Chapter 19 vocab

adjusted gross estate

The gross estate minus debts and costs.

beneficiary

A person designated to receive something, such as life insurance proceeds, from the insured.

codicil

A document that modifies provisions in an existing will.

community property

Any property that has been acquired by either spouse during the marriage.

credit-shelter trust

A trust that allows married couples to leave everything to each other tax free

disclaimer trust

A trust designed for a couple who do not yet have enough assets to need a credit-shelter trust but may need one in the future.

durable power of attorney

A legal document authorizing someone to act on one’s behalf.

estate

Everything one owns.

estate planning

A definite plan for the administration and disposition of one’s property during one’s lifetime and at one’s death.

estate tax

A tax imposed on the value of a person’s property at the time of his or her death.

ethical will

A document that dispenses emotional and spiritual wealth to heirs.

executor

Appointed representative who ensures that your desires expressed in your will are carried out

exemption trust will

A will in which everything passes to the spouse except the exemption amount.

formal will

A will that is usually prepared with an attorney’s assistance.

gift tax

A federal and state tax on gifts to others.

guardian

A person who assumes responsibility for providing children with personal care and managing the deceased’s estate for them.

holographic will

A handwritten will.

inheritance tax

A tax levied on the value of property bequeathed by a deceased person.

intestate

Without a valid will.

irrevocable trust

A trust that cannot be altered or ended by its creator.

life insurance trust

A trust whose assets are derived at least in part from the proceeds of life insurance.

living trust

A trust that is created and provides benefits during the trustor’s lifetime.

living will

A document that enables an individual, while well, to express the intention that life be allowed to end if he or she becomes terminally ill.

prenuptial agreement

A documentary agreement between spouses before marriage.

probate

The legal procedure of proving a valid or invalid will.

revocable trust

A trust whose terms the trustor retains the rights to change.

simple will

A will that leaves everything to the spouse; also called an I love you will.

stated dollar amount will

A will that allows you to pass on to your spouse any amount that satisfies your family objectives

statutory will

A formal will on a preprinted form.

testamentary trust

A trust established by the creator’s will that becomes effective upon his or her death.

traditional marital share will

A will in which the grantor leaves one-half of the adjusted gross estate to the spouse.

trust

A legal agreement that provides for the management and control of assets by one party for the benefit of another.

trustee

A person or an institution that holds or manages property for the benefit of someone else under a trust agreement.

trustor

the creator of a trust; grantor

will

The legal declaration of a person’s mind as to the disposition of his or her property after death.