What Is a Trust Fund? A trust fund is a legal entity that holds assets on behalf of a beneficiary or beneficiaries. It is created by a grantor, who transfers assets into the trust, and managed by a trustee, who has a fiduciary duty to act in the best interest … …
What Is a Special Power of Attorney? A special power of attorney is a legal document that grants someone the authority to act on behalf of another person in specific situations or for specific purposes. Unlike a general power of attorney, which gives broad authority to act on behalf of … …
What is a Revocable Trust? The main purpose of a revocable trust is to avoid probate, which is the legal process of distributing a person’s assets after their death. By placing assets in a revocable trust, they are no longer considered part of the grantor’s estate and therefore do not … …
What is a Notice to Creditors? A Notice to Creditors is a legal document that is published to inform potential creditors of a deceased person’s estate that they have a limited amount of time to make a claim for any outstanding debts owed to them by the deceased. This notice … …
What is a Notary? A notary is a public officer appointed by the government to serve as an impartial witness in the signing of important documents. The main duty of a notary is to verify the identity of the individuals involved in the transaction and ensure that they are signing … …
What Is a Gift in Trust: How It Works, Pros & Cons How It Works When a gift is made in trust, the grantor transfers ownership of the assets or property to the trust. The grantor can specify the terms of the trust, including how the assets are to be … …
What Is a Beneficiary? When someone establishes a trust or creates a will, they must name one or more beneficiaries to ensure that their assets are distributed according to their wishes after their death. Beneficiaries can also be designated for various financial accounts, such as life insurance policies, retirement plans, … …
What is Unit Trust Investment? A unit trust investment is a type of investment vehicle where funds from multiple investors are pooled together to create a diversified portfolio of assets. These assets can include stocks, bonds, real estate, and other types of securities. The unit trust is managed by a … …
Uniform Transfers to Minors Act (UTMA) Explained The Uniform Transfers to Minors Act (UTMA) is a legal framework that allows individuals to transfer assets to minors without the need for a formal trust. It provides a way for parents, grandparents, or other individuals to set aside money or property for … …
What is the Uniform Simultaneous Death Act? The Uniform Simultaneous Death Act is a legal provision that addresses the issue of two or more individuals dying at the same time or in circumstances where it is impossible to determine the order of their deaths. This act is relevant in the … …
Eligibility Requirements for Widow’s Allowance Widow’s Allowance is a financial benefit provided to widows and widowers to help them cope with the loss of their spouse and maintain their financial stability. However, not all widows and widowers are eligible for this allowance. There are certain eligibility requirements that need to … …
What is a Waiver of Notice? A waiver of notice is a legal document that allows a person to voluntarily give up their right to receive formal notice of certain legal proceedings. This document is commonly used in various legal contexts, such as trust and estate planning, where it is … …
What is a Voluntary Trust? Voluntary trusts can be revocable or irrevocable. A revocable trust allows the settlor to change the terms or terminate the trust at any time, while an irrevocable trust cannot be modified or revoked without the consent of the beneficiaries. How Does a Voluntary Trust Work? … …
What is the Unlimited Marital Deduction? The Unlimited Marital Deduction is a provision in the United States tax code that allows married couples to transfer an unlimited amount of assets to each other during their lifetimes or upon death without incurring any federal estate or gift taxes. This deduction is … …
What is a Will? A will is a legal document that outlines how a person’s assets and properties will be distributed after their death. It is a crucial part of estate planning and allows individuals to have control over what happens to their belongings and who will inherit them. A … …
What is a Revocable Beneficiary? A revocable beneficiary is a term used in estate planning to refer to a beneficiary who can be changed or revoked by the policyholder or account owner at any time. This type of beneficiary designation provides flexibility and control over the distribution of assets upon … …
What is a Living Trust? Key Features of a Living Trust There are several key features of a living trust that distinguish it from other estate planning tools: Revocable: A living trust is revocable, which means you can make changes to it or even revoke it entirely at any time … …
What is Survivorship? Survivorship is a legal concept that refers to the ownership of property or assets by two or more individuals with the right of survivorship. It is commonly used in joint tenancy and tenancy by the entirety, where the surviving owner automatically inherits the deceased owner’s share of … …
What is Pari-Passu? In trust and estate planning, Pari-Passu ensures that all parties involved are treated fairly and receive an equal share of the assets or debts. This principle is particularly important when there are multiple beneficiaries or creditors with competing claims. When assets are distributed pari-passu, it means that … …
What is a Life Estate? Creation of a Life Estate A life estate is typically created through a legal document, such as a will or a trust. The document will specify the life tenant, the remainderman, and the terms and conditions of the life estate. It will also outline any … …
The Importance of Trusts in Estate Planning Estate planning is a crucial aspect of managing your assets and ensuring that your wishes are carried out after your passing. One essential tool in estate planning is the establishment of a trust. A trust is a legal arrangement that allows you to … …
Definition of Heirs In the context of estate planning and inheritance, heirs are individuals who are entitled to receive assets or property from a deceased person. They are the individuals who inherit the estate of the deceased, whether through a will or by intestate succession. Heirs can be classified into … …
What are Generation-Skipping Trusts? A Generation-Skipping Trust (GST) is a type of trust that allows individuals to transfer assets to their grandchildren or future generations, skipping their children as beneficiaries. This type of trust is designed to minimize estate taxes and provide long-term financial benefits for future generations. With a … …
What is an Estate? An estate refers to the total net worth of an individual, including all their assets, possessions, and liabilities. It encompasses everything a person owns, ranging from real estate properties, bank accounts, investments, vehicles, personal belongings, and even debts. When someone passes away, their estate is left … …
What is Estate Planning? Estate planning is the process of arranging and managing an individual’s assets during their lifetime and after their death. It involves making decisions about how to distribute one’s wealth, property, and possessions to loved ones, charities, or other beneficiaries. Estate planning also includes making arrangements for … …
Different Types of Endowments 1. Restricted Endowments Restricted endowments are funds that are designated for a specific purpose or use. The donor specifies how the funds should be used, and the organization or institution must adhere to these restrictions. For example, a donor may establish a restricted endowment to provide … …
What is Ultimogeniture? History Over time, ultimogeniture became more prevalent in certain cultures and regions. For example, in some parts of Asia, such as China and Japan, ultimogeniture was commonly practiced to maintain family lineage and preserve family wealth. Mechanics In ultimogeniture, the youngest child inherits the majority, if not … …
What is a Trust Company? A trust company is a financial institution that acts as a fiduciary, managing assets on behalf of individuals, families, and organizations. It is responsible for safeguarding and administering assets according to the terms of a trust agreement or other legal arrangement. Trust companies are regulated … …
Transfer on Death (TOD): What It Is and How the Process Works Transfer on Death (TOD) is a legal arrangement that allows individuals to designate beneficiaries for their assets, such as bank accounts, investments, and real estate, to transfer automatically upon their death. This process is commonly used in estate … …