Estate Planning Terms and Definitions

Living Trust
Sometimes called an Inter-Vivos Trust--A written legal document established during a person's lifetime into which he/she places property.

Fiduciary
A person in whom one places great confidence in and upon whom one relies for his or her integrity, trust, and good faith. A fiduciary has the legal duty to act in the best interest and benefit of another and therefore is held to the very highest legal standards. A trustee is a fiduciary.

Trustee
A person or institution responsible for the management and distribution of property held in a Trust. The trustee has the authority to act according to the instructions provided in the trust agreement. See Fiduciary.

Estate
The total of all assets, all debts and other obligations of an individual. At the time of death the total amount of benefits (life insurance, annuity and retirement benefits) to be paid to beneficiaries are often also considered part of the estate for Federal Estate Tax purposes

Devise
A gift made by a will or a trust. A devise is made to a beneficiary under the terms of the will or trust.

Joint Tenancy
Property owned by two or more people in a manner such that upon death of one of the joint owners, all of his/her interest in the property is transferred immediately, by operation of law, to the other surviving owners.

Transfer Tax
The combined Federal Estate and Gift tax. A single exemption credit applies whether the property was transferred during a person's lifetime (gift tax) or is held by a person at the time of his/her death (estate tax).

Federal Estate Taxes
Taxes imposed by the US Government on the value of a person's estate upon his or her death.

Gain
The difference between the Tax Basis (the amount originally paid for property with certain adjustments) and the amount received for the property when it was sold.

Tenancy-in-Common
A form of ownership of property in which two or more persons share ownership (may be equal or unequal shares). At the death of a tenant-in-common, his/her share in the property transfers to his/her heirs, rather than to the other surviving owner(s). Compare with Joint Tenancy.