|
|
Estate Planning
Definitions & Glossary
Below is a helpful list of terms and words found on this site or
related to estate and trust planning.
F
|
Fair Market Value |
|
The test used by the IRS to determine whether a transfer was appropriately valued. Fair Market Value refers to the value that a willing and unrelated seller and buyer would agree in a similar transaction.
|
|
Family Limited Partnership |
|
A partnership wherein a general partner controls the partnership property and all of the other partners are limited partners, similar to a silent investor in a business. Family limited partnerships are used to centralize the management of family owned businesses and properties through multigenerational ownership. Typically transfers of family limited partnership interests are discounted from what would otherwise be the fair market value of the underlying assets since the limited partnership interests lack control over the entity, cannot be freely traded, lack marketability and usually are minority interests.
|
|
Family Trust |
|
See Credit Shelter Trust
|
|
Fiduciary |
|
An individual or trust company held responsible for the duty of acting for the benefit of another person as to matters coming within the scope of the relationship between them. A trustee is the fiduciary for the trust's beneficiaries; a guardian is the fiduciary for his ward; and an agent is the fiduciary for her principal - all are examples of a fiduciary relationship.
|
|
Form 1041 |
|
A fiduciary trust income tax return is often referred to as a Form 1041
|
|
Form 1310 |
|
An IRS form used to claim a refund for a deceased taxpayer.
|
|
Form 706 |
|
A federal estate tax return is often referred to as a Form 706, and becomes due nine months from the date of the decedent's death. Like income tax returns, estate tax returns may be extended for a period of six months, however any estate tax due must be paid upon the original due date of the return.
|
|
Form 709 |
|
A federal gift tax return is often referred to as a Form 709. A gift tax return is due on the April 15th following the calendar year of the transaction. Although a gift tax return may be extended, the tax due must be paid by the original due date of the return.
|
|
Form 712 |
|
IRS form issued by an insurance company that reflects the value of death benefits paid and to whom the benefits were paid for estate tax reporting purposes on the Form 706.
|
|
Funding |
|
The act of "funding" your trust refers to the act of transferring assets into your trust. Bank and brokerage accounts are funded by being retitled into the legal name of the trust. Real Property is funded by means of a deed.
|
|
The Family Estate and Legacy Solution |
|
A unique process designed to transform your legal, tax and financial concerns into a coordinated and understandable estate plan.
|
|
