An accumulation and maintenance trust is a type of discretionary trust designed to allow for the accumulation of income until certain beneficiaries reach a specified age, at which point the income is applied for their maintenance, education, or benefit.
A breach of trust occurs when a trustee acts contrary to their fiduciary obligations, which can involve misappropriation of trust assets or failure to act in the beneficiaries' best interests.
A business trust is an unincorporated business organization created by a trust instrument. It is an alternative to a corporation or partnership structures, allowing the trustee to manage the trust's assets for beneficiaries.
A provision in a will or insurance policy that states how property should be distributed if both the insured (or will-maker) and their beneficiary die in the same event or within a short period of each other.
Definition, explanation, and discussion around the term 'Death Benefit,' including examples, FAQs, related terms, online resources, and suggested books for further readings.
A Discretionary Trust is a type of trust where the shares of each beneficiary are not fixed by the settlor but can be varied at the discretion of the trustees or another appointed person.
Estate planning distribution involves the management and allocation of a person's assets during their lifetime and after their death, ensuring a systematic transfer of property to beneficiaries.
An executor is a person appointed in a will to administer the estate of a deceased person, ensuring that assets are distributed and liabilities are paid as per the instructions in the will.
A type of trust that has beneficiaries other than the grantor, but because of the retention of certain interests or certain powers over the trust, all income of the trust is taxed to the grantor.
Inherit the estate by statutory law if the ancestor dies without a will (intestate). In a broader sense, those who inherit by will, deed, or operation of law.
Insurance is a system whereby individuals and companies concerned about potential hazards pay premiums to an insurance company, which reimburses (in whole or part) them in the event of loss. The insurer profits by investing the premiums it receives. Some common forms of insurance cover business risks, automobiles, homes, boats, worker's compensation, and health. Life insurance guarantees payment to the beneficiaries when the insured person dies. In a broad economic sense, insurance transfers risk from individuals to a larger group, which is better able to pay for losses.
An insurance settlement involves receiving proceeds from an insurance policy. The terms of the settlement are outlined in the policy and may include options like immediate lump sums or periodic payments.
An interest-in-possession trust ensures that the income generated by the trust's assets goes to a specific beneficiary or beneficiaries for a fixed period or until the life tenants' death. Subsequently, the capital passes to the remainderman.
An irrevocable trust is a type of trust that cannot be altered, amended, or terminated without the consent of the beneficiary or beneficiaries. It is typically set up to provide asset protection and tax benefits.
An annuity that provides payments to two or more beneficiaries, typically a husband and wife. When one of the annuitants passes away, the survivor continues to receive annuity payments; however, the payments made to the deceased are not transferred to the survivor.
An annuity that makes a guaranteed fixed payment for the rest of the life of the annuitant. After the annuitant dies, the beneficiaries receive no further payments.
A probate estate includes all property that passes under a will or by state intestate succession laws from a decedent to their heirs or other beneficiaries. It is distinct from the gross estate.
A QTIP trust allows a grantor to provide income for their surviving spouse and designate other beneficiaries for the remaining trust assets after the surviving spouse's death.
RES refers to the property underlying a trust, which is the subject matter that the trustee holds in fiduciary capacity for the beneficiaries.
In various contexts, the term 'settlement' refers to different but related processes involving the distribution, resolution, or agreement on various matters such as estates, legal disputes, or real estate transactions.
Subchapter J of the Internal Revenue Code concerns the taxation provisions related to estates, trusts, beneficiaries, and decedents. It outlines the rules and regulations for income distribution, fiduciary responsibilities, and tax computation for these entities.
A testamentary trust is a legal entity created as a result of a will and generally takes effect upon the death of the grantor, in contrast to an inter vivos trust which is established during the grantor's lifetime.
An arrangement enabling property to be held by one or more trustees for the benefit of beneficiaries, commonly used to provide for families and in commercial situations.
A trust deed is a legal document that outlines the terms and conditions of a trust, typically including the names of the trustees, the identity of the beneficiaries, the nature of the trust property, and the powers and duties of the trustees.
A trust instrument is a legal document that creates a trust and stipulates its terms, trustee, beneficiaries, income, and corpus disposition.
A trustor, also known as a settlor, is an individual or entity that creates a trust by transferring assets to a trustee for the benefit of specified beneficiaries.
A document that dictates how a person's property is to be distributed after their death. It must meet certain legal requirements to be valid.
