A-B
Trust:
a
living trust designed to use both unified credits of a husband
and wife for federal inheritance tax purposes.
A-B-C
Trust:
a
living trust designed to not only use both unified credits,
but allows the first spouse that dies to exert control over
what the surviving spouse is allowed to do with a portion
of the estate; usually designed for estates that exceed
two unified credits in value and is most commonly used in
a situation involving a second marriage.
Beneficiary:
the
person who receives the property from your trust. During
your lifetime, you are the beneficiary of your trust; after
you die, the beneficiaries are usually your children.
Conservatorship:
a
court proceeding that is required if you become disabled
or incompetent before you die; using Durable Powers of Attorney
and a Living Trust, you can avoid a conservatorship.
Directive
to Physician:
usually
known as a "living will", a Directive to Physician allows
you to be taken off life support if your death is imminent.
Durable
Power of Attorney:
a
durable power of attorney is a document where you appoint
an "attorney-in-fact" to make decisions for you regarding
your health and financial affairs; there are two different
ones: a Durable Power of Attorney for Health Care and a
Uniform Statutory Power of Attorney (for financial matters).
Income
Tax Basis:
the
price you paid for an asset; the income tax basis, also
known as cost basis, is subtracted from the price you sell
an asset for in order to determine your capital gain.
Probate:
a
court proceeding that occurs after you die in order to transfer
the title of your assets to your beneficiaries.
Pour-Over
Will:
a
special type of will that works in conjunction with your
living trust; the Pour-Over will transfer assets left outside
of the trust (usually your cars and checking accounts) into
your trust after you die.
Trust:
a
document that owns your property and transfers it to your
beneficiaries when you die without going through probate.
Trustee:
the
person who manages the assets in a trust; you are usually
the trustee of your trust during your lifetime. After you
die, the person you appointed as the successor trustee manages
the trust assets and distributes the assets to the beneficiaries
of your trust following the directions contained in the
trust. Usually, you will name your children as your successor
trustees.
Trustor:
the
person who creates the trust; this person may revoke or
change the terms of the trust at any time by amending the
trust.
Unified
Credit:
the
dollar value of the assets one is allowed to leave to their
beneficiaries without paying federal inheritance tax.
Will:
a
document that directs who will receive your assets after
you die; in most cases, a will must go through probate. |
