Planned Giving

Glossary of Terms

Administrator
The person appointed by the court to manage one’s estate when he/she dies without leaving a will. Administrators have the same duties as executors.

Appreciated Property
Property, such as real estate or stock, which has increased in value.

Beneficiary
An individual designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan.

Bequest
To give or leave something by will, typically personal property or assets.

Charitable Trust
A trust having a charitable organization as a beneficiary.

Codicil
A legal instrument made to modify an earlier will.

Cost Basis
The original value of an asset, such as stock, before its appreciation or depreciation.

Durable Power of Attorney
A written legal document that lets an individual designate another person to act on his/her behalf in the event the individual becomes disabled or incapacitated.

Estate Tax
A tax imposed at one’s death on the transfer of most types of property.

Executor (or personal representative)
The person named in a will to manage the estate. This person will collect the property, pay any debt, distribute your property or assets according to the will.

Fiduciary
A person or institution legally responsible for the management, investment and
distributions of funds. Examples include trustees, executors and administrators.

Gift Tax
Tax on gifts generally paid by the person making the gift, rather than the recipient.

Gift-Tax Annual Exclusion
The provision in the tax law that exempts the first $11,000 (as adjusted for inflation) in present-interest gifts a person gives to each recipient during a year from federal gift taxes.

Grantor
The person who transfers assets into a trust for the benefit of another.

Gross Estate
The total property or assets held by an individual as defined for federal estate tax purposes.

Guardian
An individual legally appointed to manage the rights and/or property of a person
incapable of taking care of his/her own affairs.

Interest
Any right or ownership in property

Intestate
The term applied when an individual dies without a will.

Joint Ownership
The ownership of property by two or more people, usually with the right of survivorship.

Life Insurance Trust
A trust that has the proceeds of an individual’s life insurance policy as its principal.

Living Trust
A revocable trust established by a grantor during his/her lifetime in which the grantor transfers some or all of his/her property into the trust.

Living Will
A legal document directing that the maker’s or signer’s life will not be artificially
supported in the event of a terminal illness or accident.

Marital Deduction
A deduction allowing for the unlimited transfer of any or all property from one spouse to the other generally free of estate and gift tax.

Power of Attorney
A written legal document that gives an individual the authority to act for another.

Probate
The court process for determining the validity of a deceased person’s will.

Trust
A written legal instrument created by a grantor during his or her lifetime or at the death for the benefit of another.

Unified Credit
A federal tax credit that offsets gift tax and estate tax liability. For gift tax purposes, the unified credit remains at $345,800 through 2009, which is equivalent to the applicable exclusion amount of $1 million. For estate tax purposes, the unified credit is being gradually increased from $345,800 in 2003 to $1,455,800 in 2009, which is equivalent to an applicable exclusion amount of $1 million in 2003 and $3.5 million in 2009.

Will
A legally executed document that directs how and to who a person’s property is to be distributed after death.