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.
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.
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.
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.
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 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).
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 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 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 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.
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.