Estate Planning Glossary
If you are an attorney or CPA, and you would like more specific information about the Edward Jones Trust Company, visit our "Frequently Asked Questions for Tax Professionals" page.
Creator
See Grantor.
Credit Shelter Trust
A Trust that uses an individual's $2,000,000 exclusion for federal estate and gift tax purposes. The amount allowed under the current law is $2,000,000 the amount is subject to change in the future
Disclaimers
The refusal or rejection of any rights, interest, or property that was offered to a person. Taxpayers have up to nine months to disclaim an asset from the time the gift was made. (In an estate, it would be nine months from the date of death.)
Durable Power of Attorney
See Power of Attorney.
Form 706
IRS Estate Tax Return
Form 709
IRS Gift Tax Return
Form 1041
IRS Estate and Trust Income Tax Return
Grantor
The person who sets up or creates the trust; also called settlor, trustor or creator.
Grantor Retained Trust
An irrevocable trust where the grantor assigns trust assets, but retains either income or the use of the property for a specified number of years. The trust assets are handed over to the beneficiaries at the prearranged date. There are three different types of grantor retained trusts:
- GRAT - Grantor Retained Annuity Trust
- GRIT - Grantor Retarined Income Trust
- GRUT - Grantor Retained Unit Trust
Gross Value
The value of an estate before any deduction (i.e., debts, charitable contributions, etc.). Probate fees are usually calculated on the gross value of the estate.
Inter Vivos Trust
Another name for a living trust. (See Living Trust.)
Intestate
Describes one who dies without a will. Typically, state statutes will then dictate the distribution of assets.
Personal Representative
Another name for an executor or administrator.
Power of Attorney
A legal document that gives someone else full legal authority to sign on your behalf in your absence (different from the fiduciary duty of a trustee). Ends at disability or death. Some states permit a durable power of attorney that is valid through disability and ends at death. Limited powers of attorney give someone else only limited authority for a very specific purpose.
Probate Fees
Costs associated with probate, usually based as a percentage of the gross value of the estate. These costs generally range from two to ten percent for statutory probate fees. Extraordinary probate fees may exceed state limits and are in addition to the statutory fees.
Probate Guardianship
A court-controlled program either for persons who are unable to manage their own affairs due to disability or incompetence (often called living probate), or for minor children.
Qualified Terminable Interest Property (Q-TIP Trust)
Gives the first-to-die spouse the ability to control where the corpus of this trust will go after the death of the second spouse. This election requires that the surviving spouse receive the income from the Q-TIP trust for life. The balance of the trust is included in the surviving spouse's gross estate upon death and is distributed in accordance with instructions of the first spouse to die.
Real Property
Land and/or property that is permanently attached to land (such as a building or house).
Settlor
See Grantor.
Special Bequests
Also known as special gifts. A separate listing of personal property to go to selected persons which can be changed or revoked at any time.
Statutory Fees
Maximum probate costs established by each state. The statutory maximums generally range from two to ten percent.
Tenancy-by-the-Entirety
Ownership must involve a husband and wife. Termination of the account requires joint action by both spouses (e.g., divorce). This type of ownership is typically used in separate property states.
Tenancy-in-Common
A form of joint ownership involving two or more persons. Upon the death of a tenant-in-common, ownership transfers to the designated beneficiaries or heirs, not to the remaining joint owner(s).
Testate
Describes one who dies with a will.
Testator
One who creates a will.
