|
|
Estate Planning
Definitions & Glossary
Below is a helpful list of terms and words found on this site or
related to estate and trust planning.
C
|
Capital Gain or Loss |
|
Profit or loss on the sale of a capital asset
|
|
Cash Surrender Value |
Refers to the amount of proceeds the owner of a life insurance policy will receive if he or she cancels the policy.
See also Interpolated Terminal Reserve Value
|
|
Certificate of Trust |
|
A document that provides third parties information sufficient to open accounts in the name of the trust without having to provide a complete copy of the trust itself. Many state laws now provide that third parties may rely upon a certificate of trust, when joined by a trustee's affidavit to transact business with a trustee.
|
|
Challenging a Disposition in a Will or Trust |
The three most common methods of challenging a disposition in a will or trust include: (1) the document was improperly executed; (2) the testator was incompetent at the time of the execution of the document or (3) the testator was unduly influenced.
See also "In Terrorim Clause".
|
|
Charitable Lead Trust |
|
A trust for a fixed term of years wherein a charity is the beneficiary of an annuity payment or unitrust payment and upon the end of the term of years the remainder of the trust is distributed to individuals or other noncharitable beneficiaries.
|
|
Charitable Remainder Trust |
|
A trust for either a fixed term of years or tied to an individual's (or several individuals') lifetime(s) wherein an annuity payment or unitrust payment is paid to noncharitable beneficiaries, and upon the expiration of the trust term the remainder is paid to a charity.
|
|
Closely Held Business Interest |
|
Refers to a business entity such as a Family Limited Partnership, S Corporation, LLC or other entity that has a limited number of shareholders as opposed to a publicly traded entity that may have thousands, if not millions, of shareholders.
|
|
Conservator |
|
Generally, an individual or trust company appointed by a court to care for property. Specifically, an individual or a trust institution appointed by a court to care for and to manage the property of an incompetent person, in the same way that a guardian cares for and manages the property of a minor. Often synonymous with guardian of the estate.
|
|
Credit Shelter Trust |
|
Usually describes a testamentary trust that consumes the grantor's or testator's federal and/or state estate tax exemption amount. The credit shelter trust may be held for the surviving spouse, other beneficiaries or combination thereof. Typically the credit shelter trust may, during the surviving spouse's lifetime grow and not be subject to estate tax when distributed to the remainderman beneficiaries upon the surviving spouse's death.
|
|
Crummey Powers |
|
Crummey powers are typically found in irrevocable life insurance trusts in order to qualify contributions to the trust as gift tax free annual exclusion gifts. Named after a 1969 Court case, the court ruled that by allowing the beneficiary of an irrevocable trust a limited amount of time to withdraw a contribution to the trust made to the trust for his or her benefit, the contribution is treated as a present interest gift even if the beneficiary does not enjoy the fruits of the gift until some future date. In the case of an insurance trust, it may be several years between the date of the gift to pay the insurance premium and the receipt of the insurance proceeds, for example.
|
|
Curator |
|
An individual or a trust company appointed by a court to care for the property of a minor or an incompetent person. In some states, the curator is essentially the same as a temporary administrator or a temporary guardian.
|
|
