Glossary of Terms

A Trust

The surviving spouse’s portion of an A-B trust. Also called marital trust or survivor’s trust.

A-B Trust

A trust that includes a tax-planning provision that lets you provide for your surviving spouse and keep control over who will receive your assets after your spouse dies. It also lets both spouses use their federal estate tax exemptions. This can save a substantial amount in estate taxes and leave more money for your beneficiaries. For example, in 2011 and 2012, when the federal estate tax exemption is $5 million, an A-B trust will let a married couple transfer up to $10 million to their beneficiaries estate tax- free, saving up to $1,750,000 in estate taxes.

Administration

The court-supervised distribution of an estate during probate. Also used to describe the same process for a trust after the grantor dies.

Administrator

Person named by the court to represent a probate estate when there is no will or the will did not name an executor. Female is administratrix. Also called personal representative.

Alternate Beneficiary

Person or organization named to receive your assets if the primary beneficiaries named in your Trust die before you do.

Ancillary Administration

An additional probate in another state. Typically required when you own real estate in another state that is not titled in the name of your trust.

Annual Exclusion

Amount you can give someone each year without having to file a gift tax return or pay a gift tax. Currently $13,000 per recipient ($26,000 if married). The amount of tax-free gifts is tied to inflation and may increase from time to time.

Assets

Basically, anything you own, including your home and other real estate, bank accounts, life insurance, investments, furniture, jewelry, art, clothing, and collectibles.

Assignment

A short document that transfers your interest in assets from your name to another. Often used when transferring assets to a trust.

B Trust

The deceased spouse’s portion of an A-B trust. Also called credit shelter or bypass trust.

Basis

What you paid for an asset. The value that is used to determine gain or loss for income tax purposes.

Beneficiaries

In a living trust, the persons and/or organizations who receive the trust assets (or benefit from the trust assets) after the death of the trust grantor.

By-Pass Trust

Another name for the "B" part of an A-B living trust because the assets in this trust bypass federal estate taxes.