GLOSSARY

Note:  This glossary is general information for the public.  You should not rely on it for legal advice. Please consult with an attorney for your particular needs. 

The Van Nuys Law Office PLLC would be pleased if you would call us to schedule a private consultation.  We are conveniently located in Ballard where we serve the greater Seattle area.  Our phone number is (206) 784-9000.

A  -  E

A

ADMINISTRATION OF ESTATE:  The care and management of an estate by a trustee or a guardian.  This is different than the settlement of an estate by an executor or personal representative.

AGENT:  A person who acts for another by the latter’s authority.  The distinguishing characteristics of an agent are (1) that he or she acts on behalf of the principal (2) the agent does not own title to the property of the principal and (3) the agent has a duty to follow the principal’s instructions.

An account in which the title to the prop­erty constituting the agency does not pass to the trust institution but remains in the owner of the property, who is known as the principal, and in which the agent is charged with certain duties with respect to the property.

ANNUAL EXCLUSION:

The amount of property (presently $11,000, or $22,000 for a married couple) that may annually be given to a donee, regardless of the donee's relationship to the donor, free of gift tax.  Only gifts of present interests qualify for the annual exclusion.

ANNUITY:

The amount payable according to contract or trust annually or at other regular intervals for either a certain or an indefinite period, as for a stated number of years or for life.  An Annuitant is another name for the beneficiary of an annuity.

APPLICABLE EXCLUSION AMOUNT:

Sometimes referred to as the credit shelter amount or exemption equivalent.  This is the amount of taxable transfers that would generate federal gift or estate taxes in amount equal to the applicable unified credit.

APPLICABLE FEDERAL RATE:

The statutory interest rate that must be charged for most loans and Install­ment agreements to avoid imputation of income under the Internal Revenue Code.  

ASSET(S):

(1) The property of a deceased person sub­ject to the payments of his debts and gifts. (2) The property in a trust account.

ASSET PROTECTION TRUST:

An asset protection trust is a trust arrangement using the laws of a jurisdiction with favorable asset protection laws for such trusts.  This type of trust is commonly referred to as an “APT”.  APT’s organized under the laws of one of several domestic jurisdictions offering these laws are commonly known as Domestic Asset Protection Trusts.  APT’s organized under the laws of a foreign jurisdiction are frequently referred to as Foreign Asset Protection Trusts or FAPT. 

ASSIGNEE:

A person appointed by another or by the court to do some act or enjoy some right, privilege, or property

ASSIGNMENT:

The transfer in writing by one person to another of the title to personal property.  The assignment of stocks or registered bonds may be effected by filling in the form printed on the reverse of the certifi­cate or by the execution of a separate assignment form.

ASSIGNOR:

A person who makes a transfer of title or interest by writing.

ATTORNEY IN FACT:

An agent who is given written authorization by another to transact business for the other.  Usually done with a Power of Attorney.

B

BENEFICIARY:

(1) The person for whose benefit a trust is created. (2) The person to whom the amount of an insurance policy or annuity is payable.

BEQUEATH:

To give personal property by Will.  A Bequest if a gift of personal property by a will.  This is different than a devise.

BOOK VALUE:

The price at which assets are carried on a financial statement.  Also, the value of each share of common capital stock based on the values at which the assets of a corporation are carried on a balance sheet.  It is obtained by deducting liabilities from assets and dividing by the number of shares outstanding.

BUY-SELL AGREEMENT:

An agreement between owners of a business where they arrange to transfer their shares upon death or the occurrence of another event to the other owners or back to the business.  This is to provide continuous control and certainty of a business.

C

CAPITAL GAINS and LOSSES:

A computation for tax purposes that usually equals the difference between the purchase price and the sales price.

CHARITABLE BEQUEST:

A gift of personal property to a legal char­ity by Will.

CHARITABLE DEVISE:

A gift of real property to a legal charity by Will.

CHARITABLE LEAD (or Up-front) TRUST:

A trust for a fixed term of years where a charity is the Income beneficiary (of an annuity of a sum certain for a set term or for the life of a beneficiary or a unitrust payment of a fixed percentage of the trust assets paid annually) and the remainder goes to a non-charitable benefi­ciary.

CHARITABLE REMAINDER TRUST:

A trust arrangement where a remainder interest passes to a charity upon the termination or failure of a prior interest. (the remainder interest can be an annuity or unitrust)

CHARITABLE ANNUITY TRUST:

A trust which provides a sum of not less than five percent of initial fair market value of the principal, to be paid at least annually to a non-char­itable beneficiary, with the remaining principal paid to a charity.

CHARITABLE REMAINDER UNITRUST:

A trust which provides a fixed percentage, not less than five percent of net fair mar­ket value of the principal, valued annually, to be paid at least annually to a non­-charitable beneficiary, with the remaining principal paid to a charity.

CHARITABLE TRUST:

A trust created for the benefit of a legal charity.

CLASS GIFT:

A gift to members of the same class, for example, the class consisting of one’s grandchildren.

CODICIL:

An amendment of a Will executed with all the formalities of the Will itself.

COMMUNITY PROPERTY:

Property in which a husband and wife have each an undivided one-half Interest by reason of their marital status; recog­nized in all civil law countries, and in certain states of the US.

COMMUNITY TRUST OR FOUNDATION:

A trust or foundation funded by donations made by many people for educa­tional, charitable, or other benevolent pur­poses in a community.  The property is managed and distributed usually by a board of selected citizens.  There may be one trustee or, as is more often the case, several trustees (sometimes trust institutions of the community).

COMPLEX TRUST:

A trust in which the trustee is not required to distribute income currently, or distrib­utes amounts other than income, or makes a charitable contribution.

CONSERVATOR OR GUARDIAN:

Generally, an individual or insti­tution appointed by a court to care for property.  Specifically, an individual or institution appointed by a court to care for and manage the property of an incompetent person.  A guardian cares for and manages the prop­erty of a minor.

CONTINGENT BENEFICIARY:

A beneficiary whose interest is condi­tioned upon a future occurrence which may or may not take place. Unless or until the condition takes place the interest is only contingent.

CONTINGENT REMAINDER:

A future interest in property that is dependent upon the fulfillment of a condition before the termination of a prior interest in the property.

CONTINGENT TRUSTEE:

A trustee whose appointment is depend­ent upon the failure to act of the original or a successor trustee.

CORPUS:

The principal of an estate, as dis­tinguished from the income.

COST BASIS:

The original cost of property usu­ally based on the purchase price or, with few exceptions, in the case of property received from an estate, on the fair market value of the property at the death.

CREDIT SHELTER TRUST:

A trust that is usually utilized as part of an estate plan that is funded with the credit equivalent (formerly called unified credit) amount of a first spouse to die.  Such a trust is often used to provide benefits to a decedent's surviving spouse, while avoiding inclusion in that spouse's gross estate.  Property in the credit shelter trust can thus pass through to other beneficiaries with no estate taxes. This type of trust is also referred to as a ByPass Trust.

CREDITOR'S NOTICE:

In probate, the notice published stating the decedent's death and the name of the executor or personal representative to who claims should be presented for payment.  In some states a similar process is utilized to publish notice of a decedent who died and owned assets in a trust.

CRUMMEY POWER or CRUMMEY TRUST:

A limited power of withdrawal by a beneficiary over trust property that ordinarily lapses within a specified period of time.  Since property transferred to a trust may not otherwise create a present interest in a beneficiary, a Crummey power is used to create a present interest and secure an annual exclusion for the donor of the property, permitting trust management of the property for the ben­efit of the beneficiary as contrasted with an outright gift.

CUSTODIAN:

A person who has the duty to safeguard, conserve and account for property in his or her care as a result of circumstances causing property to be within their care or more commonly as a result of an appointment by a court to the duty.

D

DEATH TAXES:

Taxes imposed on property or on the trans­fer of property at the owner's death; a general term including estate taxes, inher­itance taxes, and all succession or transfer taxes connected with the death of the owner of the property.

DECLARATION OF TRUST:

An acknowledgement by one holding or taking title to property, that he holds the property in trust for the benefit of some­one else.

DEED OF TRUST:

A deed usually for real property conveying property to a trustee; usually used to secure a mortgage interest in real estate.

DEFECTIVE GRANTOR TRUST:

An irrevocable trust that is treated as a grantor trust for tax purposes; usually it is the creator of the trust or the grantor who wishes to have income of the trust taxed to themselves vice the higher trust tax rates.  In a few instances a trust is drafted so that the defective grantor trust rules will cause a beneficiary other than the original grantor to be taxed at their income tax rates.

DEFINED BENEFIT PLAN:

A pension plan which guarantees the pay­ment of a specified benefit at retirement age and provides for annual contributions equal to an actuarially determined amount that is sufficient to produce the specified benefit.  Typically these plans are governed by federal laws.  The primary governing federal laws being ERISA and the Internal Revenue Code section 412.

DEFINED CONTRIBUTION PLAN:

A pension plan which provides for an indi­vidual account for each participant and for benefits based upon the amount con­tributed to the participant's account including any income, expenses, gains, or losses.  Typically these plans are governed by federal laws.  The primary governing federal laws being ERISA and the Internal Revenue Code section 401.

DEVISE:

A gift of real property by Will; to be distin­guished from bequest.

DIRECT HEIR:

A person in the direct line of ascent or descent of the decedent; as, father, moth­er, son, daughter. 

DIRECT SKIP:

A generation skipping transfer either by gift or at death to someone (known as a “skip person”) who is two or more generations below the transferor.  Such a transfer may trigger a generation skipping transfer tax.

DISCLAIMER:

A refusal of any interest in or claim to the subject of the action, such as, renunciation of any title, claim, interest, estate, or trust.  Often done by an heir or beneficiary of an estate for estate planning or tax avoidance purposes.

DISCRETIONARY POWERS:

Powers which are left to the Judgment of the trustee under the terms of the trust.  Discretionary powers give the trustee the right, but not necessarily the duty, to per­form or omit certain actions.  Sometimes the discretionary powers are written with certain ascertainable limitations.

DISCRETIONARY TRUST:

A trust which entitles the beneficiary to only so much of the income or principal as the trustee in its controlled discretion shall give him or to apply for his use.

DISPOSITIVE PROVISIONS:

The provisions of a Will or trust regarding the disposition and distribution of the property in the estate or trust; to be distinguished from administrative provi­sions which relate to the handling of the property while It is In the hands of the executor or trustee.

DISTRIBUTABLE NET INCOME (DNI):

All income generated by a trust, less all deductible expenses paid by a trust whether charged against principal or Income.  This is a term used to determine the amount of income tax due from the trust or the beneficiaries, depending upon who is to be taxed on such income.

DISTRIBUTION STANDARD:

Trust provisions that set a standard for discretionary distributions of a trustee to a beneficiary.

DONEE:

One who receives a gift.

DONOR:

One who makes a gift.

DONOR ADVISED FUND:

An account with a community trust, foundation or charity that permits a donor to make gifts to the entity and direct where, when and to whom his or her gifts are distributed.  This avoids the need for a donor to create a private foundation in order to direct his or her gifts.

DURABLE POWER OF ATTORNEY:

A Power of Attorney that remains effec­tive after the disability or incompetence of the person granting the power. Typically, a person will give such a Power of Attorney providing that it becomes exercisable only upon his disability or incompetence, commonly referred to as a “springing durable power of attorney”.

E

ELECTING SMALL BUSINESS TRUST:

A trust that is eligible to own shares of Subchapter S corporations.

ELECTION:

The choice of an alternative right or course; for example, the right of a widow to take the share of her deceased husband's estate to which she is entitled under the law, despite a contrary provision in the Will, is known as the widow's election.

EMPLOYEE BENEFIT PLAN:

A plan established or maintained by an employer or employee organization, or both, for the purpose of providing employees a benefit, such as a pen­sion, profit-sharing, stock bonus, medical, dental, accident, or disability benefits.

EQUITABLE OWNERSHIP:

The interest of a person who has a beneficial right to enjoy property, the legal ownership of which is in another person or entity.  A person who holds this interest has “Equitable Title”.

ERISA:

An acronym for the Employee Retirement Income Security Act of 1974, which set up federal minimum standards for employee benefit plans.  The Act also established an insur­ance program designed to guarantee workers receipt of pension benefits if their defined benefit pension plan should termi­nate.

ESTATE:

(1) The right title, or interest which a per­son has in any property, to be distin­guished from the property itself which is the subject matter of the interest (2) The property of a decedent.

ESTATE FREEZE:

An estate planning strategy designed to prevent the value of an owner’s interest in appreciating property from increasing for federal estate tax purposes.

ESTATE PLAN:

A definite plan for the administration and disposition of one's property during one's lifetime and at one's death; usually set forth in a Will and one or more trust agreements.  It is also designed to minimize costs and taxes to one’s estate.

ESTATE TRUST:

A trust that is required to pay to a surviv­ing spouse or accumulate all of its income and whose property passes to the surviv­ing spouse's estate at his or her death.  The estate trust will qualify for the marital deduction and will be treated as a sepa­rate taxpayer for income tax purposes.

EXECUTOR:

An individual or a trust institution nomi­nated in a Will and appointed by a court to settle the estate of the testator. If a woman, she is an executrix.  Known in some states as a “Personal Representative”

NOTE:  The information provided herein is for general dissemination and not intended as legal advice or for use in a particular situation.  Please contact our office or other qualified attorney.  The Van Nuys Law Office PLLC is conveniently located in Ballard.  Our phone number is (206) 784-9000.

F – J

F

FAMILY LIMITED PARTNERSHIP:

A limited partnership that is used to manage family investments.  Useful for passing interests to other family members and possibly receiving discounts for estate tax purposes.  If setup and managed properly these can also provide asset protection for a family’s wealth.

FIDUCIARY:

An individual or a trust institution that has a duty to act for the benefit of another party as to matters coming within the scope of the relationship between them.  Examples of some fiduciary relationships include a guardian and his ward, an agent and his principal, an attorney and his client, one partner and another partner, a trustee and a beneficiary.

FIDUCIARY RETURN:

An income tax return prepared by a fiduci­ary on behalf of a trust or estate.

"FIVE BY FIVE" POWER:

A non-cumulative general power of a beneficiary or donee to appoint in each calendar year the greater of $5,000 or five percent of the value of the trust at the end of the year.

FORMULA CLAUSE:

The provision of a Will or trust agreement stating a formula whereby the executor or trustee can determine the federal estate tax value of property in order to divide an estate to minimize taxes.  It is usually employed in connection with the unlimited marital deduction and credit equivalent amounts.

FOUNDATION:

A permanent corpus established and managed for charitable, educational, religious or other benevolent uses and purposes.

FUNDED INSURANCE TRUST:

An insurance trust in which, in addition to life insurance policies, cash and securities have been placed in trust to provide suffi­cient income for the payment of premiums and other charges on or assessments against the insurance policies.

G

GENERAL POWER OF APPOINTMENT:

The power of the donee or beneficiary (the one who is given the power) to pass on an interest in property to whomsoever he pleases, including himself or his estate. See also Power of Appointment.

GENERATION-SKIPPING TAX:

A tax imposed on any generation-skipping transfer at a flat rate computed with refer­ence to the maximum federal estate rate applicable at the time of the transfer.

GENERATION-SKIPPING TRANSFER:

Any taxable distribution or taxable termi­nation with respect to a generation-skip­ping trust or any direct

skip from a trans­feror.

GENERATION-SKIPPING TRUST:

Any trust having beneficiaries who belong to two or more generations younger than the grantor.

GIFT TAX:

A tax imposed by the federal government since 1932 and by some states on trans­fers of property by gift during the donor's lifetime. Gifts, under this law, may include irrevocable living trusts.

GRANTEE:

A person to whom property is transferred by deed or to whom property rights are granted by means of a trust instrument or some other document.

GRANTOR:

A person who transfers property by deed or who grants property rights by means of a trust instrument or some other docu­ment.

GRANTOR RETAINED ANNUITY TRUST:

The grantor retains the right to a set annual dollar amount (the annuity) for a fixed term and gives the principal to others, including relatives, at the end of that term. If the grantor survives until the end of the annu­ity term, all of the trust principal will be excluded from the grantor's estate for death tax purposes.  Sometimes referred to as a "GRAT”.

GRANTOR RETAINED INCOME TRUST:

The grantor retains the right to all of the trust income for a fixed term and gives the principal to others, including relatives, at the end of that term. If the grantor survives until the end of the income term, all of the trust principal will be excluded from the grantor's estate for death tax purposes. A grantor retained income trust is often referred to as a "GRIT”.

GRANTOR RETAINED UNITRUST:

The grantor retains a right to receive a yearly amount equal to a fixed percentage of the value of the trust principal and gives the principal to others at the end of the term.  If the grantor survives until the end of the term all of the principal will be excluded from the grantor’s estate for estate tax purposes.  Referred to as a “GRUT” and is a variation of the GRAT.

GRANTOR TRUST:

For purposes of the income taxation of trusts and estates, a trust in which the grantor or a third party

is treated as the owner of the trust and taxed on the income at their own individual income tax rate.  A grantor trust is not treated as a separate entity for income tax purposes.  Usually seen with Revocable Living Trusts and Defective Grantor Trusts.

GROSS ESTATE:

All of a decedent’s property before debts, taxes, and other expenses or liabilities have been deducted; to be distinguished from net estate which is what is left after these items have been taken into account.

GST EXEMPTION:

An exemption for generation skipping transfers from generation-skipping tax equal to the applicable exclusion amount in the aggregate for transfers by an individual either during life or at death.

GUARDIAN:

An individual or institution appoint­ed by a court to care for the property or the person (or both) of a minor or an incompetent person.

GUARDIAN AD LITEM:

A person appointed by a court to repre­sent and defend a minor or an incompe­tent person in connection with court pro­ceedings, sometimes called a special guardian.

H

HEIR:

A person who inherits real property; to be distinguished from next of kin and from distributee.

HOLOGRAPHIC WILL:

A handwritten Will of the testator.  Usually presents problems during the probate process.

I

IMMEDIATE BENEFICIARY (Present Beneficiary, Primary Beneficiary):

A beneficiary of a trust who is entitled to receive immediate benefits from the trust property, whether or not limited to Income.

INCENTIVE STOCK OPTION:

A bonus or profit-sharing arrangement designed to attract or retain key employ­ees which allows employees to pur­chase stock of the employer at less than market price; the number of shares which an employee may purchase is often tied to specific performance objectives.

INCOME:

The returns from property, such as rent, interest, dividends, profits, and royalties; different than corpus, principal or capital.

INCOME BENEFICIARY:

The beneficiary who is entitled to receive the income from a trust

INCOME IN RESPECT OF A DECEDENT (“IRD”):

Income that the decedent had a right to receive at the time of his or her death.  The same income tax consequences apply in the hands of the decedent’s estate.

INDEPENDENT EXECUTOR:

An executor of a Will who, after filing his inventory, does not make further account­ing to the probate court; Often called Executor with non-intervention powers.

INDIVIDUAL RETIREMENT ACCOUNT ("IRA"):

A retirement savings program for individu­als to which yearly contri­butions up to a specified limit can be made that are either tax deductible (traditional IRA) or not deductible (Roth IRA). The amounts contributed to a traditional IRA are not taxed until withdrawal. The amounts contributed to a Roth IRA are withdrawn free of income tax.  In either case withdrawal is not permitted, without penalty, until the indi­vidual reaches age 59-1/2.

INHERITANCE TAX:

A state tax on the right to receive property by inheritance; to be distinguished from an estate tax

INHERITANCE TAX RETURN:

The return that the executor or personal representative is required to make to the state on the basis of which the inheritance tax due the state is calculated and paid; different from the federal estate tax return.

IN LOCO PARENTIS (In the place of a par­ent):

A phrase meaning a person who takes the place of a child's parent, usually one who is not a legally appointed guardian.  Parents may use a legal document to temporarily assign this power to another for the care of their child.  It can be used for things such as acquiring medical treatment, registering a child for school and other necessary administrative matters.

INSURANCE TRUST:

A trust composed partly or wholly of life Insurance policy contracts.  Often used to remove the death benefit from a decedent’s estate.

INTANGIBLE PROPERTY:

Property which cannot be touched nor realized with the senses, such as a legally enforceable right. The right possessed by the holder of a promissory note, a bond, a stock certificate, a patent, a copyright, or a trademark is intangible property, a paper writing or governmental registration being evidence of that right.

IN TERROREM CLAUSE:

A provision of a Will or trust agreement intended or, at any rate, designed to intimidate a potential beneficiary from contesting the provisions of a Will or trust.

INTER VIVOS GIFT:

A gift of property by one living person to another. To make such a gift effective, there must be actual delivery of the prop­erty during the lifetime of the donor and without reference to his death.

INTER VIVOS TRUST:

A trust created during the settlor or grantor’s lifetime; the same as a living trust; different than a trust created in a will called a testamen­tary trust.

INTESTACY:

The condition resulting from a person's dying without leaving a valid Will.

INTESTATE:

(adjective) (1) Without having made and left a valid Will. (2) Not devised or bequeathed; not disposed of by Will. (3) (noun) A person who dies intestate.

INTESTATE SUCCESSION:

The state law mandated descent and distribution of property of a person who dies without a valid Will.  The statute usually provides for a surviving spouse first, if no surviving spouse then surviving children, if no surviving children then surviving parents, if no surviving parents then surviving siblings.  Each state’s law varies.

IRREVOCABLE TRUST:

A trust which by its terms (1) cannot be revoked by the settlor or (2) can be termi­nated by him only with the consent of someone who has an adverse interest in the trust, someone to whose Interest it would be for the trust not to be terminated, such as a beneficiary;

ISSUE:

All persons who descended from a com­mon ancestor; a broader term than chil­dren.

J

JOINT AND SURVIVORSHIP:

A phrase usually applied to annuities under which during the lifetime of both husband and wife, they are joint benefici­aries of the annuity and, after the death of either, the survivor becomes the sole ben­eficiary.

JOINT TENANCY:

The holding of property by two or more persons and upon the death of one of them the other or others own the property by operation of law.  Distinguished from tenancy by the entirety or tenancy in common.

JOINT TRUST:

A trust usually created by a husband and wife that contains provisions of the disposition of their joint estate upon their deaths.  Both joint and separate property may be contributed.  Commonly used in community property states.

NOTE:  The information provided herein is for general dissemination and not intended as legal advice or for use in a particular situation.  Please contact our office or other qualified attorney.  We serve the greater Seattle area from the heart of Ballard.  Our phone number is (206) 784-9000.

K – O

K

KEY MAN INSURANCE:

Insurance purchased for the protection of a business from the financial loss caused by death or disability of a vital member of the firm.

KIDDIE TAX:

A tax on the unearned income of a minor child who has not reached the age fourteen before the close of the taxable year and who has at least one living parent, under which all unearned income exceeding a certain minimum amount will be taxed to the child at the parent's marginal tax rate.

L

LACK OF MARKETABILITY DISCOUNT:

A discount that is frequently applied to units or interests in closely held entities such as limited partnerships, limited liability companies or corporations due to the restrictions placed on the transfer of those interests or the lack of a market for those interests.

LAND TRUST:

An unincorporated association for holding real property by putting the title in one or more trustees for the benefit of the members whose interests are evidenced by certificates or copies of the trust documents.

LAPSE:

The falling of a gift into the residuary estate by reason of the death of the donee or beneficiary during the testator's lifetime.

LAST WILL AND TESTAMENT:

A legally enforceable declaration of a person's wishes regarding matters after his or her death and not operative until death; usually but not always relating to property; revocable (or amendable by means of a codicil) up to the time of death or loss of mental capacity to make a valid Will.

LEGACY:

A gift of personal property by Will; the same as a bequest.  A person receiving such a gift is called a legatee.

LEGAL CHARITY:

One that comes within the legal definition of a charity.  Not automatically a 501(c)(3) for federal tax purposes.

LETTERS OF CONSERVATORSHIP OR GUARDIANSHIP:

A certificate of authority issued by the court to an individual or corporate fiduciary to serve as conservator or guardian of the property of a person.

LETTERS TESTAMENTARY:

A certificate of authority to settle a particular estate issued by the appointing court to the executor named in the Will; to be distinguished from letters of administra­tion.

LIEN:

An encumbrance on property-as to secure the payment of money.

LIFE BENEFICIARY OR LIFE INTEREST:

The beneficiary of a trust usually for the term of his own life, but it may be for the life of some other person.  Life interest is the estate or interest that a person has in property that will endure only during his own or someone else's lifetime.

LIFE TENANT:

One who owns an estate in real property for his own life or for another person's life or for an indefinite period limited by a life­time.

LIMITED GUARDIANSHIP:

Some states have created a limited guardianship which allows a partially disabled or incompetent person to delegate limited powers and authority to the limited guardian.

LIMITED POWER OF APPOINTMENT:

A power of the donee (the one who has the power) to pass on an interest in property that is limited in some way-as to or for whom or to the time within which he must exercise the power; also known as special power; the opposite of general power of appointment; all powers that are not general are special or limited powers.

LIVING TRUST:

A trust that becomes operative during the lifetime of the settler (Grantor); as opposed to a trust under will. The same as a trust inter vivos.

LIVING WILL:

A document which allows a person to state In advance his or her wishes regarding the use or removal of life-sustaining or death-delaying procedures in the event of a terminal illness or injury.

M

MARITAL DEDUCTION:

The portion of a decedent's estate that may be given to the surviving wife or husband without its becoming subject to the federal estate tax levied against the decedent's estate; a term that came into general use under the Internal Revenue Act of 1954.

MARITAL PROPERTY:

A term generally referring to property acquired by either spouse during the course of the marriage, in which each spouse possesses an interest in the event of death or marital dissolution

MARITAL RIGHTS:

The rights that a husband and wife have in each other's property.

MARKETABLE TlTLE:

A title which a reasonably prudent person, knowing all the facts, regards and accepts as good.

MASSACHUSETTS TRUST:

An unincorporated organization created for profit under a written instrument or declaration of trust, by the terms of which the property held in trust is managed by compensated trustees for the benefit of persons whose legal interests are represented by transferable certificates of participation or shares; also called business trust.

MINOR:

A person under legal age, that is, under the age at which he or she is accorded legal rights.