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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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Rabbi Trust |
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A type of trust used by businesses or other entities to defer the payee's recognition of income (and therefore tax on that income) by use of contingencies tied to the receipt of said income. Otherwise known as a non-qualified deferred compensation plan. The Rabbi Trust is so named because one was originally established for a rabbi, said trust was designed to avoid the rabbi's constructive receipt of the income, thereby deferring the recognition of income and resulting tax.
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Remainderman or Remainder Beneficiary |
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The person or persons who will receive the assets of the trust after the income beneficiaries' interest ends.
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Required Minimum Distributions |
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Refers to distributions that are required from an account by law. IRA, 401(k) and other qualified retirement accounts are examples of accounts that the account owner must take required minimum distributions from.
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Residuary or Remainder |
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The assets remaining in your estate after all of the specific devises have been made and all expenses and taxes are paid. When a pour over will is used, the residuary is usually poured into your revocable living trust.
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Restriction on Transfer |
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Refers to an entity's legal documents, such as a partnership agreement, operating agreement or shareholders agreement that restricts the transfer or disposition of shares. In other words, the partner, member or shareholder does not have the legal right to sell his or her interest to anyone he or she chooses.
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Retirement Plan Trust - Family Estate & Legacy Retirement Plan Trust (TM) |
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A trust designed to act as a beneficiary under a qualified retirement plan account, such as a 401(k) or IRA. The trust is typically designed to comply with the IRS "identifiable beneficiary" rules so that the beneficiaries may stretch the tax deferred growth of their share of the retirement plan account over the remainder of their lifetimes. The trust may offer valuable creditor and predator protections.
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Revenue Procedure (Rev Proc) |
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A matter of procedural importance to both the taxpayer and the IRS concerning the administration of the tax laws. May be relied upon as precedent.
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Revenue Ruling (Rev Rul) |
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Issued by the National Office of the IRS to express an official interpretation of the tax law as applied to a specific transaction. May be relied upon as precedent.
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Reversionary Interest |
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A possible return of assets or property to you that you have given away. You have retained some interest or control over those assets or property.
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Revocable Living Trust |
A trust that can typically be amended, restated or revoked at the discretion of the Settlor or Grantor, the person who created it. Revocable Trusts are used to avoid a guardianship in the event of the grantor's disability, a probate in the event of the grantor's death, and may contain provisions to preserve and protect assets for the grantor's beneficiaries. Because the settlor has complete power over the trust, the trust assets are generally included in the settlor's estate for federal estate tax purposes and the trust usually does not offer creditor protections.
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