APPRECIATED ASSETS are assets that have a higher market value than their basis or tax purpose value. Such assets would, if sold by an individual or non-charitable organization at a price higher than their basis, potentially generate a taxable capital gains (either long-term or short-term depending on the holding period). The ATTORNEY- or lawyer – is the person licensed by the state to practice law and assist the executor, trustee, and guardian. It is conceivable that each could hire a separate attorney, but usually one attorney represents all three.
The BASIS is the tax purpose value of the property or asset used in establishing the potential capital gains amount.
A BENEFICIARY is the person and/or organization that receives the benefits (usually assets or income) of the trust.
A BEQUEST is a gift of property or assets to a beneficiary as defined in a will.
A BYPASS TRUST is set up to avoid or bypass the surviving spouse’s estate, which enables each spouse to use the federal estate tax exemption.
The CHARITABLE GIFT ANNUITY offered through a charity is used by many to provide income for the annuitant and a second beneficiary, if any. The annuitant (the person investing funds through the charity) receives a contract or agreement from the charity which states that the charity will pay the annuitant a fixed income for life (lives) with payments to start immediately or at some set future time. Probate or court involvement is avoided on these funds. The income paid under the annuity is secured by the assets of the charity. See Gift Annuity Benefits for more details.
TESTAMENTARY TRUST – A will can have a trust written into it, called a testamentary trust, which is set into motion by the court after the will reaches a certain point of execution, and is used only after the death of the person whose estate it represents.
A TRUST is defined as any arrangement where property is to be held and administered by a trustee for the benefit of those for whom the trust was created. Depending on the type and how it is established, a trust may be revocable (changeable) or irrevocable (not changeable).
The TRUSTEE is the person or institution named by a person making the trust, or appointed by the court, to carry out the terms of the trust. Assuming a trust has been set up through a will, when the executor’s job is finished, the trustee’s job begins.
A TRUSTOR is the individual who establishes the trust. Also referred to as the GRANTOR and/or SETTLOR.
A WILL is the legal expression or declaration of a person’s wishes as to the disposition of the person’s property, to be performed or take effect after the person’s death.