Money Talks Estate Planning

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Deceased

One who has died

Estate

Assets and debts left by an individual 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

Health Care Proxy

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.

Medical Power of Attorney.

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.

Living Will

a written statement detailing a person's desires regarding their medical treatment in circumstances in which they are no longer able to express informed consent, especially an advance directive.

Advance Directive

a written statement detailing a person's desires regarding their medical treatment in circumstances in which they are no longer able to express informed consent.

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.

Health Care Proxy

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.

Medical Power of Attorney

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.

Estate Taxes

Federal or state taxes on the value of assets left at death. Also called inheritance taxes or death taxes.

Inheritance Taxes

Federal or state taxes on the value of assets left at death. Also called inheritance taxes or death taxes.

Death Taxes

Death taxes are taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the beneficiary who receives the property in the deceased's will or the estate which pays the tax before transferring the inherited property.

Heir

One who is entitled by law to receive part of your estate

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.(the authority to act for another person in specified or all legal or financial matters)

Durable Power of Attorney

A durable power of attorney is a designation that is given to someone else to be able to handle financial transactions on their behalf. The term “durable” means that if the principal would become incapacitated or no longer be able to think for themselves that the form would remain valid and in effect...

Testate

One who dies with a valid will

Intestate

One who dies without a valid will.

Inheritance

An Inheritance is all or part of a person's estate and/or assets that is given to an heir once the person is deceased. An inheritance is typically a cash endowment given to younger heirs; however, any assets can be considered as part of an inheritance, such as stock certificates or real estate. If a will is not in place at the time of death, determining the rightful heirs of the deceased's estate becomes a more complicated matter.

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 (JTWROS)

A form of ownership in which two or more persons own the same asset together.

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.

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.

Settle an Estate

The process of handling the final affairs (valuation of assets, payment of debts and taxes, distribution of assets to Beneficiaries) after someone dies.

Executor

Person or institution named in a will to carry out its instructions. Female is executrix. Also called a personal representative.

Basis

What you paid for an asset. The value that is used to determine gain or loss for income tax purposes.

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. A step-up in basis is the readjustment of the value of an appreciated asset for tax purposes upon inheritance. The higher market value of the asset at the time of inheritance is considered for tax purpose

Will

A written document with instructions for disposing of assets after death. A will can only be enforced through the probate court.

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.

Trust

An entity that holds assets for the benefit of certain other persons or entities.

Recorded Deed

A deed that has been filed with the county land records. This creates a public record of all changes in ownership of property in the state.

Legacy Planning

Legacy planning is a financial strategy that prepares a person to bequeath his or her assets to a loved one or next of kin after death. These affairs are usually planned and organized by a financial advisor.

Bequeath

To leave property at one’s death; another word for “give.”

Bequest

A gift of an item of personal property (that’s anything but real estate) made at death.

Bond

A kind of insurance policy that protects inheritors against loss that the personal representative of an estate (the administrator or executor) might cause.

Uniform Transfers to Minors Act (UTMA)

The Uniform Transfers to Minors Act (UTMA) allows a minor to receive gifts—such as money, patents, royalties, real estate, and fine art—without the aid of a guardian or trustee. Under the UTMA, the gift giver or an appointed custodian manages the minor's account until the latter is of age. The Act also shields the minor from tax consequences on the gifts, up to a specified value.

Custodian

The person named to manage property inherited by a minor, under a law called the Uniform Transfers to Minors Act, which has been adopted in almost every state.

Grantor

Someone who creates a trust; a settlor

Failed or lapsed gift

A gift made in a will that cannot be given to the intended recipient because that person has not survived the will-maker and the will does not state what should happen to the gift.

Issue

Direct descendants, including children, grandchildren, and so on. A spouse, brothers, sisters, parents, and other relatives are not issue.

Legacy

A gift of personal property left at death

Legatee

Someone who inherits personal property

Personal property

All kinds of assets except real property.

Personal Representative

Another name for the executor or administrator of an estate. Some states use this term (often abbreviated “PR”) instead of executor; some states use either.

Per capita

A way of dividing property among the descendants of a deceased heir beneficiary.

Per stirpes

A way of dividing property among the descendants of a deceased heir or beneficiary. The general idea is that the children of a deceased beneficiary inherit that person’s share—for example, if a father leaves property to his daughter, and at his death the daughter has already died, leaving two grandchildren, the grandchildren would take their mother’s share.

Settlor

Someone who creates a trust.

Testamentary

Having to do with a will. For example, a trust that is set up in a will is called a testamentary trust.

Trustee

Someone who has legal authority over the assets in a trust.

Beneficiary

Someone named in a legal document to inherit money or other property. Wills, trusts, and insurance policies commonly name beneficiaries; beneficiaries can also be named for “payable-on-death” accounts.

Estate Planning

The act of preparing for the transfer of a person's wealth and assets after his or her death. Assets, life insurance, pensions, real estate, cars, personal belongings, and debts are all part of one's estate. A basic goal of estate tax planning is to
transfer as much of your property with
as little taxation as possible.

Goals of Estate Planning

•Create a definite plan for managing your financial resources and other assets while you are alive and distributing those resources after your death, •Organize your financial affairs so they are understood by your children and/or other designated heirs, and leave a lasting legacy for your family members and future generations

Last Will and Testament

a legal document by which a person, the testator, expresses their wishes as to how their property is to be distributed at death, and names one or more persons, the executor, to manage the estate until its final distribution.

Pour Over Will

This kind of will is often used with a living trust. Under the terms of a pour-over will, all property that passes through the will at your death is transferred to (poured into) your trust.

TOD ( Transfer on Death)

Transfer on death (TOD) registration allows you to pass the securities you own directly to another person or entity (your "TOD beneficiary") upon your death without having to go through probate.

Financial Power of Attorney

A financial power of attorney grants a trusted agent (also called an attorney-in-fact) the authority to act on behalf of the principal (the person granting authority) in financial matters.

Community Property Agreements

A community property agreement is an agreement between spouses or state registered domestic partners to characterize their property as community property. ... The characterization of the property affects the legal rights and interests that each spouse or partner has in the property ...

Outright

income earned by the trust is distributed outright to a beneficiary, the income tax rates are generally not as compressed as the fiduciary income tax rate schedule, saving on income taxes. By transferring assets outright to beneficiaries, the assets become theirs right away.

In Trust

means that the account is kept in the original owner's name and when he/she dies, it then goes to the person to whom it was held "in trust for." Its also called a "totten trust

Spend Thrift Trust

a trust that is created for the benefit of a person (often unable to control his spending) that gives an independent trustee full authority to make decisions as to how the trust funds may be spent for the benefit of the beneficiary

Creditor Protection Trust

is any form of trust which provides for funds to be held on a discretionary basis. Such trusts are set up in an attempt to avoid or mitigate the effects of taxation, divorce and bankruptcy on the beneficiary.

Perpetual Trust

refers to a trust that can continue as long as the need for it continues. It can be for the lifetime of a beneficiary or the term of a particular charity.

Elder Law

a specialized area of legal practice, covering estate planning, wills, trusts, arrangements for care, social security and retirement benefits, protection against elder abuse (physical, emotional and financial), and other involving involving older people.

Capacity

can be defined as the ability of health care subjects to make their own health care decisions. Questions of 'capacity' sometimes extend to other contexts, such as capacity to stand trial in a court of law, and the ability to make decisions that relate to personal care and finances.

HIPPA Release

In this HIPAA release document, an individual names a personal agent who is to be treated as if they were the individual themself, with respect to the rights regarding the use and disclosure of what is defined as identifiable health information or other medical records.

Burial Designation

this is about what you ultimately want to be done with your physical body following death and can include burial (sometimes referred to internment), cremation, removal from the state (if you want to be buried in a different state), and other types of disposition. You may also detail if you wish, a funeral or other type of ceremony (maybe even a party) to be held. If you’ve purchased a burial plot or want to be laid to rest in the family mausoleum, you would include those details here.

Generation Skipping Transfer

taxes serve the purpose of ensuring that taxes are paid when assets are placed in a trust, and the beneficiary receives amounts in excess of the generation-skipping estate tax credit

Decendent

a legal term the tax, estate planning and law arenas primarily use for a deceased person. When a decedent is a legitimate taxpayer, all of his possessions become part of his estate, and he becomes denoted as a decedent, or deceased

Gift Tax

prevent individuals with large estates from giving away all of their assets to their heirs during their lifetimes to avoid estate taxes. According to the IRS, the gift tax applies whether the donor meant the transfer as a gift or not.

Estate Tax

a tax levied on an heir's inherited portion of an estate if the value of the estate exceeds an exclusion limit set by law. The estate tax is mostly imposed on assets left to heirs, but it does not apply to the transfer of assets to a surviving spouse.

Irrevocable Trusts

a type of trust where its terms cannot be modified, amended or terminated without the permission of the grantor's named beneficiary or beneficiaries.

Guardianship

essentially a legal relationship established by the court in order to allow someone other than the parents to be responsible for the care and protection of a minor child. ...

Qualified Personal Residence Trust

is a specific type of trust that allows its creator to remove a personal home from his or her estate for the purpose of reducing the amount of gift tax that is incurred when transferring assets to a beneficiary.

Revocable Trust

a trust whereby provisions can be altered or canceled dependent on the grantor. During the life of the trust, income earned is distributed to the grantor, and only after death does property transfer to the beneficiaries

Dynasty Trust

a long-term trust created to pass wealth from generation to generation without incurring transfer taxes, such as the gift tax, estate tax, or generation-skipping transfer tax (GSTT), for as long as assets remain in the trust. The dynasty trust's defining characteristic is its duration

Digital Assets

includes files stored on my digital devices, including but not limited to, desktops, laptops, tablets, peripherals, storage devices, mobile telephones, smartphones, and any similar digital device which currently exists or may exist as technology develops or such comparable items as technology develops.

Probate

the official proving of a will... legal process in which a will is reviewed to determine whether it is valid and authentic. Probate also refers to the general administering of a deceased person's will or the estate of a deceased person without a will. The court appoints either an executor named in the will (or an administrator if there is no will) to administer the process of collecting the assets of the deceased person, paying any liabilities remaining on the person's estate, and finally distributing the assets of the estate to beneficiaries named in the will or determined as such by the executor.

Contingent Beneficiary

s someone or something that receives the benefits of an account if the primary beneficiary can't or won't do so after the account owner's death. Contingent beneficiaries stand in the wings, next in line to inherit if something should go wrong. Think of them as a backup plan.

Fiduciary

a person or organization that acts on behalf of another person or persons to manage assets. Essentially, a fiduciary owes to that other entity the duties of good faith and trust. The highest legal duty of one party to another, being a fiduciary requires being bound ethically to act in the other's best interests.

Title

a bundle of rights in a piece of property in which a party may own either a legal interest or equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document, such as a deed, that serves as evidence of ownership.

Asset Protection Trust

An asset protection trust is a vehicle for holding an individual's assets to shield them from creditors. Asset protection trusts allow creditors settle with their respective debtors on favorable terms and avoid costly litigation. This vehicle has complex regulatory requirements, such as being irrevocable, and contains a spendthrift clause. An asset protection trust does provide for occasional distributions, but those distributions can only occur at an independent trustee's discretion.

Charitable Trust

an irrevocable trust established for charitable purposes and, in some jurisdictions, a more specific term than "charitable organization". A charitable trust enjoys a varying degree of tax benefits in most countries. It also generates good will. Some important terminology in charitable trusts is the term ‘corpus’ (Latin for ‘body’) which refers to the assets with which the trust is funded and the term ‘donor’ which is the person donating assets to a charity.[1]

Constructive Trust

an equitable remedy resembling a trust (implied trust) imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is intercausative with unjust enrichment and/or property interference

Special Needs Trust

a legal arrangement and fiduciary relationship that allows a physically or mentally disabled or chronically ill person to receive income without reducing their eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income, Medicare or Medicaid

Tax By-Pass Trust

a bypass trust is an irrevocable trust into which the settlor deposits assets and which is designed to pay trust income and principal to the settlor's spouse for the duration of the spouse's life.

Marital Trusts (A-B Trust)

A-B trust is a joint trust created by a married couple for the purpose of minimizing estate taxes. ... It is formed with each spouse placing assets in the trust and naming as the final beneficiary any suitable person except the other spouse.

Bypass Trusts (“B” or Credit Shelter Trusts)

designed to allow affluent couples to reduce or completely avoid estate taxes when passing assets on to heirs, typically the couple's children. ... And upon the surviving spouse's death, the trust's assets are transferred to the remaining beneficiaries without any estate taxes levied.

Generation-Skipping Trust

a type of legally binding trust agreement in which the contributed assets are passed down to the grantor's grandchildren, not the grantor's children.

Testamentary Trust

A testamentary trust is a legal and fiduciary relationship created through explicit instructions in a deceased's will. A testamentary trust goes into effect upon an individual's death and is commonly used when someone wants to leave assets to a beneficiary, but doesn't want the beneficiary to receive those assets until a specified time. A testamentary trust is irrevocable after the death of the testator.

Totten Trust

a form of trust in the United States in which one party (the settlor or "grantor" of the trust) places money in a bank account or security with instructions that upon the settlor's death, whatever is in that account will pass to a named beneficiary.

Qualified Terminable Interest Property (QTIP) Trust

allows a spouse to give a life estate in property to his or her spouse without incurring the federal gift tax. The donee (recipient) spouse has an income interest in the trust and does not have a power of appointment over the principal.

Irrevocable Life Insurance Trust (ILIT)

An ILIT is a type of living trust that's specifically set up to own a life insurance policy. You can transfer ownership of an existing policy to the ILIT after it's been formed, or the trust can purchase the policy directly.

You can't serve as trustee of the trust, however. The trust must be irrevocable, which means that you must "fund" it, placing the policy into its ownership, and step aside. You must relinquish any right to make changes to the trust or to dissolve it.

Charitable Remainder Trust

a tax-exempt irrevocable trust designed to reduce the taxable income of individuals by first dispersing income to the beneficiaries of the trust for a specified period of time and then donating the remainder of the trust to the designated charity.

Variable Universal Life Insurance

Variable universal life (VUL) is a type of permanent life insurance policy with a built-in savings component that allows for the investment of the cash value. Like standard universal life insurance, the premium is flexible. VUL policies typically have both a maximum cap and minimum floor on the investment return associated with the savings component.

Indexed Universal Life Insurance

(IUL) allows the owner to allocate cash value amounts to either a fixed account or an equity index account. Policies offer a variety of well-known indexes such as the S&P 500 or the Nasdaq 100. ... IUL policies offer tax-deferred cash accumulation for retirement while maintaining a death benefit.

Guaranteed Universal Life Insurance

a type of permanent life insurance that offers a guaranteed no lapse rider guaranteeing the policy remains in force even if the cash value drops to zero. Upon the death of the insured, the lump sum death benefit is paid income tax free to the policy beneficiary

Whole life insurance

life insurance that pays a benefit on the death of the insured and also accumulates a cash value.

Term life insurance

insurance that pays out a sum of money either on the death of the insured person or after a set period.

Testamentary

a trust which arises upon the death of the testator, and which is specified in his or her will. A will may contain more than one testamentary trust, and may address all or any portion of the estate.

Supplemental Needs Trust

Supplemental Needs Trusts are often used to receive an inheritance or personal injury litigation proceeds on behalf of an individual with a disability, in order to allow the person to qualify for Medicaid benefits despite their receipt of the settlement.

Springing Power of Attorney (Limited POA)

Springing Powers: An LPOA that has springing powers only becomes active if it is triggered by a stipulated event. Springing power LPOAs are typically used with a will or family living trust. Basically, this type of LPOA only comes into effect when a client dies or becomes incapacitated and can no longer manage their accounts. It cannot be triggered if the client is capable of handling his or her own affairs

Community Property

The laws in community property states vary in their finer details, but community property means that all assets purchased or acquired by a couple during their marriage are owned equally by both of them. It is the case regardless of how the asset is titled.

States with Community Property Laws

These states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Such states typically divide property equally, whereas all other states follow equitable distribution, meaning that a judge decides what is equitable, or fair.

Generation-skipping transfer (GST) tax

also sometimes called the generation-skipping transfer tax, can be incurred when grandparents directly transfer money or property to their grandchildren without first leaving it to their parents

Special Needs Trust

a legal arrangement and fiduciary relationship that allows a physically or mentally disabled or chronically ill person to receive income without reducing their eligibility for the public assistance disability benefits provided by Social Security, Supplemental Security Income, Medicare or Medicaid

Unlimited Marital Asset Transfer

The unlimited marital deduction is a provision in the United States Federal Estate and Gift Tax Law that allows an individual to transfer an unrestricted amount of assets to his or her spouse at any time, including at the death of the transferor, free from tax. The unlimited marital deduction is considered an estate preservation tool because assets can be distributed to surviving spouses without incurring estate or gift tax liabilities.

Conservatorship

a legal concept in the United States. A guardian or a protector is appointed by a judge to manage the financial affairs and/or daily life of another due to physical or mental limitations, or old age.

DNR

is a medical order written by a doctor. It instructs health care providers not to do cardiopulmonary resuscitation (CPR) if a patient's breathing stops or if the patient's heart stops beating