GLOSSARY FOR ESTATE PLANNING AND ADVANCE DIRECTIVES
annual exclusion gift – the amount that can be gifted to each of any number of persons in a calendar year without the gift being a taxable gift
applicable exclusion amount – the amount below which an estate is exempt from gift and estate tax
beneficiary – a person who receives a benefit through designation in a will, or by being named in a designation filed with respect to a bank account, brokerage account, life insurance policy, annuity contract, pension plan, retirement plan or account, or other asset
by representation- one of several methods of distributing a share of an estate to descendants (issue) of a predeceased beneficiary
charitable deduction – a deduction allowed in computing gift tax or estate tax for the value of property transferred to a charitable organization
credit shelter trust – a trust which is funded by the first spouse to die with an amount that would pass free of estate tax, so that the trust property does not count in the estate of the second spouse to die
designated beneficiary – an individual (or certain types of trusts) named as a beneficiary of a retirement plan that conforms to requirements of the Internal Revenue Code; such an individual will be eligible to withdraw his/her inheritance from the plan over a life expectancy period in minimum required distributions
designation of guardian – the document wherein you set forth whom you want to be
- your guardian for personal needs and/or property management if the court were to appoint a guardian for you, OR
- the guardian of the person and/or property of your minor child, OR
- the guardian of the person and/or property of your intellectually or developmentally disabled child
disposition – a transfer of property by gift or will
estate tax – a tax on the value of the property transferred to others upon the death of a person
executor – the person nominated by a testator/testarix in his/her will to administer his/her estate
general disposition – the gift in a will of a sum certain of money
gift – a transfer of property to or for the benefit of someone else for which no payment is received
gift tax – a tax on the value of property gifted away by a person during his/her lifetime
guardian – the person appointed by a court to oversee
- your life and your lifestyle needs if you are incapacitated (guardian for personal needs), and/or to conduct your financial affairs if you are incapacitated (guardian for property management), OR
- the life and lifestyle of a minor child (guardian of the person) and/or to conduct the child’s financial affairs (guardian of the property), OR
- the life and lifestyle of a person who is intellectually or developmentally disabled (guardian of the person) and/or to conduct the person’s financial affairs (guardian of the property)
health care agent – the person appointed in a health care proxy to make health care decisions for a person who is incapacitated
health care proxy – a document whereby you, as the principal, give to another person, the health care agent, the authority to make health care decisions for you if you are incapacitated
health care surrogate – the person who would have the authority under the New York Family Health Care Decisions Act to make health care decisions for you if you are incapacitated and are in a hospital or nursing home, if there is no health care agent or guardian for personal needs who has been granted health care decision-making authority
HIPAA – the federal Health Insurance Portability and Accountability Act. It protects the privacy of medical information concerning a patient. A health care agent has access to such information to the extent that it is necessary for the agent to make a health care decision. An agent under a power of attorney does not have such access unless the princial explicitly authorizes such access in writing.
issue – direct descendants
join tenant – one of the owners of property titled in a joint tenancy
living will – a document in which you express your wishes concerning the medical care you would and would not desire if you were to be unable to express those wishes due to a medical condition
marital deduction – a deduction allowed in computing gift tax or estate tax for the value of property transferred either to the spouse of the person making the transfer or to a QTIP trust for the benefit of the spouse
non-probate asset – an asset of a person that passes on his/her death by right of survivorship of a joint owner or by a beneficiary designation
non-probate estate – a person’s non-probate assets
per capita – one of several methods of distributing a share of an estate to descendants (issue) of a predeceased beneficiary
per stirpes – one of several methods of distributing a share of an estate to descendants (issue) of a predeceased beneficiary
power of attorney – a document whereby you, as the principal, give to one or more other persons, the agent(s), authority to conduct the financial affairs of yours that you specify in the document
power of attorney agent – the person appointed by you in a power of attorney to conduct the financial affairs of yours that you specify
principal – the person who appoints an agent
probate – the determination by the Surrogate’s Court that a document is a valid will
probate asset – an asset that is titled in a person’s sole name, without a beneficiary named
probate estate – a person’s probate assets, the distribution of which is governed by his/her will if he/she dies testate, or by the laws of intestacy if he/she dies intestate
qualified retirement plan – a retirement plan that conforms to requirements of the Internal Revenue Code (Examples: 401(k), 403(b), 457 Plans); under which plan the employee is eligible to withdraw the balance over his/her life expectancy in minimum required distributions, and his/her designated beneficiaries will be eligible to withdraw their inheritances from the plan over a life expectancy period in minimum required distributions
QTIP trust – a trust for the benefit of the spouse that qualifies for the marital deduction for gift tax and estate tax purposes
residuary disposition – a gift under a will of all or a percentage of the residuary estate
residuary estate – what is left in an estate after payment of funeral expenses, expenses of administration, taxes, debts of the decedent, and after distribution of specific dispositions and general dispositions
right of survivorship – the right of a surviving joint tenant or a beneficiary to inherit a non-probate asset from the deceased owner
specific disposition – a gift under a will of a specific item of property
statutory gifts rider – a separate document that is required to be appended to a power of attorney if you, the principal, give the power of attorney agent authority to engage in specified transactions that redound to the benefit of the agent or of any person other than you
taxable gift – the amount gifted to any person, in excess of the annual exclusion gift amount, in any calendar year
testamentary beneficiary – a person who receives a disposition under a will
testator/testatrix – the male/female person who makes a will
trust – an entity created by a person, structured to achieve a particular objective, whereby legal title to assets is transferred to a trustee, who administers the trust for a period of time, for the benefit of named beneficiaries and ultimately distributes the trust to named beneficiaries
trustee – the person appointed by the creator of a trust to administer the trust
will – a written document, which is signed in the manner prescribed by statute and which is the knowing, voluntary act of the testator/testatrix, in which he/she directs how his probate estate is to be administered and distributed.
I encourage you to also examine the Glossary for Estate Administration.