The probate and administration of a decedent’s estate performed in a jurisdiction other than the one in which the decedent lived at the time of death. Occurs if decedent owned property in more than one state at death.
A federal gift tax exclusion for a gift of a present interest to each recipient annually without limit as to the number of recipients.
A fixed amount of money which is paid to the person establishing the annuity, called the annuitant, for life or for a fixed period of time.
Generally the cost of property. Basis can be increased by such items as capital improvements or decreased by items such as depreciation. Basis is used to compute taxable gain on the sale or exchange of property.
One who receives property pursuant to a will, a trust, an insurance policy, an individual retirement account, or other third-party beneficiary contract.
The difference between the amount received in a sale or exchange of an asset and its basis.
A trust in which a charity has the right to receive distributions of an income or annuity interest from the time the trust is created until it terminates.
A trust in which the beneficiary has the current right to receive income from the trust with the remainder interest going to a charitable entity.
A trust in which a fixed dollar amount or a percentage of the initial value of the trust assets is paid to charitable entities for a term of years, after which the trust principal is transferred to designated beneficiaries of the grantor. The charitable interest “leads” the beneficiaries’ interests in a CLAT or CLUT.
A trust in which a fixed annual percentage of the value of the trust assets, revalued annually, is paid to charitable entities for a term of years after which the trust principal is transferred to designated beneficiaries of the grantor.
Property ownership in which property acquired during marriage is deemed to be owned equally by both spouses. Community property states are: Wisconsin, New Mexico, Louisiana, Nevada, Arizona, California, Idaho, Washington, and Texas.
A trust in which a fixed dollar amount or a percentage of the initial value of the trust assets is paid to the grantor and/or other designated beneficiaries (usually the grantor’s spouse) for a term of years or for the life of the grantor, after which the trust principal is transferred to designated charitable entities chosen by the grantor. The charitable entities receive the remainder interest in a CRAT or CRUT.
The noncumulative right of a beneficiary to withdraw property transferred to a trust in order to prevent a future-interest gift to a present gift such that the gift will qualify for the $10,000 annual gift tax exclusion.
A trust in which a fixed annual percentage of the value of the trust assets, revalued annually, is paid to the grantor and/or other designated beneficiaries (usually the grantor’s spouse) for a term of years or for the life of the grantor, after which the trust principal is transferred to designated charitable entities chosen by the grantor.
A trust that is drafted in such a way that the trust maker is treated as the owner of the trust for income tax purposes, but not to such an extent that it is included in the estate of the trust maker upon death.
The refusal by a beneficiary or other recipient to accept a gift or bequest.
A power of attorney that enables the power holder to make health care decisions for the principal in the event of the principal’s inability to make health care decisions for himself or herself, usually because of incapacity.
An excise tax levied by the state or the federal government on the privilege of transferring wealth at death. The estate has the obligation to pay estate tax.
A limited partnership established under state law and used by family members to facilitate the transfer of assets to other family members, often at a discount (i.e., the value of the partnership interests are discounted from the value of the assets held by the partnership and represented by those partnership interests).
A trust created at the trust maker’s death to take advantage of the trust maker’s $600,000 exemption equivalent amount. It will often provide for income and discretionary distributions of principal to the surviving spouse but be drafted in such a way that when the surviving spouse dies, none of the trust assets are included in the surviving spouse’s estate. Sometimes called a credit shelter, bypass, or B trust.
A person who creates a trust; also known as a trust maker, settlor, trustor, or donor.
A trust in which the grantor retains the right to receive a fixed amount paid at least annually for a term of years.
A trust in which the grantor retains a right to income for a term of years. Most GRITs are no longer effective except for a “house GRIT,” more commonly called a qualified personal residence trust.
A trust in which the grantor retains, for a term of years, a right to a fixed percentage of the trust, as valued annually.
A flat federal transfer tax assessed on property transferred from one generation to another generation which is more than one generation removed from the donor of the transferred property (e.g., the transfer of property from a grandparent’s trust to a grandchild with a skip over the generation in between).
An exemption amount of $1 million of the benefit if each transferor with respect to federal generation-skipping transfer tax.
A trust which holds life insurance as a principal asset, the death proceeds of which are neither estate-taxed in the estate of the insured nor income-taxed to the beneficiaries of the trust; sometimes also referred to as a wealth replacement trust.
A tax levied by certain state governments on the privilege of receiving or inheriting transferred wealth at death. The recipient has the obligation to pay inheritance tax.
A living trust.
A trust created during the trust maker’s lifetime. A living trust can be either revocable or irrevocable.
Not actually a will, but a set of instructions or expressions of wishes and desires regarding the use or nonuse of medical treatments or procedures that would artificially prolong life.
A hybrid entity possessing the liability limitation characteristics of an ordinary corporation and the tax characteristics of a partnership.
A gift tax deduction or an estate tax deduction which is allowed with respect to transfers made from one spouse to another either during life or after death.
A federal medical assistance program created under Title XIX of the Social Security Act of 1964 and operated in combination with each state. It is not a federal entitlement program, as is Medicare. One must be financially needy to qualify for Medicaid.
A discount allowed in the valuation of a minority interest (less than 50%) in a limited partnership or a corporation which is closely held.
A trust which provides the flexibility of accumulating distributable funds (the “makeup account”) to a later date or dates while continuing to increase trust assets in a tax-deferred environment. Often used as a pension plan alternative.
A power granted to a person allowing him or her to designate who is to receive the property controlled by the power.
A tax-exempt charitable entity established by a member or members of a family for the purpose of carrying out charitable purposes.
A court proceeding to determine competency or custodial rights (living probate), or to determine the validity of a will and the oversight of the procedure by which the assets of a decedent are administered under the provisions of a will.
A trust owning a personal residence of the trust maker in which the remainder interest value of the property, after bing held for the benefit of the trust maker for a period of years, is given to a beneficiary or beneficiaries.
Property in which the surviving spouse has an income interest for life.
A trust that can be changed or revoked by the trust maker.
A trust which contains provisions limiting the liability of a beneficiary to access the trust assets.
A trust that is created through the operation of a will after death.
A person or institution that has the fiduciary responsibility for carrying out the instructions set out in a trust.
A credit (under existing law) which is allowed against the federal gift tax imposed on gifts made during life or against the federal estate tax on estate transfers made after the death of the trust maker.
A legal document containing the instructions for the disposition of one’s assets after death.