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Estate Planning
Definitions & Glossary
Below is a helpful list of terms and words found on this site or
related to estate and trust planning.
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General Power of Appointment |
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See Power of Appointment
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Generation Skipping Transfer Tax (GSTT) |
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A tax assessed on amounts above the exemption amount ($3.5 million as of 2009) to anyone at least two generations below the donor. The predeceased child exception may apply, however. The GSTT is actually a penalty tax assessed in addition to the estate tax. This is the government's attempt to limit the amount that you can pass down through the generations without it being taxed at each successive generation's deaths.
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Generation Skipping Trust |
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A trust that has beneficiaries named who are two or more generations younger than the grantor of the trust.
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Gift |
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The transfer of property without receiving something of equal value. A "sale" of your home for $1, for example, is a gift to the extent that your home is worth more than $1.
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Gift Tax |
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A tax on the value of a gift to another. Some gifts, such as annual exclusion gifts, are without tax. Gifts in excess of the annual exclusion gift amount, or those that are below the amount but are not present interest gifts may require the filing of a Form 709. Usually, one's federal gift tax exemption (in 2009 said amount is $1 million lifetime) is first consumed. Taxable gifts over said amounts require the actual payment of gift tax.
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Grantor |
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The maker and party who signs his or her trust. Also known as a "Settlor".
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Grantor Retained Annuity Trust (GRAT) |
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Typically is an irrevocable trust wherein the grantor contributes assets, money or property to the trust and retains an annuity payment for a fixed term of years. At the end of the term the trust terminates and the remainder is distributed to other beneficiaries, such as the grantor's children. So long as the grantor survives the term of the trust, the remainder is usually excluded from the grantor's estate for estate tax purposes.
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Grantor Trust |
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For income tax purposes, a trust in which the grantor is treated as the owner of the trust and is taxed on its income. A grantor trust may use the grantor's social security number as the trust's tax identification number. The trust is considered by the IRS to be the grantor, and not a separate taxpayer.
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Gross Estate |
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One's gross estate for federal estate tax purposes is equal to the fair market value of one's assets as of his or her date of death.
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Guardian |
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An individual or a trust company appointed by a court to care for the property of the person (or both) of a minor or incompetent person. When the guardian's duties are limited to the property - he is known as a guardian of the property or the guardian of the estate; when the duties are limited to caring for the person, he is known as the guardian of the person; and when his duties apply both to the property and to the person he is known as a plenary guardian or merely as a guardian. In some states the term committee, conservator, curator, or tutor is used to designate one person who performs substantially the same duties as those of a guardian.
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