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Glossary of Terms


  1. Glossary of Terms (A-B)
  2. Glossary of Terms (C)
  3. Glossary of Terms (D-G)
  4. Glossary of Terms (H-N)
  5. Glossary of Terms (P-R)
  6. Glossary of Terms (S)
  7. Glossary of Terms (T-Z)
 
 Administration The court-supervised distribution of an estate during probate. Also used to describe the same process for a trust after the grantor dies.
 Alternate Beneficiary Person or organization named to receive your assets if the primary beneficiaries named in your Trust die before you do.
 Ancillary  Administration An additional probate in another state. Typically required when you own real estate in another state that is not titled in the name of your trust.
 Assets Basically, anything you own, including your home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, art, clothing, and collectibles.
 Beneficiaries In a living trust, the persons and/or organizations who receive the trust assets (or benefit from the trust assets) after the death of the trust grantor.
 
 Certificate of Trust A shortened version of a trust that verifies the trust’s existence, explains the powers given to the trustee, and identifies the successor trustee(s). Does not reveal any information about the trust assets, beneficiaries, or their inheritances.
 Children’s Trust A trust included in your living trust. If, when you die, a beneficiary is not of legal age, the child’s inheritance will go into this trust. The inheritance will be managed by the trustee you have named until the child reaches the age at which you want him/her to inherit.
 Codicil A written change or amendment to a Will.
 Conservator One who is legally responsible for the care and well-being of another person. If appointed by a court, the conservator is under the court’s supervision. May also be called a guardian. (Duties and titles can vary by state. For example, in Missouri, there is a guardian of the person and a conservator of the estate.)
 Conservatorship A court-controlled program for persons who are unable to manage their own affairs due to mental or physical incapacity. 
 Contest To dispute or challenge the terms of a will or trust.
 Corporate Trustee An institution, generally a bank or trust company, that specializes in managing trusts.
 

  Disclaim

To refuse to accept a gift or inheritance so it can go to the recipient who is next in line.
 Durable Power of  Attorney for Finances A legal document that gives another person full or limited legal authority to sign your name on your behalf in your absence. Valid through incapacity. Ends at death.
 Durable Power of  Attorney for Health  Care A legal document that lets you give someone else the authority to make health care decisions for you in the event you are unable to make them for yourself. Also called a health care proxy or medical power of attorney.
 Federal Estate Tax  Exemption Amount of an individual's estate that is exempt from federal estate taxes. Currently the federal estate exemption is $5 million (adjusted for inflation). Every dollar over the exempt amount is taxed at 40%.
 Fiduciary Person having the legal duty to act primarily for another’s benefit. Implies great confidence and trust, and a high degree of good faith. Usually associated with a trustee.
 Funding The process of transferring assets to your living trust.
 Gain The difference between what you receive for an asset when it is sold and what you paid for it. Used to determine the amount of capital gains tax due.
 Gift A transfer from one individual to another without fair compensation.
 Gift Tax A federal tax on gifts made while you are living. Currently $14,000 per person per year is exempt from gift tax. 
 Grantor The person who sets up or creates the trust. The person whose trust it is. Also called creator, settlor, trustor, donor or trustmaker.
 Gross Estate The value of an estate before debts are paid.
 Guardianship A court-controlled program for persons who are unable to manage their own care/daily needs due to an illness or injury.
   
 Incapacitated/Incompetent Unable to manage one’s own affairs, either temporarily or permanently. Lack of legal power.
 Inheritance The assets received from someone who has died.
 Irrevocable Trust A trust that cannot be changed (revoked) or cancelled once it is set up. Opposite of revocable trust.
 Intestate Without a will.
 Joint Ownership A form of ownership in which two or more persons own the same asset together. Types of joint ownership include joint tenants with right of survivorship, tenants in common, and tenants by the entirety.
 Joint Tenants with  Right of Survivorship A form of joint ownership in which the deceased owner’s share automatically and immediately transfers to the surviving joint tenant(s).
 Living Trust A written legal document that creates an entity to which you transfer ownership of your assets. Contains your instructions for managing your assets during your lifetime and for their distribution upon your incapacity or death. Avoids probate at death and court control of assets at incapacity. Also called a revocable inter vivos trust. A trust created during one’s lifetime.
 Living Will A written document that states you do not wish to be kept alive by artificial means when the illness or injury is terminal.
 Minor One who is under the legal age for an adult, which in Nebraska is age 19.
 
 Per Capita A way of distributing your estate so that your surviving descendents will share equally, regardless of their generation.
 Per Stirpes A way of distributing your estate so that your surviving descendents will receive only what their immediate ancestor would have received if he/she had been living at your death.
 Personal  Representative Another name for an executor or administrator.
 Pour Over Will A short will often used with a living trust. It states that any assets left out of your living trust will become part of (pour over into) your living trust upon your death.
 Power of Attorney A legal document giving someone legal authority to sign your name on your behalf in your absence. Ends at incapacity (unless it is a durable power of attorney) or death.
 Probate The legal process of validating a will, paying debts, and distributing assets after death.
 Revocable Trust A trust in which the person setting it up retains the power to change (revoke) or cancel the trust during his/her lifetime. Opposite of irrevocable trust.
 

 Stepped-up Basis

Assets are given a new basis when transferred by inheritance (through a will or trust) and are re-valued as of the date of the owner’s death. If an asset has appreciated above its basis (what the owner paid for it), the new basis is called a stepped-up basis. A stepped-up basis can save a considerable amount in capital gains tax when an asset is later sold by the new owner. Also see "Basis."
 Successor Trustee Person or institution named in the trust document who will take over should the first trustee die, resign, or otherwise become unable to act.
 
   Testamentary Trust A trust in a will. Only goes into effect at death. 
 Testate One who dies with a valid will.
 Trust An entity that holds assets for the benefit of certain other persons or entities.
 Trustee Person or institution who manages and distributes another’s assets according to the instructions in the trust document.
 Pay on Death Account A bank account that will transfer to the beneficiary who was named when the account was established. The terms "transfer on death" ("TOD"), "in trust for" ("ITF"), "as trustee for" ("ATF"), and "pay on death" ("POD") often appear in the title.
 Uniform Transfer to  Minors Act (UTMA) Law enacted in many states that lets you leave assets to a minor by appointing a custodian. In most states, the minor receives the assets at legal age.
 Will A written document with instructions for disposing of assets after death.