An individual appointed by the court to manage one's estate when he or she
dies without leaving a will. Administrators have the same duties as executors
and are responsible for collecting property, paying debts and taxes and distributing
assets to beneficiaries.
Property, such as real estate or stock, which has increased in value.
A person or organization designated to receive benefits or funds under
a will or other contract, such as an insurance policy, trust or retirement
To give or leave personal property or assets by will to an individual
or charity. A
bequest may be for a specific amount or percentage of the estate.
Breach of Trust Failure of a trustee to fulfill required duties; includes doing
things illegally, negligently or forgetfully.
Capital Gain or Loss The profit or loss from the sale of a capital asset. Long-term
capital assets are assets that have been held for a year and a day. Short-term
assets are assets held less than a year and a day.
Capital Gains Tax A tax that is assessed on the difference between the cost basis
(the original amount of purchase) of an asset and its fair market value. The
current capital gains tax rate is 15% for most types of investment property.
Charitable Gift Annuity
An agreement in which you transfer cash or other assets to a charitable
organization in exchange for its promise to pay you a guaranteed stream
of income for life or for a term of years. The annuity payout rate is fixed and is determined
by the age of the annuitant(s).
Charitable Income Tax Reduction A deduction is provided to a donor who makes a gift to qualifying
cash is donated to a public charity, the donor may claim a deduction for up to
50% of his adjusted gross income. If the gift is property held long term,
the donor may obtain a deduction for up to 30% of his adjusted gross
A trust having a charitable organization as a beneficiary.
A legal document that changes or modifies an earlier will.
An institution that acts for the benefit of another. One example is a
bank acting as trustee.
The original value of an asset, such as stock, before its appreciation
Durable Power of Attorney
A written legal document that allows an individual to designate another
person to act on his or her behalf, even in the event that the individual
becomes disabled or incompetent.
Endowed Fund A fund through which the principal of a gift is managed in perpetuity
and only a portion of the earnings is distributed or spent annually.
A tax imposed at one's death on the transfer of most types of property. Individuals
pay a federal estate tax of 35% to 49% on estates greater than $1.5 million
in 2004 increasing to $3.5 million in 2009. Under current legislation,
the estate tax is due to be repealed in 2010.
Executor (or Personal Representative)
The person named in a will to manage the estate. This person will collect
the property, pay debts and taxes and distribute property or assets according
to the will.
A person or institution legally responsible for the management, investment
and distributions of funds. Examples include trustees, executors and
A tax assessed on transfers made by a donor to an individual during life. The
gift tax is generally paid by the person making the gift, rather than the
recipient. Under current law, an individual can gift $1 million during
his lifetime without being taxed. In addition, each year, a donor can
make gifts of $11,000 to as many recipients as he wishes without paying taxes.
Gift-Tax Annual Exclusion
The provision in the tax law that exempts the first $11,000 in present-interest
gifts a person gives to each recipient during a year from federal gift
The person who transfers assets into a trust for the benefit of another.
The total value of property or assets held by an individual as defined
for federal estate tax purposes.
An individual legally appointed to manage the rights and/or property
of a person incapable of taking care of his or her own affairs.
A type of trust created during one's lifetime to hold property for the
benefit of another person.
Any right or ownership in property.
The term applied when an individual dies without a will. Joint Ownership
The ownership of property by two or more people, usually with the right
Life Insurance Trust
An irrevocable trust which is owner and beneficiary of one or more life
insurance policies. Upon the death of the insured, the trustee invests the insurance
proceeds and administers the trust for the beneficiary(ies).
A revocable trust established by a grantor during his or her lifetime
in which the grantor transfers some or all of his or her property into
A legal document directing the extent to which an individual desires
to receive artificial
life support in the event of a terminal illness or injury. A living will
may also name a third party to make medical decisions on one's behalf.
A deduction allowing for the unlimited transfer of any or all property
from one spouse to the other generally free of estate and gift tax.
Power of Attorney
A written legal document that gives an individual the authority to act
Powers of Appointment
A right given to another in a written instrument, such as a will or trust
that allows the other to decide how to distribute the property. The power of
appointment is "general" if it places no restrictions on whom the distributees
may be. A power is "limited" or "special" if it
limits the eventual distributee.
The court process for determining the validity of a deceased person's
will and distributing the property as specified by the will.
A trust that is created upon death by the terms of a person's will.
An individual who dies leaving a will or testament in force.
A written legal instrument created by a grantor during his or her lifetime
or at death for the benefit of another.
The individual or institution entrusted with the duty of managing property
placed in the trust. A "co-trustee" serves as trustee with another. A "contingent
trustee" becomes trustee upon the occurrence of a specified future event.
A federal tax credit that offsets gift tax and estate tax liability. For
gift tax purposes, the unified credit remains at $345,800 through 2009, which
is equivalent to an applicable exclusion amount of $1 million. For estate
tax purposes, the unified credit is being gradually increased from $555,800
in 2004 to $1,455,800 in 2009, which is equivalent to an applicable exclusion
amount of $1.5 million in 2004 to $3.5 million in 2009.
A legally executed document that directs how and to whom a person's property
is to be distributed after death.
Glossary definitions provided by http://www.cgu.edu/pages/1779.asp