|
|
Estate Planning
Definitions & Glossary
Below is a helpful list of terms and words found on this site or
related to estate and trust planning.
A
|
Accounting |
|
An accounting of a probate estate or a trust administration typically includes a beginning inventory of date of death values of the estate or trust, a statement of the income earned during the administration, capital gains or losses incurred, expenses and taxes paid and amount available for distribution.
|
|
Accrued Interest |
|
Interest due on a bond, note, or other interest bearing instrument since the last interest payment was made.
|
|
AFR - Applicable Federal Rate |
|
Interest rates used by the IRS when determining the value of certain split interest trust shares and other transfers. These rates are adjusted monthly as the market dictates and published in Revenue Procedures issued by the IRS.
|
|
Alternative Valuation Date |
|
For tax purposes, assets of an estate or revocable trust are generally taxed as of the grantor's date of death. However, the personal representative or trustee may elect instead to have the assets valued six months following date of death. This may be useful for estate tax purposes if the assets have declined in value between the date of death and the six month valuation date.
|
|
Annual Exclusion Gift |
|
The amount (currently $13,000 and is indexed to inflation) per year that a person is allowed to give to any person without incurring gift tax. There is no limit on the number of annual exclusion gifts one can make in any given year. To qualify for this exclusion, a gift must be of a "present interest" meaning that the recipient has the present ability to enjoy the gift, as opposed to some future right.
|
|
Annuity Payment |
|
A fixed payment that may constitute both income and principal.
|
|
Apportionment of Expenses and/or Taxes |
|
Apportionment of taxes and/or expenses refers to which assets or bequests in your will or trust bears the burden of said taxes and expenses. State law dictates whether certain bequests carry with them their proportionate burden of taxes and expenses. Many states have different laws regarding these issues.
|
|
Attorney in Fact |
|
A person who, acting as an agent under a power of attorney, is given the written authority by another person to transact business for him or her. An attorney-in-fact is often given the power to write checks, pay bills, transact business on investment accounts and sign deeds, for example. An attorney-in-fact need not be an attorney at law.
|
|
