Administration: The management of a decedent's estate including the payment of expenses, debts and obligations, and the general settling of the estate.

Annual Gift Tax Exclusion: Technique to allow gifts without the imposition of estate or gift taxes.

Administrator: An individual or entity, such as a trust department, appointed by a court to settle the estate of a person who has died without leaving a valid will.

Alternate Beneficiary: Person or organization named to receive your assets if the primary beneficiaries in your Trust die before you. Also called a "contingent" beneficiary.

Assets: Anything you own, including your home and other real estate, bank accounts, life insurance, investments, partnership interests, a business, furniture, jewelry, art, clothing, and collectibles. 

Beneficiary: Person or entity entitled to receive benefits from a will, insurance policy, trust agreement or employee benefit plan.

Codicil: A written change or amendment to a Will.

Contest: To dispute or challenge the terms of a will, trust, or guardianship.

Corporate Trustee: An institution, like a bank or trust company, that specializes in managing or administering trusts. 

Co-Trustees: Two or more individuals who have been named to act together in managing a trust's assets. A corporate trustee can also be a co-trustee. 

Creditor: Person or institution to whom money is owed.

Deceased or Decedent: One who has died.

Deed: A document that lets you transfer title of your real estate to another person(s).

Disclaim: To refuse to accept a gift or inheritance so that 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: A power of attorney that gives another person full or limited legal authority to sign your name on your behalf in your absence for asset management. Can become valid even if you are able to act on your own behalf or only if you lose capacity. Ends at death.

Estate: The real and personal property of a decedent; a specific interest in property.

Estate Taxes: Federal or state taxes on the value of the assets distributed after someone's death, if above applicable exemption amount (currently $5.43 million per person, at the federal level). Also called death taxes.

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

Federal Estate Tax Exemption: Amount of an individual's estate that is exempt from federal estate taxes. $5.45 million in 2016, with additional increases scheduled.

Fiduciary: An individual or entity in position of trust who has accepted the duty of acting for the benefit of another.

Funding: The process that entails the transfer of assets you own as an individual into the name of your Trust.

Grantor: A person who transfers property to a trust. The creator of a trust. Also called a Settlor or Trustor.

Generation-Skipping Transfer Tax: This is a Federal tax on assets that are given to individuals who are more than one generation away from the donor. An example would be a grandparent giving an asset to a grandchild either during life or at death. Everyone has an exemption from this tax equal to the Federal Estate Tax Exemption amount (currently $5.45 million).

Gross Estate: The value of an estate before debts are paid.

Health Care Power of Attorney: A legal document appointing someone to act as one's agent to make health care decisions for you should you become incapacitated.

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

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.

Inheritance Taxes: State taxes owed by the beneficiary on the value of the assets received as a result of inheritance. Also called death taxes.

Intestate: Died without a will.

Irrevocable Life Insurance Trust ("ILIT"): Typically used to shelter an insurance death benefit from estate taxes and may provide liquidity to pay estate taxes and settlement costs. A trust is created, then the trust purchases and owns a life insurance policy. Upon death, the insurance proceeds are paid out in accordance with the terms of the trust.

Irrevocable Trust: A trust that, by its terms, cannot be revoked or cancelled by the grantor once established.

Joint Tenancy: When property is held in joint tenancy with rights of survivorship by two or more people, upon the death of one of those owners, all of his or her interests are transferred to the surviving owners. Joint ownership.

Limited Liability Company ("LLC"): Entity frequently used by many businesses and/or families to help manage and protect assets.

Liquid Assets: Cash and other assets (e.g., stocks, bonds, etc.) that can easily be converted into cash.

Living Trust: A trust that is operative during the lifetime of the grantor, as opposed to a trust under will or a testamentary trust. Also known as an inter vivos trust or a revocable trust.

Living Will: A legal document in which you give directions for sustaining treatment should you become unable to communicate your wishes. It is often combined in Delaware and Pennsylvania with the health care power of attorney. Also called an "advance health care directive" or "physician's directive."

Medicaid: A federally-funded health care program for the poor and minor children, co-administered by the states and federal government.

Medicare: A federally-funded health care program, primarily for Americans over age 65 and who are covered by Social Security or Railroad Retirement Benefits.

Minor: One who is under the legal age for an adult, which varies by state (usually 18 or 21).

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).

Net Value: The current market value of an asset less any loan or debt.

Per Stirpes: A way of distributing your estate so that your surviving descendants will receive only what their immediate ancestor would have received if he/she had been living at your death. For example, if your child passes away before you, your grandchildren by that child will receive your child's inheritance.

Personal Representative: Another name for 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 your living trust upon your 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 this includes assets you own in your name and those paid to your estate. Usually does not include assets owned jointly, payable-on-death accounts, revocable trusts, life insurance, retirement accounts, and other assets with beneficiary designations.

Real Estate: Land and property that is permanently attached to land (like a building or house). Also called "real property."

Required Minimum Distribution ("RMD"): The amount you are required to withdraw each year from your tax-deferred plan, such as an IRA, after you reach your required beginning date.

Remainderman: The person who is entitled to an estate after the prior estate has expired.

Revocable Trust: A trust that by its terms may be terminated by the settlor or by another person.

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.

Spendthrift Clause: Protects assets in a trust from a beneficiary's creditors, including divorce proceedings.

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-evaluated as of the date of the owner's death.

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.

Supplemental Needs Trust: Allows you to provide for a disabled love one without jeopardizing their qualification for government benefits. Also called a "Special Needs Trust."

Surviving Spouse: The spouse who is living after one spouse has died.

Step-Up in Basis: A step up or down in basis is an adjustment for tax purposes to an asset's fair market value at the date of death of the owner of the asset.

Tangible Personal Property: Movable property. Includes furniture, artwork, jewelry, household goods, and any other similar items. It does not include cash, stocks, bonds, or real estate.

Tax-Deferred Plan: A retirement savings plan (like IRA, 401K, pension, profit sharing, or Keogh) that qualifies for special income tax treatment. The contributions made to the plan and subsequent appreciation of the assets are not taxed until they are withdrawn at a later time, ideally, at retirement, when your income and tax rate are lower.

Tenants-in-Common: A form of joint ownership in which two or more persons own the same real estate. At the death of a tenant-in-common, his or her share transfers to his or her heirs and not to the other owners of the real estate.

Tenants-by-the-Entirety: A highly protected form of joint ownership of real estate between husband and wife. When one spouse dies, his or her share of the asset automatically transfers to the surviving spouse.

Testamentary Trust: A trust in a will. Does not take effect until death and does not avoid probate.

Testate: A person who dies with a will.

Trust: A structured form of ownership 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.

Unfunded: Your living trust is unfunded if you have not transferred assets into it, or re-titled assets into the name of your trust.

Will: A written document with instructions for the distribution of an individual's assets after death.

To make an appointment, please contact Elle Van Dahlgren Law, LLC by calling 302-407-5009 today.