Qualified Domestic Trust QDOT Definition and How It Works

Qualified Domestic Trust: Definition and Benefits One of the main benefits of a QDOT is that it provides a way for non-U.S. citizen spouses to defer the payment of estate taxes until they receive distributions from the trust. This can be especially helpful if the non-U.S. citizen spouse does not …

QTIP Trusts: Definition, How They Work, Advantages

What are QTIP Trusts? QTIP trusts are especially useful in situations where one spouse has children from a previous marriage or wants to protect assets from being used for purposes other than providing for the surviving spouse. By utilizing a QTIP trust, the spouse can ensure that their assets are …

Probate Court Definition and What Goes Through Probate

Probate Court Definition In legal terms, a probate court is a specialized court that deals with the administration of estates and the distribution of assets after someone passes away. It is responsible for overseeing the probate process, which involves validating the deceased person’s will, appointing an executor or personal representative, …

Per Stirpes Meaning and Uses in Estate Planning

Per Stirpes Meaning and Uses in Estate Planning What Does Per Stirpes Mean? The term per stirpes translates to “by roots” or “by branch” in English. In estate planning, it refers to a method of distributing assets among beneficiaries based on their familial relationship to the deceased. Under per stirpes …

Payable on Death Account: Pros and Cons

Pros of Payable on Death Account A Payable on Death (POD) account is a type of bank account that allows you to designate a beneficiary who will receive the funds in the account upon your death. This account has several advantages that make it an attractive option for estate planning. …

Named Beneficiary Meaning Overview FAQ

Named Beneficiary Meaning A named beneficiary is an individual or entity designated to receive the benefits of a trust, insurance policy, retirement account, or other financial asset upon the death of the account holder or policyholder. The named beneficiary is chosen by the account holder or policyholder and is typically …

Living Will Definition Purpose and How To Make One

What is a Living Will? A living will typically addresses decisions related to life-sustaining treatments such as resuscitation, mechanical ventilation, tube feeding, and organ donation. It provides guidance to healthcare professionals and family members about the individual’s desires for end-of-life care. Living wills are important because they ensure that an …

Irrevocable Trusts: How They Work, Types, and Uses

Irrevocable Trusts: How They Work, Types, and Uses There are several types of irrevocable trusts that serve different purposes. One common type is a charitable remainder trust, which allows the grantor to donate assets to a charity while still receiving income from those assets during their lifetime. Another type is …

Intestate Definition and State Rules

What is Intestate Definition? It is important to note that intestate succession laws vary from state to state, so it is crucial to consult the specific laws of the state in question to understand how the estate will be distributed. In some cases, if there are no living relatives or …

Inheritance Definition How It Works and Taxes

What Is Inheritance? Inheritance is the process by which an individual receives assets or property from a deceased person. It is a legal and financial term that refers to the transfer of wealth, property, or other assets from one generation to another. Inheritance can take various forms, including money, real …

Grantor Trust Rules Explained: How They Work

What are Grantor Trust Rules? Grantor trust rules are a set of regulations that determine the tax treatment of certain types of trusts. These rules are designed to ensure that the income and assets of the trust are properly attributed to the grantor for tax purposes. Types of Grantor Trusts …

Gift Inter Vivos: Definition, Process, and Example

Gift Inter Vivos: Definition Process of Gift Inter Vivos The process of making a gift inter vivos typically involves the following steps: Intent: The donor must have the intention to make a gift and transfer ownership of the asset to the donee. Delivery: The donor must physically or symbolically deliver …

Gift Causa Mortis: The Concept And Mechanism

Exploring the Mechanism of Gift Causa Mortis in Trust and Estate Planning When a person makes a gift causa mortis, they must meet certain requirements for it to be valid. First, the donor must have a present intention to make the gift, meaning they must genuinely want to transfer the …

Dynasty Trust Definition Purposes How It Works and Tax Rules

Dynasty Trust: Definition, Purposes, How It Works, and Tax Rules A dynasty trust is a powerful estate planning tool that allows individuals to pass on their wealth to future generations while minimizing estate taxes. This type of trust is designed to last for multiple generations, providing ongoing financial support and …

Distributable Net Income Definition, Formula, Example

Distributable Net Income: Definition and Formula Distributable Net Income (DNI) is a term commonly used in trust and estate planning to determine the amount of income that can be distributed to beneficiaries. It is an important concept to understand when managing trusts and estates, as it helps ensure that the …

Declaration Of Trust Meaning in Estate Planning

What is a Declaration of Trust? The Declaration of Trust outlines the specific instructions and guidelines for how the trust should be managed, including how the assets should be invested, distributed, and protected. It also identifies the beneficiaries who will receive the trust’s assets and any conditions or restrictions that …

Bare Trust: Definition, Advantages, Vs Other Trust Types

Bare Trust: Definition In a bare trust, the trustee has a legal obligation to manage and protect the assets for the benefit of the beneficiary. However, they cannot make any decisions regarding the assets without the explicit consent of the beneficiary. The trustee’s role is limited to holding and transferring …

Agency by Necessity: Finding Meaning in Estate Planning

Why Estate Planning is Essential for Everyone Estate planning is a crucial process that everyone should undertake to ensure their assets and wishes are protected and carried out after their death. It involves making important decisions about how your assets will be distributed, who will manage your affairs, and who …