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A statement in front of a person who is qualified to administer oaths (a Notary) that a document bearing the person's signature was actually signed by the person. The Notary will then certify on the document that the person actually signed the document.
A trust giving a surviving spouse (or mate) a
life estate in property of a deceased spouse or mate. This type of
trust is designed to save on eventual estate taxes by giving the
surviving spouse (or member of an unmarried couple) the income from
the property of the first spouse to die (not the property itself).
It can also be called a marital life estate trust, spousal bypass
trust, or an exemption trust.
A trust designed to minimize a married couple's
estate tax liability by utilizing both spouse's Applicable Exclusion Amount. The trust property is divided into
"A" and "B" portions, representing the surviving and deceased spouses share the couple’s property, respectively. The surviving spouse has broad, but not complete, control over the deceased spouse's portion. Also called a Bypass Trust, Exemption Trust, Marital Share Trust, Marital Life Estate, among other terms.
Re-title Certificate/Certification of Trust or
Abstract of Trust:
A condensed version of a living
trust which omits key parts such as what property is in the trust
and who are the beneficiaries. An Abstract of Trust is used to
establish that a valid living trust has been established without
disclosing specifics the person who created the trust wants to keep
A trust where trust income is
retained and not paid out to beneficiaries until certain conditions
have been satisfied.
The failure of a specific gift of property
to take effect because the property is no longer owned by the person
at the time of his death.
Administration of an estate:
The court supervised
distribution of the probate estate of a deceased person. The person
who manages the distribution is called the executor if there is a
will. If there is no will, this person is called the administrator.
(Retitle Estate Administration)
Payment of a fixed sum of money to a specified
person, by contract, at regular intervals (usually monthly).
This is a tax term relating to the valuation of property for determining profit or loss on sale. If you buy a property for $100,000, your tax basis is $100,000. If you later sell it for $250,000, your taxable profit is $150,000. See stepped-up basis.
A person who is legally entitled to
receive gifts made under a will or trust. Except when very small
estates are involved, beneficiaries of wills only receive their
benefits after the will is examined and approved by the probate
court. Beneficiaries of living trusts receive their benefits outside
of probate as provided in the document establishing the trust. A
primary beneficiary is a person who will benefit from a will or
trust if living at the descendent's death. A contingent beneficiary
is a person who may or may not inherit property, depending on the
terms of the will or trust and what happens to the primary
beneficiaries. For example, a contingent beneficiary may receive
nothing unless and until the primary beneficiary dies.
A legal term for a will provision leaving
personal property to a specified person. Another word for
A document guaranteeing that a certain amount of
money will be paid to those injured if a person occupying a position
of trust does not carry out his or her legal and ethical
responsibilities. Thus, if an executor, trustee or guardian, who is
bonded, wrongfully deprives a beneficiary of his or her property,
the bonding company will replace it, up to the limits of the bond.
Bonding companies issue bonds in exchange for premiums averaging 10%
of the face amount of the bond. The requirment for a bond is often
waived by the maker of a will or grantor of a living trust because
of the high cost and usually low risk.
Any trust that created a life estate for
a life beneficiary, with the trust principal going to the final
beneficiary when the life beneficiary dies. See AB Trust.
Any trust designed to make a
substantial gift to a charity while achieving income and estate tax
savings for the grantor.
By law, one's children are: (1) biological
offspring, (2) children who were legally adopted, (3) children born
out of wedlock and (4) children born to the maker of a will after
the will is made, but before his or her death.
A separate legal document which, after it has
been signed and properly witnessed, changes an existing will. An
amendment to a will.
Common Law Marriage:
In a minority of states, couples
may be considered married if they live together for a certain period
of time and intend to be husband and wife. It is not recognized in
California follows a system of
marital property ownership called "community property". All property
acquired after marriage and before permanent separation is
considered to belong to both spouses equally, except for gifts to
and inheritances by a spouse. Also, income from community property
is community property income.
Someone appointed by a court to manage the
affairs of a mentally incompetent person.
Taxes levied on the property of a person
who died. Federal death taxes are called "Estate Taxes". State death
taxes (if any) go by various names, including "inheritance tax".
California has no inheritance tax.
A person who has died.
A person who is an offspring, however
The right to refuse to accept property left
to you by trust or will. Sometimes there is a tax advantage when a
gift is disclaimed.
Someone who receives a gift.
Someone who gives a gift.
Durable Power of Attorney:
A power of attorney that remains effective even if the person who created it (called the
"principal") becomes incapacitated. The person authorized to act (called the
"attorney-in-fact") can make decisions for the principal as defined in the document. Often separate Durable Powers of Attorney are created for Health Care and Financial purposes. See Health Care Directive.
Generally, all the property you own when you die. This does not include property that you hold in trust, i.e. property titled to your trust. There are different ways to measure estates: the taxable estate (property subject to estate taxation), the probate estate (property that must go through probate), and the net estate (the net value of the property).
The art of reducing or minimizing
estate taxes and property subject to probate while passing your
property on to loved ones in a way that minimizes time, legal fees,
aggravation and other costs.
Creating plan determining who will receive your property after your death and governing the process of distributing your property. The goals of estate planning usually center on minimizing time and expenses, legal fees, court supervision, disputes and litigation, clarity for descendants, and estate taxes.
See Death Taxes.
The person named in your will to manage your
estate, deal with the probate court, collect your assets and
distribute them as you have specified. If you die without a will,
the probate court will appoint such a person, who is called the
administrator of the estate.
People or institutions designated
to receive life estate trust property outright upon the death of a
Funding a Trust:
Transferring ownership of property to
a trust in the name of the trustee.
Generation-Skipping Trust (also know as a Lifetime Benefit
Tax-saving trust, where the
principal is left in trust for one's grandchildren, with one's
children receiving only the trust income.
Tax on gifts made during a person's lifetime.
Many gifts are exempt from tax: gifts to tax-exempt charities or the
giver's spouse (if the recipient spouse is a U.S. citizen), and
gifts of $10,000 or less to a single recipient each calendar
The person or persons who create a trust. Also
called the trustor, settlor or creator.
Guardian of the Estate:
An adult appointed by a court
who assumes legal responsibility for a minor's property.
Guardian of the Person:
An adult appointed or selected
to care for a minor child if no biological or adoptive parent (legal
parent) of the child is able to do so. If one legal parent is alive
when the other dies, the child will automatically go to that parent
unless a court determines that the best interest of the child
requires something different.
Health Care Directive
A document that appoints an individual to make health care decisions for you in the event that you are unable to communicate for yourself and instructs them regarding your preferences. Generally this is intended to make known your wishes regarding life-prolonging medical treatment. Also known as a Living Will.
Persons who are entitled by law to inherit your
estate if you don't leave a will or other device to pass property at
A will that is completely handwritten
by the person making it. While legal in California, it is never
advised except as a last resort.
The process of determining who will act on your behalf in the event that you are unable to act for yourself. This often includes both financial or property planning, as well as indicating your health care preferences. (See Durable Power of Attorney, Health Care Directive)
To receive property from one who dies either
intestate or testate.
To die without a will or other valid estate
The method by which property is
distributed when a person fails to distribute it in a living trust
or will. In such cases, the law of each state provides that the
property be distributed in certain shares to the closest surviving
relatives. The intestate succession laws are also used if an heir is
found to be pretermitted (not mentioned or otherwise provided for in
a living trust or will).
Document; sometimes used to refer to the
document that creates a living trust.
Inter Vivos Trust:
Term used for a trust created for estate planning purposes. "Inter Vivos" is latin for "between the living." Synonym for Living Trust, Revocable Trust. See Living Trust
One's direct descendants such as children,
A method of taking title to jointly
owned real or personal property. When two or more people own
property as joint tenants and one of the owners dies, the other
owners automatically become owners of the deceased owner's
The document issued by a probate
court authorizing the executor to discharge his or her
A person who receives use of trust
property and the benefit of trust income for his or her life, but
who doesn't own the trust property itself (the principal). A life
beneficiary has no power to dispose of the trust property upon his
or her own death.
The right to use trust property and
receive income from it during one's lifetime.
Life Insurance Trust:
An irrevocable trust designed to
own life insurance and reduce the size of the original owner's
Cash or assets that can be readily
turned into cash.
A trust set up while a person is alive
and which remains under the control of that person until death. Also
referred to as an "inter vivos trust". Living trusts are an
excellent way to eliminate or minimize the value of property passing
through probate. This is because they enable the grantor to specify
that money or other property will pass directly to the beneficiaries
after their death, free of probate, and yet allow the grantor to
continue to control the property during his or her lifetime and even
end the trust or change the beneficiaries, if desired.
Living Trust with Marital Life Estate:
See AB Trust.
A document, directed to physicians, in
which you state that you do not want to have your life artificially
prolonged by technological means, but choose a natural death. By
limiting treatment, a living will limits hospital bills which can
drain or even eliminate your assets so that there is little
remaining for your heirs.
A deduction allowed by the federal
estate tax law for all property passed to a surviving spouse who is
a U.S. citizen. This deduction (which really acts like an exemption)
allows anyone to pass his or her entire estate to a surviving spouse
without any tax at all. This may be a good idea if the surviving
spouse is relatively young and in good health.
If the surviving spouse is likely to die in the near future,
however, tax problems can be made worse by relying on the marital
exemption. This is because the second spouse to die will normally
benefit from no marital deduction, which means the combined
estate, less the standard estate tax exemption, will be taxed at a
high rate. Well drafted estate planning documents can minimize the
Persons under 18 years of age. A minor is not
permitted to make certain types of decisions (for example, enter
into most contracts). All minors are required to be under the care
of a competent adult (parent or guardian) unless they qualify as
emancipated minors (in the military, married or living independently
with court permission). Property left to a minor must be handled by
a guardian or trustee until the minor becomes an adult.
Next of Kin:
The closest living relation.
All property other than land and
buildings attached to land.
A will that "pours over" property into
a living trust at death. Property left through the will generally
must go through probate before it goes into the trust.
Power of Appointment:
Having the legal authority to
decide who shall receive someone else's property. Usually property
held in a trust.
Power of Attorney:
A legal document where you authorize
someone else to act for you. See Durable Power of
A child (or the child of a deceased
child) who is not named in a will or living trust. Most states
presume that persons want their children to inherit. Consequently,
children, or the children of a child who has died, who are not
mentioned or provided for in a will or living trust (even $1) are
entitled to a share of the estate.
Property owned by a trust, as distinguished
from the income generated by that property.
A court proceeding in which: (1) the
authenticity of your will (if any) is established, (2) your executor
or administration is appointed, (3) your debts and taxes are paid,
(4) your heirs are identified, and (5) the property in your probate
estate is distributed according to your will (if there is a will).
If there is no will (or living trust), the property will be
distributed in accordance with the laws of intestate succession
which you may not like.
All of your property that will pass
through probate. Generally, this means all property owned by you at
your death less any property that has been placed in joint tenancy,
a living trust, a bank account trust, or in life insurance.
Fees paid from a decedent's estate to an
attorney during probate. The fees average 5% of the decedent's gross
estate. These fees can be eliminated with a living trust usually
saving thousands of dollars.
Property Control Trust:
A trust that imposes limits or
controls over the rights of beneficiaries for various reasons. These
Spendthrift trusts designed to prevent a beneficiary
from being able to waste trust principal.
Special needs trusts designed to assist disadvantaged
persons with special physical or other needs.
Sprinkling trusts which authorize the trustee to decide
how to distribute trust income or principal among different
Proving a Will:
Getting a probate court to accept the
fact, after your death, that your will really is your will.
A trust used to postpone estate taxes when
one spouse is a non-citizen of the U.S.
A marital trust with property left for use
of the surviving spouse as life beneficiary. No estate taxes are
assessed on the trust property until the death of the life
A rule that applies to
married couples who have moved to California. All property acquired
by them during their marriage in other states is treated as
community property at their death.
All land and items attached to the land,
such as buildings, stationary mobile homes, fences and trees are
real property or "real estate". All property which is not real
property is personal property.
The process of filing a copy of a deed or
other document with the county recorder's office. Recording creates
a public record of all changes in ownership of property.
All property which is not community
property. See Community
The tax basis of inherited property
is "stepped up" to the market value of the property at the
decedent's death. The result is substantial tax savings.
The person (or institution) who
takes over as trustee of a trust when the original trustee(s) have
died or become incapacitated.
Surviving Spouse's Trust:
When a couple has created a AB Trust, the revocable living trust of holding the surviving spouse's share of the couple's property, after the other spouse has died.
The portion of your estate that is
subject to federal or state estate taxes.
A trust created by a will.
Someone who dies leaving a valid will, or
other valid property transfer devices, dies "testate".
A document that proves ownership of
A simple savings bank trust, revocable at
any time before the death of the depositor (also called
A legal arrangement under which one person or
institution (called a trustee) controls property given by another
person (called a grantor, settlor or trustor) for the benefit of a
third person (called a beneficiary). The property itself is the
principal of the trust. When forming a living trust, the trustee and
grantor may be the same person.
The person or institution who manages trust
property under the terms of the trust document. With a revocable
living trust, the creators of the trust (grantors) are the original
Trust Corpus or Res:
Latin for the "property"
transferred to a trust.
The provisions in a trust document
defining what the trustee may and may not do.
A legal document in which a person directs what
is to be done with his or her property after death. It may also
designate guardians for your children. With some exceptions,
property passed by will must go through the probate process.
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