Glossary of Planned Giving Terms

Abandoned Funds Assets of a decedent that are unclaimed. Sometimes discovered by companies called Asset Locators or Heir Finders

Accounting This document must be filed with the court in a probate matter and in a trust administration matter, the beneficiaries can request one. If the charity has a remainder interest, this document should be reviewed. The accounting lists all financial transactions of the executor or trustee from date of death to a final date near when distribution is to occur.

Administrator Person or corporation appointed by a court to settle the estate (i.e., pay taxes, bills, and distributed property to heirs) of a deceased person if no valid will can be found. See also personal representative.

Affidavit Written statement of fact voluntarily signed and sworn to before a person having authority to administer an oath.

Amendment A change or addition to a trust. Trust may be completely restated or only modified in an amendment.

Ancillary Administration Process of putting through probate property owned by a deceased person in the state where he or she owned it, not in the state in which he or she lived.

Assets Money and real and personal property owned by a person or organization.

Beneficiary Person who is named to receive some benefit or money from a legal document such as a trust, life insurance policy or will. Can also be referred to as legatee.

Bequest Gift provided through a will.

CRT Charitable Remainder Trust

Closed File All funds due the charity have been received.

Codicil An additional statement or change to a person’s will. Used in conjunction with a will.

Community Property Property acquired during marriage that was not a gift to or inheritance of one spouse or specifically kept separate.

Consent Agreement Agreement to a procedure. Note: Silence (not signing or filing an objection) is construed in some states as consent.

Contested Will or Trust See Will contest

Contingent Interest This occurs when the gift is conditioned upon another event, which may or may not occur.

Credit Estate Tax State tax on the assets of someone who has died. Applies only to estates that are required to pay federal estate taxes. Estates do not pay double taxes but instead, by paying a credit estate tax, “rebate” part of the federal estate tax owed back to the state.

Creditor Person or corporation to whom money is due.

Decedent Person who has died and left property to be administered.

Devise Interchangeable term for bequest; gift made through a will.

Discharge Release of duty or liability; entered by the court at the close of a legal process.

Disclaimer If accepting an asset of the estate goes against charity’s policy or would be dangerous, (within strict time elements) the charity can disclaim the portion of the estate comprised of the unacceptable assets. This course of action requires filing with the court.

Distributee Person who inherits; an heir.

Distribution Payment (may be full or partial) of bequest/devise.

Domicile Rule The domicile of the decedent is the place where (s)he lived at the time the will was executed (signed). This is the appropriate location for distribution of the bequest.

Donor Person or corporation who gives a gift or confers a power to another; creator of a trust.

Executor Person or corporation appointed in a will or by a court to settle the estate of a deceased person.

Federal Estate Tax Federal tax assessed against the assets of a person who has died if the value exceeded $1,000,000 ($1,500,000 in 2004/05, $2,000,000 in 200608, $3,500,000 in 2009). Filed on IRS form 706.

Final Distribution The last portion of the payment/benefit to an organization or person, “in full.”

501 ©(3) IRS form letter recognizing an organization’s tax exemption status.

Guardian Person or corporation appointed by a court to handle the affairs or property of another who is unable to do so because of incapacity or because he/she is under the age of majority.

Heir Person or corporation designated to inherit property from someone who has died.

Inactive File Funds are due to the charity, but it is difficult to determine the date of receipt. These are files that require less regular review. Examples of inactive files would be: Files with only tax reserves left or future remainder or contingent interests.

Intestate Dying without a valid will.

Inventory Detailed accounting of articles of property with their estimated value, required by the court to settle most estates.

Irrevocable Trust A trust that cannot be revoked. Revocable trusts usually become irrevocable at death.

Issue Offspring descended from a common ancestor (children, grandchildren, greatgrandchildren, etc.)

Joint Tenancy with the Right of Survivorship Form of ownership in which property is equally shared by all owners and is automatically transferred to the surviving owners if another dies.

Letters Testamentary Court documents obtained by the personal representative that confirms his or her authority to settle a deceased person’s estate. Also known as Letters of Administration.

Life Estate A benefit that passes to one for his or her lifetime.

Living Trust Agreement Created by an individual during his/her life that sets for how assets are to be administered during his/her life and distributed at his/her death. This type of trust involves transferring assets of the trust or to the trust.

Newly Discovered Assets Assets not known of at the time an estate was originally opened and in probate

Notice Information about certain facts. For example, the personal representative is usually responsible for informing (serving notice to) all interested parties that the estate of the deceased is open for probate.

Notice of Administration/Notice of Petition to Administer an Estate The first document filed by an attorney to begin probate of a decedent’s will and/or any codicils.

Open File A bequest file where information has been received and money is still due the charity, or additional information is needed to determine if there are any funds due the charity.

Order Written command or direction by a judge or court clerk; may outline a decision of the court, direct or forbid an action, or may be the final decision of the court.

Partial Distribution A part or percentage of the full benefit to which the person or organization is entitled.

Perpetual Trusts Trusts which last forever or until the principal of the trust is too small to justify a trust.

Per Stirpes Refers to one’s direct lineage of inheritance by law.

Personal Property Property other than land and fixtures.

Personal Representative Person named in a will or appointed by a court to settle an estate.

Petition to Determine Homestead Status Asks the Court to determine how real estate should be transferred through an estate (whether it qualifies as Homestead property.

Petition to Discharge Asks the Court to release the liability of the person administering the estate, based on demonstrated filings, etc., that the person’s duties have been fully performed.

Petition to Extend Time Asks the Court to grant additional time (beyond the statutory deadline) to file required documents.

Petition to Reopen Estate Asks the Court to reopen the probate administration of the estate after it has already been closed (usually when an asset has been newly discovered).

Pleadings Documents prepared by an attorney (or a person acting as their own attorney) filed with the court. Includes caption which contains the court’s name, case number and parties involved.

Principal The originating value of the trust or a promissory note. “Interest” or income is what is earned based on the value of the principal.

Probate Legal process of establishing the validity of a deceased person’s last will and testament. Commonly used to mean process and laws for settling an estate. A will goes through probate, a trust does not. In addition, assets that pass via a beneficiary designation (ira, insurance, etc) typically are not included in probate.

Real Property/Real Estate Land, including building(s) on it and its natural assets.

Remainder Interest Usually the interest that remains in an estate or trust, after it has continued for the benefit of another sometimes for their lifetime.

Reserve Distribution Usually a distribution that comes from a reserve fund maintained for an IRS clearance, or remaining income that was earned in the process of closing out a trust.

Resident Agent Person living in a state who is authorized to accept legal documents on behalf of another.

Residuary Estate That part of the estate remaining after all bequests have been made and claims satisfied.

Residuary Interest A gift of the “residue” of decedent’s will or trust is what’s left after other gifts, if any (called Specific Gifts or “Special” Gifts), have been made. Is sometimes interchanged with “remainder” gifts.

Small Estate Administration Simplified process for probating estates that are less than a specified dollar limit set by state law. Also known as Summary Adminsitration.

Specific Bequest A gift that is not a residuary gift but is specifically described

Statements Accounting of assets onhand, income, expenses and activities transacted.

Stock Power Form Form used to transfer ownership of stock, usually requires “medallion signature”.

Tenancy by Entirety Form of spousal ownership in which property is equally shared and automatically transferred to the surviving spouse. While both spouses are living, ownership of the property can be altered only by divorce or mutual agreement.

Testamentary Trust A trust created within a will.

Testate Leaving a valid will.

Testator/Testatrix The person who wrote a testamentary document, or a will.

Trust Legal document that transfers money or property for the benefit of another.

Trustee (Cotrustees) Person(s) or entity (e.g. bank trust department) that is administering a trust for the benefit of another. The Trustee has a fiduciary duty to the beneficiaries of the trust.

Trustor(s) Person(s) who create a trust. Also known as the Donor(s).

W9 IRS form used for taxfiling purposes

Waiver Agreement to forego future information, a process requirement, or right.

Waiving an Accounting In estate or trust matters an attorney may request that you waive the filing requirement of an accounting. An accounting shows all financial transactions of the estate/trust from the death of the decedent to the present. It is not recommended that an accounting be waived if the charity has a residuary interest. If the charity has a specific bequest it is fine to waive an accounting.

Will Legal document declaring how a person wishes to dispose of his or her property to heirs or beneficiaries after death. A will can be changed at any time. The most recent Will is the controlling document. An amendment to a will is called a codicil.

Will Contest Challenge of a will by a person who believes the will is unfair, invalid, or that one or more of its provisions does not accurately reflect how the deceased person wanted his or her property distributed.

Witness Person who is present at an event or at the signing of a document such as a will, real estate closing document, stock power form, beneficiary receipt, etc.