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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)
 
 A Trust The surviving spouse’s portion of an A-B trust. Also called marital trust or survivor’s trust.
 Administration The court-supervised distribution of an estate during probate. Also used to describe the same process for a trust after the grantor dies.
 Administrator Person named by the court to represent a probate estate when there is no will or the will did not name an executor. Female is administratrix. Also called personal representative.
 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.
 Assignment A short document that transfers your interest in assets from your name to another. Often used when transferring assets to a trust.
 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.
 Custodian Person named to manage assets left to a minor under the Uniform Transfer to Minors Act. In most states, the minor receives the assets at legal age.
 
 Deceased One who has died.
 Deed A document that lets you transfer title of your real estate to another person(s). Also see warranty deed and quitclaim deed.
 Disclaim To refuse to accept a gift or inheritance so it can go to the recipient who is next in line.
 Discretion The full or partial power to make a decision or judgment.
 Disinherit To prevent someone from inheriting from you.
 Distribution Payment in cash or asset(s) to one who is entitled to receive it.
 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.
 Estate Assets and debts left by an individual at death.
 Estate Taxes Federal or state taxes on the value of assets left at death. Also called inheritance taxes or death taxes.
 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.
 Heir One who is entitled by law to receive part of your estate.
 Homestead Exemption Portion of your residence (dwelling and surrounding land) that cannot be sold to satisfy a creditor’s claim while you are living.
 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.
 Inter vivos Latin term that means "between the living." An inter vivos trust is created while you are living instead of after you die. A revocable living trust is an inter vivos trust.
 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).
 Liquid Assets Cash and other assets (like stocks) that can easily be converted into cash.
 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.
 Medicaid A federally-funded health care program for the poor and minor children.
 Medicare A federally-funded health care program, primarily for Americans over age 65 who are covered by Social Security or Railroad Retirement benefits.
 Minor One who is under the legal age for an adult, which in Nebraska is age 19.
 Net Estate The value of an estate after all debts have been paid. (Federal estate taxes are based on the net value of an estate.)
 
 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 Property Movable property. Includes furniture, automobiles, equipment, cash and stocks. Opposite of real property that is permanent (like land).
 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.
 Probate Estate The assets that go through probate after you die. Usually these include assets you own in your name and those paid to your estate. Usually does not include assets owned jointly, payable-on-death accounts, insurance and other assets with beneficiary designations. Assets in a trust also do not go through probate.
 Probate Fees Legal, executor, and appraisal fees and court costs when an estate goes through probate. Probate fees are paid from assets in the estate before the assets are fully distributed to the heirs.
 Quitclaim Deed Document that allows you to transfer title to real estate. With a quitclaim deed, the person transferring the title makes no guarantees, but transfers all his/her interest in the property.
 Real Property Land and property that is permanently attached to land (like a building or a house).
 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.
 Required Minimum  Distribution (RMD) The amount you are required to withdraw each year from your tax-deferred plan after you reach your Required Beginning Date. This amount is determined by dividing the year-end value of your tax-deferred account by a life expectancy divisor found on a chart provided by the IRS.
 
 Separate Property Generally, all assets you acquire prior to marriage and assets acquired by gift or inheritance during marriage.
 Settlor See "Grantor."
 Special Needs Trust Allows you to provide for a disabled loved one without interfering with government benefits.
 Spouse Husband or wife.
 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."
 Surviving Spouse The spouse who is living after one spouse has died.
 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.
 
 Tenants-in-Common A form of joint ownership in which two or more persons own the same property. At the death of a tenant-in-common, his/her share transfers to his/her heirs.
 Tenants-by-the  Entirety A form of joint ownership in some states between husband and wife. When one spouse dies, his/her share of the asset automatically transfers to the surviving spouse.
 Testamentary Trust A trust in a will. Can only go into effect at death. Does not avoid probate.
 Testate One who dies with a valid will.
 Title Document proving ownership of an asset.
 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.
 Trustor See "Grantor."
 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.
 Warranty Deed Document that allows you to transfer title to real estate. With a warranty deed, the person guarantees that the title being transferred is clear (free of any encumbrances). If the title is defective, the person making the transfer is liable. Compare to quitclaim deed.
 Will A written document with instructions for disposing of assets after death. A will can only be enforced through the probate court.