RESOURCES

Glossary

Also known as a “living will” or “medical directive,” in this document a declarant (1) names an agent to make health care decisions on behalf of the declarant if he or she ever loses the capacity to do so and (2) directs under what conditions life-sustaining procedures should be withdrawn.

Property owned by a person at death.

A federal tax paid by a decedent’s estate on the amount by which the estate’s value exceeds the applicable estate tax exemption.  In 2011, the estate tax rate is 35%.  A similar tax can also be imposed on a state level.

An amount which an estate’s value must exceed before an estate tax is due.  For example, in 2011 the federal estate tax exemption is $5,000,000.

Names an agent to manage a person’s finances; usually grants the agent power to do anything the person could do with respect to the person’s finances.  It may take effect immediately or when the person is unable to manage their own finances because of disability or incapacity.  It is also called a “Durable Power of Attorney” because it remains effective if the person granting the power is disabled or incapacitated.

A federal tax which, subject to certain exceptions, is assessed when a person gives property, either in life or at death, to a descendant other than the person’s children, or to anyone more than one generation younger than the person making the gift.  In 2011, the tax equals 35% of the value of the property given and is paid by the gift recipient

An amount which, if allocated to a generation skipping transfer, exempts the gift recipient from paying GST Tax.  The GST Tax exemption amount may be allocated to a single gift or cumulated through successive gifts.

A tax paid by the recipient of a lifetime gift.  Federal gift tax does not apply to gifts less than the annual exclusion amount, which in 2011 is $13,000.

A trust that cannot be amended or revoked by the trustmaker.

A trust that takes effect during the trustmaker’s lifetime.

A plan, usually comprising many estate planning documents and wealth planning tools to ensure a person’s legacy is directed as they intent.

See Advance Health Care Directive above.
See Advance Health Care Directive above.

A will that sends the willmaker’s property to the willmaker’s trust.

The legal process by which a decedent’s property is collected and preserved; the decedent’s debts and taxes are paid; and the remaining property is distributed according to the decedent’s will or, if the decedent had no will, according to state laws of inheritance.

Property owned by a willmaker that is governed by the will; excludes property that passes outside the will, such as jointly owned property, life insurance, and retirement accounts.

A living trust that can be amended or revoked by the trustmaker.

Property of a decedent that is subject to estate tax; includes property either owned or controlled by a decedent at death.

A trust that takes effect on the trustmaker’s death.

An enforceable agreement in which a trustee holds and manages property for the benefit of the trust beneficiaries; governs final distribution of the trust property; names an initial and successor trustees.

Takes effect at death; governs distribution of property in the willmaker’s probate estate; names an executor to be in charge of the estate; can also name guardians for minor children.