Beneficiary: The person who gets the money, property, income, principal, or proceeds of a Trust, estate, insurance policy, or retirement plan.
Charitable Trust: A type of Trust where the beneficiary is a non-profit organization.
Estate Tax Exemptions: Credits are available to offset federal and state estate taxes. Currently $5 million for the federal level and $2 million in Washington.
Gift Tax: Tax on gifts made during each calendar year less any applicable exclusions. Washington doesn’t have one.
Gift Tax Annual Exclusion: The provision in the federal tax law that excludes from federal gift tax the first $13,000 (as adjusted for inflation) in gifts made prior to death, in the present year.
Executor/Personal Representative: The person appointed to administer the estate. The PR is appointed in the Will or by the court. The PR:
- determines the extent and value of assets in the estate,
- manages those assets, pays any debts or expenses,
- files any necessary tax returns, and then
- distributes the estate in accordance with the Will.
Fiduciary: Someone appointed to act on behalf of another with respect to financial or health care matters. The fiduciary:
- must act with undivided loyalty in a thoughtful and careful way
- is fully accountable for the decisions made in a fiduciary capacity
- and may be personally liable for improper actions.
Guardian: A person legally appointed to manage the rights and/or property of a person incapable of taking care of his or her own affairs. A “guardian ad litem” is appointed on behalf of minor children.
Gross Estate: The total value of an individual’s property for federal estate-tax purposes.
Grantor: The person who makes the Will to give their loved ones and the court as an outline of his or her wishes.
Heir: A person entitled to inherit a portion of the estate of a person who has died without a will.
Joint Ownership: When two or more people own something, usually with a right of survivorship.
Intestate: The legal act of dying without a will.
Living Will/Health Care Directive: A document created by our state legislature to let doctors know the patient’s wishes regarding artificial life support systems. This directive can only be used if two physicians have diagnosed the person to be (1) in a terminal condition in which life-sustaining treatment would only artificially prolong the process of dying, or (2) an irreversible coma or other permanent unconscious condition from which there is no reasonable hope of recovery.
Testamentary Trust: A Trust established in a Will which comes into effect after the testator’s death.
Trust: A legal relationship where property is transferred to and managed by a person or entity for the benefit of another person.
Trust Agreement: The document which creates a trust and establishes the rules which control the Trust’s administration, including distributions.
Trustee: The person or entity entrusted with the duty of managing property placed in the Trust.
Probate: The state process that determines the validity of the Will, the value of the assets in the name of the decedent at the time of death, and the validity of debts or claims against an estate.
Probate Estate: Assets that fall within the jurisdiction of the probate court. Retirement accounts and life insurance proceeds are not generally part of the probate estate because they pass by beneficiary designation.
If you have further questions or want to arrange a confidential consultation to discuss estate planning issues, please contact us today. We have offices in Seattle and Bellevue-Redmond and can meet with you in one or both of those locations as needed. We look forward to meeting you and helping you achieve the solutions you seek.