Administration – the process of settling an estate; the management of a decedents estate, including the marshaling of assets; the payment of expenses, debts and taxes; the payment or delivery of legacies; and the submission of an Accounting to the beneficiaries
Administrator – one who is appointed by the court to settle an estate. This happens when the decedent has no valid will.
Affidavit of Domicile – statement indicating where decedent last voted, how long he
lived at last address
Alternate Valuation Date – the date 6 months after the decedent’s death that may be used for estate tax valuation purposes
Alternate Value – the value of the gross estate 6 months after death, unless property is distributed, sold, exchanged, or otherwise disposed of within 6 months. In that case, the value of such property is determined as of the date of such disposition
Annual Exclusion – a gift tax exclusion of $ 12,000 that a donor is allowed each year for each donee, provided the gift is one of a present interest
Applicable Credit Amount – a credit against the federal estate tax which in effect allows you to pass a certain amount of property free of estate tax
Applicable Exclusion Amount – the equivalent value of an individual’s property offset by the applicable credit amount. In 2006, the amount of property that you can pass to another without paying estate tax is $ 2,000,000
Beneficiary – (1) one who inherits a share or part of a decedent’s estate or (2) one who takes the beneficial interest under a trust
Bequest – a gift of personal property by will, distinguishing it from a devise, which is a gift of real property
Bypass Trust – a testamentary trust designed to keep property transferred to it by the decedent-spouse out of the surviving spouse’s gross estate; also called the Credit Shelter Trust
Codicil – a supplement to a will, whose purpose is to add to, subtract from, or qualify, modify or revoke provisions of a prior will
Decedent – the person who has died
Devise – in a will, a gift of real property, distinguishing it from a bequest, a gift of personal property
Disclaimer – renunciation of the right to possess; renunciation of claim of title. When a beneficiary disclaims assets of an estate, he is renouncing his right to the property. State law will then govern the rules of devolution when an effective disclaimer is made
Donor – a person who is making a gift
Donee – a person who is receiving the gift
Elective Share Provisions – in
New Jersey
, under NJSA 3B:8, the surviving spouse has a right to one-third of the augmented estate. The statute provides a special formula for calculating the augmented estate.
Estate Tax – a tax imposed upon the right of a person to transfer property at death. This type of tax is imposed not only by the federal government, but also by many states, including the State of
New Jersey
Executor – a person who is appointed in the testator’s will to carry out the testator’s directions concerning the dispositions he makes in his will
Fiduciary – a person having a duty, created by his undertaking, to act primarily for the benefit of another in matters connected with his undertaking (for example, an executor, administrator or trustee)
Form 706 –
United States
Estate (and Generation Skipping Transfer) Tax Return –
The tax return used to calculate the federal estate tax due as imposed by Chapter 11 of the Internal Revenue Code. You must file Form 706 for any gross estate (plus adjusted taxable gifts) in excess of $ 2,000,000 in 2006
Form 712 – a standard form issued by an insurance company when someone dies with an insurance policy. The form summarizes the general facts such as the name of the policy owner, policy number, beneficiaries of the policy, and the face amount of the policy. This form is filed with the federal estate tax return Form 706
Form 1041
U.S.
Income Tax Return for Estates and Trusts – an income tax return for a trust or an estate
Gift Tax – a tax imposed on transfers of property by gift during a donor’s lifetime
Gross Estate – an amount determined by totaling the value of all assets that the decedent had an interest in, which are required to be included in the estate by the Internal Revenue Code
Heir – those whom statutory law would appoint to inherit an estate should someone die without a will
Inheritance Tax – a state tax levied on the right of the heirs to receive property;
New Jersey
imposes an inheritance tax
Intestate (Intestacy) – the condition of having died without leaving a valid will
Intestate Succession – the disposition of property to heirs according to the state laws of descent and distribution upon the death of a person who has left no will or who has left a portion of his estate unaccounted for in his will. In other words, if a person dies without a will, the state’s laws determine who will inherit that person’s estate
Irrevocable Trust – a trust created when the grantor permanently transfers property to the trustee and cannot alter, amend, revoke or terminate the arrangement or reclaim the property
Legacy – a disposition by will of personal property; synonymous with bequest
Living Trust – a trust that is created and operates before the death of the settlor
Non-probate Property – property that passes by the operation of law or contract; property that passes outside the administration of the estate. It passes other than by will (for example, jointly held property, life insurance proceeds payable to a named beneficiary, or property in an inter vivos trust)
Operation of Law – the passage of property other than by will or contract
Pecuniary Bequest – a specific bequest, a bequest of a particular item(s)
Power of Appointment – authority given to a person (the donee) to dispose of the property of another, or of an interest therein. A general power of appointment may be exercised by the donee, in favor of any person(s) he chooses, including himself. The donee of a special power of appointment is limited in the choice of beneficiaries by the donor of the power, and so must appoint in favor of member(s) of the class specified in the instrument creating the power.
Present Interest – a present right to use or enjoy property
Probate – the act of proving that an instrument purporting to be a will was signed and otherwise executed in accordance with the legal requirements for a will, and of determining its validity
Probate Property – property that is passed under the terms of the will or laws of intestacy if there is no will
Refunding Bond and Release – the heirs, legatees, or the beneficiaries sign this form before receiving their share of the estate. By signing this form, the individual promises to return a portion of the funds if any unforeseen expenses arise and is discharging the executor from all claims and demands
Residuary Bequest – a bequest consisting of the remainder of an estate after the payment of debts, general legacies and other specific gifts
Revocable Living Trust – a trust that can be revoked, amended, or terminated by the grantor and the property recovered by the grantor
Settlor – one who creates a trust by giving real or personal property in trust to another for the benefit of a third person
Specific Bequest – a bequest of particular item(s)
Surrogate – a judicial officer, of limited jurisdiction, who administers matters of probate and intestate succession
Surrogate’s Certificates – certificates issued by the Surrogate Court that prove that the executor appointed in the will has been deputized and is authorized to perform the executor’s duties for the estate
Tangibles (Tangible Property) – property, either real or personal, capable of being possessed. Tangible property is capable of being perceived by the senses, as distinguished from intangible property such as franchises, copyrights and easements
Taxpayer Identification Number – an estate or trust applies to the
IRS
for this number using Form SS-4. This number is comparable to a social security number for an individual. It is used to identify the estate or trust on all income tax returns filed with the
IRS
Testamentary Trust – a trust that is established during the settlor’s life but is contained in the settlor’s will and does not take effect until the settlor’s death
Testamentary Trustee – the trustee of a testamentary trust
Testate – when someone has died with a valid will
Testator – one who dies leaving a will
Trustee – one who hold legal title to property in trust for the benefit of another person, and who is required to carry out specific duties with regard to the property, or who has been given power affecting the disposition of property for another’s benefit
Trust – an entity that holds assets for the benefit of certain other persons or entities
Will – a person’s declaration of how he desires his property to be disposed of after his death
