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Planned
Giving
Glossary
APPRECIATED
ASSETS are
assets that have a higher market value than their basis
or tax purpose value. Such assets would, if sold by an individual
or non-charitable organization at a price higher than their
basis, potentially generate a taxable capital gain (either
long-term or short-term depending on the holding period).
 The
ATTORNEY- or lawyer - is the person licensed by the
state to practice law and assist the executor, trustee,
and guardian. It is conceivable that each could hire a separate
attorney, but usually one attorney represents all three.
The
BASIS is the tax purpose value of the property or
asset used in establishing the potential capital gain amount.
A
BENEFICIARY is the person and/or organization that
receives the benefits (usually assets or income) of the
trust.
A
BEQUEST is a gift of property or assets to a beneficiary
as defined in a will.
A
BYPASS TRUST is set up to avoid or bypass
the surviving spouse's estate, which enables each spouse
to use the federal estate tax exemption.
The
CHARITABLE GIFT ANNUITY offered through a charity
is used by many to provide income for the annuitant and
a second beneficiary, if any. The annuitant (the person
investing funds through the charity) receives a contract
or agreement from the charity which states that the charity
will pay the annuitant a fixed income for life (lives) with
payments to start immediately or at some set future time.
Probate or court involvement is avoided on these funds.
The income paid under the annuity is secured by the assets
of the charity. See Benefits
of the Gift Annuity for more details.
A
CHARITABLE LEAD TRUST is almost the opposite of a
charitable remainder trust. During the term or life of the
charitable lead trust, an annuity or unitrust income interest
is distributed each year to the designated charitable beneficiary
and the assets are eventually transferred to the trustor's
or grantor's designated non-charitable beneficiary(ies).
A
CHARITABLE REMAINDER ANNUITY TRUST is a trust which
is set up to pay a return or fixed annual percentage of
5 percent (or more) of the net fair market value of the
assets placed in the trust. The trust assets are valued
initially, at the time the property is placed in the trust.
The trust assets are never revalued.
A
CHARITABLE REMAINDER UNITRUST is a trust which is
set up to pay a return or fixed annual percentage of 5 percent
(or more) of the net fair market value of the assets placed
in the trust. The trust assets are revalued annually.
A
CODICIL is a written change or amendment made to
a will.
The
EXECUTOR is the person or institution named in a
person's will who carries out the terms of the will. Traditionally,
the word has referred to the male and Executrix to the female,
but this distinction is rapidly disappearing.
The
GUARDIAN is the person who is appointed by the Court
to care for the person and/or estate of a minor child or
incompetent person. One can nominate a guardian in a will,
and though normally the court will honor that nomination,
the Court has the right to agree or disagree.
JOINT
TENANCY is a type of ownership where any two or more
persons, related or not, may hold (own) property and the
property passes to the survivor or survivors on the death
of one. This passing is not automatic, as some think, and
the procedure for passing will depend on local law. But,
this form of ownership does have the advantage of allowing
property to pass to the survivor without delays of probate
and court administration costs.
A
LIFE INSURANCE TRUST is usually set up for the purpose
of excluding the proceeds of life insurance from the insured's
and the spouse of the insured's estate for death tax purposes.
It is an irrevocable trust.
A
LIVING TRUST is a trust set up to operate during
the life (and can operate after the death) of the one setting
up the trust. It can be revocable, or, in other words, you
can change your mind and have some or all of the trust property
returned to you during your life. An irrevocable trust cannot
be changed except in certain legal circumstances (fraud,
unlawful agreements, merger of interests, decision of the
Court). See Living Trust - Advantages/Disadvantages.
POOLED
INCOME FUND - also called a Charitable Remainder Pooled
Income Fund is an investment fund much like a mutual fund.
It is made up of transfers by many persons to the fund who
receive life income interest in exchange for their transfers,
based on the value of the transfer into the fund and based
on the income earned by the fund.
PROBATE
is the legal process of proving a will, appointing an executor,
and settling an estate; but by custom, it has come to be
understood as the legal process whereby a dead person's
estate is administered and distributed.
A
QUALIFIED TERMINABLE INTEREST PROPERTY TRUST (QTIP)
is a trust often set up to avoid transfer tax on the first
spouse's death. The deceased spouse establishes the ultimate
disposition of the property, rather than the surviving spouse
including the property in their estate. During their lifetime,
the surviving spouse receives all income from the principal
and, in some cases, has access to the principal.
A
RETAINED LIFE ESTATE is a gift plan defined by federal
tax law allowing the donation of a personal residence (to
include a vacation home) or farm with the donor retaining
the right to life enjoyment. A life estate may be retained
for one or more lives or it may be retained for a term of
years. All routine expenses - maintenance fees, property
taxes, repairs, etc. - are the responsibility of the donor.
The donor receives income tax benefits in the year of the
gift (the property is irrevocably deeded to the charity)
and estate tax benefits.
TENANTS
IN COMMON is a property ownership arrangement in which
two or more persons own property jointly. It is not necessary
that the ownership consist of equal shares or percentages
of the property. Generally there is no right of survivorship
when a co-owner dies. The share of the property belonging
to the deceased co-owner passes to his or her heirs and
the shares of the remaining original co-owners do not change.
TESTAMENTARY
TRUST - A will can have a trust written into it, called
a Testamentary Trust, which is set into motion by the Court
after the will reaches a certain point of execution, and
is used only after the death of the person whose estate
it represents.
A
TRUST is defined as any arrangement where property
is to be held and administered by a trustee for the benefit
of those for whom the trust was created. Depending on the
type and how it is established, a trust may be revocable
(changeable) or irrevocable (not changeable).
The
TRUSTEE is the person or institution named by a person
making the trust, or appointed by the court, to carry out
the terms of the trust. Assuming a trust has been set up
through a will, when the executor's job is finished, the
trustee's job begins.
A
TRUSTOR is the individual who establishes the trust.
Also referred to as the GRANTOR and/or SETTLOR.
A
WILL is the legal expression or declaration of a
person's mind or wishes as to the disposition of the person's
property, to be performed or take effect after the person's
death.
Please
note, individual financial circumstances will vary. The
information on this site does not constitute legal or tax
advice. Donor stories and photographs are for purposes of
illustration only. As with all tax and estate planning,
please consult your attorney or estate specialist. All material
is copyrighted and is for viewing purposes only. Use of
this site signifies your agreement with the terms
of use. The content in this Planned Giving section has
been developed for Sisters of Notre Dame de Namur, Ohio
Province by Future
Focus. Please report any problems to section
webmaster. Revised: February 6, 2007 21:57.
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Sisters of Notre Dame de Namur, Ohio Province 701 East Columbia
Avenue, Cincinnati, OH 45215-3999 513-761-7636 | 513-761-6159
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Weaver. This page was updated: February 6, 2007 21:57
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