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Giving to Rush Glossary of Gift Planning Terms

The following guide explains some commonly used gift, estate and financial planning terms.

Administrator
The person appointed by the court to manage one's estate when he or she dies without leaving a will. Administrators have the same duties as executors

Annuity
A sum of money payable yearly or at other regular intervals

Appreciated Property
Property, such as real estate or stock, which has increased in value

Beneficiary
An individual designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

Bequest
A gift or legacy left by will or through a trust, typically personal property or assets

Charitable Gift Annuity
Typically an agreement in which you transfer cash or other assets to a charitable organization in exchange for its promise to pay you a fixed annuity for a period of years or life

Charitable Trust
A trust having one or more charitable organizations as beneficiary

Charitable Lead Trust (CLT)
An irrevocable trust where income is paid to charity for a fixed number of years, and then to named individual beneficiaries

Charitable Remainder Trust (CRT)
An irrevocable trust naming individual beneficiaries for life, and one or more qualifying charities, as recipients of the remainder upon the last to die of the individual beneficiaries; IRS-qualified CRTs include Charitable Remainder Unitrusts (CRUTs), the Charitable Remainder Annuity Trust (CRAT), and the Charitable Lead Trust (CLT)

Codicil
A legal instrument made to modify an earlier will

Corporate Fiduciary
An institution that acts for the benefit of another; one example is a bank acting as trustee

Cost Basis
The original value of an asset, such as stock, before its appreciation or depreciation

Durable Power of Attorney
A written legal document that lets an individual designate another person to act on his or her behalf, usually in the event the individual becomes disabled or incapacitated

Estate Tax
A tax imposed at one's death on the transfer of most types of property; charitable bequests are typically excluded from estate tax

Executor (or Personal Representative)
The person named in a will or trust to manage the estate. This person will collect the property and pay any debts, taxes and expenses, then distribute property or assets according to the will or trust document.

Fiduciary
A person or institution legally responsible for the management, investment and distribution of funds; examples include trustees, executors and administrators

Gift Tax
Tax on gifts to individuals generally paid by the person making the gift, rather than the recipient

Gift-Tax Annual Exclusion
The provision in the tax law that exempts from federal gift taxes in 2009 the first $13,000 (adjusted periodically for inflation) in present-interest gifts a person may choose to make to an unlimited number of individual recipients during any given tax year

Grantor
The person who transfers assets into a trust for the benefit of him/herself or others

Gross Estate
The total property or assets held by an individual as defined for federal estate tax purposes

Guardian
An individual legally appointed to manage the rights and/or property of a person incapable of taking care of his or her own affairs

Illiquid
Not liquid; typically refers to property that is unmarketable, difficult to sell, or carries specific restrictions

Inter vivos Trust
A type of trust created during one's lifetime to hold property for the benefit of him/herself or another person

Interest
Any right or ownership in property

Intestate
The term applied when an individual dies without a will

Joint Ownership
The ownership of property by two or more people, usually with the right of survivorship

Life Insurance Trust
A trust that has an individual's life insurance policy as its principal asset

Living Trust (Revocable)
A revocable trust established by a grantor during his or her lifetime in which the grantor transfers some or all of his or her property into the trust

Living Will
A legal document directing that the maker's or signer's life is not to be artificially supported in the event of a terminal illness or accident

Marital Deduction
A deduction allowing for the unlimited transfer of any or all property from one spouse to the other, generally free of estate and gift tax

Power of Attorney
A written legal document that gives an individual the authority to act for another

Powers of Appointment
A right given to another in a written instrument, such as a will or trust, which allows the other to decide how to distribute the property; the power of appointment is "general" if it places no restrictions on whom the distributees may be, and power is "limited" or "special" if it limits who the eventual distributees can be

Probate
The court process for determining the validity of a deceased person's will, thereby authorizing the collection of assets, payment of debts/expenses/taxes, and the distribution of bequests

Testamentary Trust
A trust that is created upon death by the terms of a person's will or living trust

Testator
An individual who dies leaving a will or testament in force

Trust
A written legal instrument created by a grantor for the benefit of him/herself (during life) or others (during life or at death)

Trustee
The individual or institution entrusted with the duty of managing property placed in the trust. A "co-trustee" serves as trustee with another. A "contingent trustee" becomes trustee upon the occurrence of a specified future event

Unified Credit
A federal tax credit that offsets gift tax and estate tax liability. For gift tax purposes, the unified credit remains at $345,800 through 2009, which is equivalent to an applicable exclusion amount of $1 million; for estate tax purposes, the unified credit is $1,455,800 in 2009, which is equivalent to an applicable exclusion amount of $3.5 million in 2009

Unitrust (see Charitable Remainder Trust)
Generally the most popular and flexible type of charitable remainder trust

Will
A legally executed document that directs how and to whom a person's property is to be distributed after death

For more information about planned giving, please contact John Lowenberg, vice president of philanthropy, at (312) 942-2275.


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