Glossary Terms

Estate Planning Definitions & Glossary

Below is a helpful list of terms and words found on this site or related to estate and trust planning.

Decedent

A person who has died.

Decoupling of the State Death Tax and Federal Estate Tax Systems

Refers to a law established in 2005 that effectively decoupled the federal and state transfer tax systems. The effect of this law is that without proper planning, for those married individuals who are residents of or own property in states whose estate tax exemptions are less than the federal estate tax exemption there might be estate tax due upon the first spouse's death.

Descendant

A person who is a relative in a direct line from another person - an issue. Typically children, grandchildren then great grandchildren

Devise

Real estate transferred under a will or trust

Discounted Value for Transfer Tax Purposes

Refers to the value of an asset that is reported for transfer tax purposes as less than fair market value due to a variety of factors, which may include: (1) lack of marketability; (2) minority interest; (3) lack of control and (4) restriction on transfer. Common in family limited partnerships and similar entities.

Donee

A person who receives a gift. Gifts can be made to trusts as well as to individuals.

Donor

A person who makes a gift.

Durable Power of Attorney

A document in which you grant a certain individual (your attorney in fact) the authority to legally sign for you, even if you should become disabled. Durable Powers of Attorney are most commonly used on bank accounts, brokerage accounts and on deeds of transfer, although they may include other powers. The "durable" connotes that the power of attorney remains valid even if you become incapacitated. Durable Powers of Attorney cease at death, however. Contrast the above with a plain (non durable) power of attorney that would not be valid in the event of your incapacity.

Dynasty Trust

A trust established for descendants which is intended to remain in existence for as long as a term as is permitted under the rule against perpetuities. In other words, a trust that may last several generations. Such a trust is typically sheltered from generation skipping tax (GST) by consuming the grantor's GST exemption, so that the trust property will not be subject to gift or estate tax during its existence.

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Disclaimer: The information contained on this site shall not be construed as legal advice, as the information is general in nature and is not specific to any individual client or jurisdiction. No attorney/client relationship shall be established in the use of this site.While every effort is made to keep the information up to date, there is no warranty, expressed or implied, that the information contained herein is current. One should always consult with his or her own qualified estate planning attorney before acting on any legal or tax matter.