Defined terms from estate, trust and tax law, with where each arises for owners of businesses, real estate and private investments.
Each entry opens with a definition, then explains how the term operates and where it is commonly confused.
Understand abatement when an estate cannot cover every gift. See South Carolina and Michigan priorities, exceptions, related terms and questions to ask next.
Understand ABLE account ownership, eligibility, disability expenses and SSI protections, plus who can open an account and what to review before contributing.
Learn how an accumulation trust retains retirement account distributions, which beneficiaries count, and how trust income taxation affects planning decisions.
Understand adjusted tax basis, purchase costs, improvements and depreciation, plus how gifts, inherited property and trust distributions affect basis records.
Understand the annual gift tax exclusion, present interests, gifts in trust and Form 709, with questions for gifts of cash, business interests and property.
Colorado law uses those subjects to define the standard. An ascertainable standard defines the purposes for which a trustee may distribute trust assets.
Practitioners note that agreements commonly identify death, disability, retirement, divorce, and attempted impermissible transfer as possible triggers.
A catalogue of electronic communications is a listing of a deceased user's electronic communications held by a custodian, separate from their contents.
A charitable lead trust pays an income interest to charity for a term or a named person's lifetime, then transfers the remainder to a noncharitable beneficiary.
For owners of businesses, real estate and private investments, the trust has a private interest that provides a stream of payments and a charitable remainder.
Learn what a codicil changes, how Minnesota treats a later will, and why revoking an amendment may or may not revive earlier instructions. Plan your review.
In community property states, an asset's location alone may not determine its classification. California's community property rules require California domicile.
Understand conduit trust payout requirements, beneficiary rules, successor deadlines, income taxes and creditor limits before naming a trust as IRA beneficiary.
A conservatorship of the estate concerns assets or income in Wisconsin. Voluntary applications and court appointments have different stated bases. Free guide.
Surviving owners then purchase the deceased owner's shares using proceeds paid directly to them. A corporate redemption differs from a cross-purchase on basis.
Learn how Crummey withdrawal powers relate to trust gifts, enforceable present interests, annual gift tax exclusions, power lapses and separate GST concerns.
What is a custodian for digital assets? Learn the Minnesota definition, how it differs from a fiduciary, and what to ask about account access and disclosure.
Understand deceased spousal unused exclusion (DSUE): its calculation, portability election, filing timetable, gift order and rules for a surviving spouse.
Understand what a digital asset means, how state definitions distinguish records from devices, and where to start organizing accounts for your estate plan.
Learn what distributable net income means, how it limits trust distribution deductions, and where beneficiaries find the income amounts they need to report.
Family location, business activity and living accommodations are among the objective facts practitioners describe as relevant to a domicile of choice.
A donor-advised fund is not a charitable account that the donor can reclaim. Practitioners regard contributions as irrevocable and directed to charity.
For owners of businesses, real estate and private investments, it can cover specified financial activities. State rules define durability in different terms.
The Tennessee Uniform Trust Code applies that obligation to investing, managing and distributing. Impartial treatment and equal treatment are different ideas.
The duty of loyalty directs a trustee to put the beneficiaries' interests first in every decision about trust property. Loyalty and prudence are also separate.
Understand elective share rights for a surviving spouse, with state examples covering percentages, property counted, offsets, and questions for your review.
An employee stock ownership plan (ESOP) is a federally regulated retirement plan in which a trustee holds company shares in trust. An ESOP centers on a trust.
Equal distributions give each beneficiary the same dollar amount. Practitioners note that equal treatment may prevent continued operation of the farm or ranch.
Delaware law requires executors and administrators to account to the Court of Chancery every year until the estate closes and a final account is passed.
An estate tax cliff is a feature of a state estate tax in which an estate that goes slightly over the stated exemption amount has its entire value taxed.
An exculpatory clause sets limits on trustee liability within the trust instrument. Some conduct falls outside those limits under the laws of particular states.
Understand fair market value for estate and gift taxes, including valuation dates, business interests, real estate, reporting records and common pricing errors.
Governance procedures can also include a vision, mission, strategic plan, board assessment, outside directors, and conflict of interest and ethics policies.
A family limited partnership (FLP) is a partnership that pools assets, consolidates management and creates a business relationship with beneficiaries.
Understand first party special needs trusts, whose assets they hold, Medicaid repayment requirements, and how trust payments can affect SSI for a beneficiary.
For owners of businesses, real estate and private investments, the term describes limits on who may receive assets at death in some civil-law systems.
A grantor retained annuity trust, or GRAT, is an irrevocable trust into which an owner transfers a business interest in exchange for an annuity for a term.
Understand grantor trust income tax ownership, revocation powers and reporting, with related terms and resources to prepare questions for your trust advisers.
Understand what a gross estate includes, how property is valued, and why mortgages, joint ownership and life insurance deserve a closer look in your review.
Learn what the GST inclusion ratio measures, how exemption allocation and trust timing affect it, and which records help trustees review GST tax questions.
A health care power of attorney authorizes someone to make medical decisions for a person unable to make them. A living will records treatment preferences.
For owners of businesses, real estate and private investments, the term can describe how estate assets are allocated among people entitled to receive them.
The term concerns policy rights. Applicable state or other law can affect the policy terms used to determine whether a decedent held incidents of ownership.
Understand how the income distribution deduction works for estates and trusts, including DNI limits, required distributions and beneficiary reporting rules.
Learn what income in respect of a decedent means, how the accounting method affects it, and how unpaid fees, IRA distributions and installment obligations fit.
Understand intestacy, Minnesota spouse and heir rules, survival requirements, and estate administration, with related terms and resources for your next steps.
Practitioners describe some insureds facing a possible federal estate tax problem as using an ILIT to own a policy, with the trust named as beneficiary.
An irrevocable trust can give beneficiaries access under its terms. Irrevocable trusts can hold assets for beneficiaries or manage property across generations.
For owners of businesses, real estate and private investments, the clients may include spouses, unmarried partners, a family business or adult children.
Learn what joint tenancy with right of survivorship means, how account terms and state law affect transfers, and how the gift and basis rules apply to owners.
Practitioners describe marketability and control as factors supporting lower values for closely held interests than comparable publicly traded interests.
A life estate gives one person the right to use or possess property for that person's lifetime, while another person holds a future interest in the property.
A living will is a document that records a person's preferences about medical care and treatment. A living will records desired medical care and treatments.
Learn how the marital deduction works for property passing to a spouse, including trust exceptions, citizenship requirements, valuation and estate reporting.
Passive rent collection, advancing capital, or reviewing plans and reports alone is insufficient. Indirectly owned real property has an additional condition.
A modified endowment contract (MEC) is a life insurance contract that uses last-in first-out accounting mirroring annuity taxation, with gains withdrawn first.
Whether the clause is enforced depends on state law, and the processes for contesting a will vary by state. The processes for contesting a will vary by state.
A nonjudicial settlement agreement (NJSA) is a binding agreement that Georgia allows in will matters. Colorado practitioners describe a pre-mortem version.
Learn what a nonprobate asset is, how account and trust arrangements work, and why passing outside probate does not settle every court or estate tax question.
An online tool is a feature offered by a digital account custodian that lets a user direct whether information may be disclosed after the user's death.
Maryland probate includes managing estate property, handling expenses and claims, and distributing property to heirs. The will can name a representative.
Learn how pooled special needs trusts work, who can establish an account, and why SSI treatment, transfer penalties and Medicaid repayment need separate review.
Explore pour over wills through a Minnesota example, including trust identification, amendments, estate obligations and capacity, with guides and primary law.
Arizona law characterizes a trustee's exercise of a power to appoint trust property under the relevant subsection as exercising a special power of appointment.
Private keys matter when cryptocurrency is part of an owner's private investments or otherwise forms part of assets a fiduciary or successor may need to access.
Alaska law makes a will penalty clause unenforceable when probable cause exists for proceedings challenging the will or otherwise relating to the estate.
Understand probate and estate administration through a Minnesota example, including property at death, court involvement, related terms and next steps.
The inventory gives the personal representative a baseline for estate property. Maine inventories include date-of-death fair market values and encumbrances.
The rule evaluates investment decisions in the context of the trust's overall portfolio and strategy. The rule's details depend on state law and trust terms.
Learn what QTIP means, the qualifying income interest for a spouse, estate and gift tax elections, partial elections, and reverse QTIP reporting requirements.
A qualified appraisal is an appraisal of contributed property that meets federal requirements for preparation, signature, date, and appraiser qualifications.
Official guidance describes it as nontaxable. Official guidance describes the recipient condition as eligibility to receive tax-deductible contributions.
A QDOT has trustee and distribution controls. Federal estate tax may apply to later principal distributions or at the surviving spouse's death. Free guide.
A qualified heir is a person who receives qualified real property from an estate and meets the conditions for special use valuation under section 2032A.
Understand the required beginning date for IRA withdrawals, how workplace plans differ, and what to review about first distributions and beneficiary timing.
New York treats an irrevocable trust as a New York resident trust when it holds property transferred by a person domiciled in New York at the time of transfer.
A residuary bequest is a gift of the portion of an estate that remains after expenses, creditor payments and specific bequests or devises are covered.
Understand Minnesota digital asset access rules, how account directions affect disclosure, and what trustees and conservators need before requesting access.
A revocable trust is a trust that its settlor can revoke. The trust controls property it owns, so transferring property into it is part of the arrangement.
The executor makes the election for the tax attributable to that interest. The executor attaches a notice of election to a timely filed estate tax return.
Understand see through trust requirements for retirement beneficiaries, the IRA documentation exception, and how conduit and accumulation trusts differ.
Under section 2032A, an executor may elect to value qualified real property used as a farm or in another trade or business at its qualified-use value.
The term appears in state trust laws, though the stated requirements differ. Missouri recognizes a provision that restrains either kind of transfer, or both.
Recovery may come from the contract's proceeds or be secured by those proceeds. Split-dollar describes an arrangement between a policy owner and a non-owner.
For owners of businesses, real estate and private investments, the condition sets when another person can handle financial matters under the document.
The schedules describe different starting points and distribution portions. Practitioners describe delayed distributions in percentages and intervals.
Owners of businesses, real estate and private investments, along with their spouses, meet the difference through state estate tax exemptions that vary by state.
In New York, the return attachment is a pro-forma federal estate tax return. A federal QTIP election and a state-only QTIP election are distinct in Minnesota.
Understand step up in basis for qualifying inherited property, including valuation rules, lifetime gifts, spousal ownership, exceptions and basis records.
Learn what a successor beneficiary inherits, which retirement account payout deadline continues, and when annual distributions and spouse exceptions matter.
Supported decision-making is a voluntary arrangement in which a person with a disability keeps decision-making authority while receiving help from others.
Practitioners describe it as a comparison between the trust's actual condition and what that condition would have been under compliant administration.
The relevant place may depend on the property type, its physical location, the owner's domicile, or the trustee's domicile, depending on the rule described.
The term applies to owners of businesses, real estate and private investments who sign wills, and to the spouses and adult children who may read those wills.
Understand third party special needs trusts, whose assets fund them, SSI control and payment rules, and questions to ask before leaving an inheritance in trust.
Understand TOD and POD beneficiary designations for securities, bank accounts and real estate, with state examples on ownership, wills and beneficiary survival.
Trust accounting income is income set by a trust's governing instrument and local law. See how it differs from taxable income and DNI, and why that matters.
Changing the terms is a separate matter from changing who the beneficiaries are, and practitioners note that decanting generally cannot add beneficiaries.
The trustee and the trust director then act as two separate roles under one trust. Practitioners describe an exchange of information between the two roles.
A revocable living trust controls assets it owns, and trustee authority covers property transferred to it. Accounts may be transferred or property retitled.
The scope depends on the trust's terms and state law. A trust protector and a trustee are distinct roles when the trust assigns them different authorities.
For a nonresident decedent who is not a U.S. citizen, the gross estate for federal estate tax purposes includes property situated in the United States at death.
Estate planning practitioners describe undue influence as severe pressure that causes an elder to replace their own intent with that of the wrongdoer.
