​Glossary of Terms

​APPRECIATED ASSETS are assets that have a higher market value than their basis or tax purpose value.  Such assets would, if sold by an individual or non-charitable organization at a price higher than their basis, potentially generate a taxable capital gain (either long-term or short-term depending on the holding period).

The ATTORNEY - or lawyer - is the person licensed by the state to practice law and assist the executor, trustee and guardian.  It is conceivable that each could hire a separate attorney, but usually one attorney represents all interests.

The BASIS is the tax purpose value of the property or asset used in establishing the potential capital gain amount.

A BENEFICIARY is the person and/or organization that receives the benefits (usually assets or income) of the trust or will.

A BEQUEST is a gift of property or assets to a beneficiary as defined in a will.

A BYPASS TRUST is set up to avoid or bypass the surviving spouse's estate, which enables each spouse to use the federal estate tax exemption.

A CHARITABLE LEAD TRUST is almost the opposite of a charitable remainder trust.  During the term or life of the charitable lead trust, annuity or unitrust income interest is distributed each year to the designated charitable beneficiary and the assets are eventually transferred to the trustor's or grantor's designated non-charitable or unitrust beneficiary(ies).

A CHARITABLE REMAINDER ANNUITY TRUST is a trust which is set up to pay a return or fixed percentage of the net fair market value of the assets placed in the trust.  The trust assets are valued initially, at the time the property is placed in the trust.  The trust assets are never revalued.

A CHARITABLE REMAINDER POOLED INCOME FUND is an investment fund much like a mutual fund made up of transfers by many persons to the fund who receive life income interest in exchange for their "shares" based on the value of the transfer into the fund and based on the income earned by the fund.

A CHARITABLE REMAINDER UNITRUST is a trust which is set up to pay a return or fixed annual percentage of the net fair market value of the assets placed in the trust.  The trust assets are revalued annually.

A CODICIL is a written change or amendment made to a will.

The EXECUTOR is the person or institution named in a person's will who carries out the terms of the will.  Traditionally, the word has referred to the male and executrix to the female, but this distinction is rapidly disappearing.

The GUARDIAN is the person who is appointed by the Court to care for the person and/or estate of a minor child or incompetent person.  One can nominate a guardian in a will, and though normally the court will honor that nomination, the Court has the right to agree or disagree.

JOINT TENANCY is a type of ownership where any two or more persons, related or not, may hold (own) property and the property passes to the survivor or survivors on the death of one.  This passing is not automatic, and the procedure for passing depends on local law; but this form of ownership does have the advantage of allowing property to pass to the survivor without delays of probate and court administration costs.

A LIVING TRUST  is a trust set up to operate during the life (and can operate after the death) of the one owner of the trust.  It can be revocable, or, in other words, you can change your mind and have some or all of the trust assets returned to you during your life.  An irrevocable trust cannot be changed except in certain legal circumstances, unlawful agreements, merger of interests, or a decision of the Court. (See Living Trust - Advantages/Disadvantages)

PROBATE  is the legal process of proving a will, appointing an executor, and settling an estate; but by custom it has come to be understood as the legal process whereby a dead person's estate is administered and distributed.

A QUALIFIED TERMINABLE INTEREST PROPERTY TRUST (QTIP) is a trust often set up to avoid transfer tax on the first spouse's death.  The deceased spouse establishes the ultimate disposition of the property rather than the surviving spouse including the property in their estate.  During their lifetime, the surviving spouse receives income from the principal and, in some cases, has access to the principal.

TESTAMENTARY TRUST - A will can have a trust written into it, called a Testamentary Trust, which is set into motion by the Court after the will reaches a certain point of execution, and is used only after the death of the spouse whose estate it represents.

A TRUST is defined as any arrangement where property is to be held and administered by a trustee for those for whom the trust was created.  Depending on the type and how it is established, a trust may be reviewable (changeable) or irrevocable (not changeable).

The TRUSTEE is the person or institution named by a person making the trust, or appointed by the court to carry out the terms of the trust.  Assuming a trust has been set up through a will, when the executor's job is finished, the trustee's job begins.

A TRUSTOR is the individual who establishes the trust and may also be referred to as the  GRANTOR and/or SETTLOR.

A WILL is the legal expression or declaration of a person's mind or wishes as to the disposition of the person's property, to be performed or take effect after the person's death.

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