of that duty.
FUNDING: The act of transferring title to property which a party or parties own outside a Trust, into the Trust.
GROSS VALUE: The market value of any item or piece of real estate. This does NOT include any amount due - as in a mortgage or note payable. In other words Gross Value is the market value of an item or piece of real estate and has nothing to do with the Equity you have in such items. When used in the valuation of an estate, it may include any interest in tangible or intangible assets, real or personal property, including every vested right and interest attached to and growing out of assets in which a person has such an interest..
HEALTH CARE POWER OF ATTORNEY: The legal power given by one party to another to make health care decisions for his or her benefit in the event of his or her incapacity.
ISSUE: All the persons who may be a descendant of an ancestor.
JOINT TENANCY: A form of ownership of property, whereby any number of owners each own an undivided interest in the whole property, and all of whom have a right of survivorship. Not limited to real property.
LIVING TRUST: A legal trust which takes effect during the lifetime of the party or parties who create it, which can be used to eliminate probate costs and eliminate and/or reduce Federal Estate Taxes. Also commonly referred to as an Inter-Vivos Trust.
LIVING WILL: A document which one party gives to another which authorizes a physician to "pull the plug" in the event of the party's artificially prolonged life. Many prerequisites must be met before the physician can actually "pull the plug".
MARITAL DEDUCTION: A provision in both the federal gift and estate tax laws that favors transfers of property between spouses by exempting any amount transferred between spouses from tax.
OMBUDSMAN: An advocate of patient rights.
PER STIRPES DISTRIBUTION: A method of passing property from one generation to another, whereby the estate which is to pass will be passed based on a number which is determined by the number of the nearest class of blood relatives who survived the decedent and the number of that class who have died, but have left issue. Don't worry, only your lawyer knows, or needs to.
PERSONAL REPRESENTATIVE: The fiduciary of one's estate. (e.g., an executor or administrator).
POUR-OVER WILL: A testamentary "safety-net" device which provides that anything a Creator of a Revocable Living Trust (CREATOR) may have inadvertently forgotten to fund, or that a CREATOR intentionally did not fund, into his or her Living Trust, will be incorporated into the trust so that it will pass according to the Creators' directions in the Trust. In California, this document will only avoid probate if the assets outside of the trust do not exceed $100,000.00 gross value, and if the real property outside of the trust does not exceed $20,000.00 gross value.
POWER OF APPOINTMENT: The power to designate who shall be the owner of certain property.
1. Public hearings and court proceedings that transfer property owned by a deceased to his beneficiaries, whether the deceased died with or without a will.
2. The public hearings and court proceedings in which a party must petition to the court in an attempt to set up a conservatorship for an incapacitated loved one.
3. The public hearings and court proceedings in which a conservator must report at least every other year with an accounting of how the finances for the incapacitated person have been handled for that period of time.
SPENDTHRIFT PROVISION: A provision in a trust, whereby a Creator provides a fund for the maintenance of a beneficiary which shall be secure against the beneficiary's improvidence (spending habits) or incapacity.
STEPPED-UP BASIS (Prior to 2010): A term describing the fact that, generally, under the federal income tax laws, for purposes of computing capital gain, a person who has received property from a decedent's estate uses as his or her cost, the value of the property at the time of the decedent's death and not the decedent's original cost.
SUCCESSOR TRUSTMANAGER: The party nominated by a Creator, or Successor Trustmanager with higher priority, who oversees and manages the Trust.
TESTATOR: A person who makes a will.
TRUSTMANAGER: The party who manages and oversees the trust. This person, or entity, may not spend any of the trust assets on himself, herself, or itself. Also commonly referred to as a Trustee.
TRUSTOR: Same as Creator, Settlor, Grantor.
TRUST INCOME: The income generated by the assets of the trust.
TRUST PRINCIPAL: The property held by the trust. Also referred to as the trust corpus, or trust estate.
UNIFIED CREDIT TRUST: A trust funded with an amount equal to the unified credit exemption equivalent available in the year of death. If a surviving spouse or other beneficiary is given an income interest in that property for life, that property will not be taxed on the beneficiary's subsequent death when it passes to the ultimate recipient.
