An agreement made by couples in which each party creates a “Trust A” and a “Trust B” for the estate.
When a spouse dies, their “Trust A” wishes pass the estate on to the surviving spouse.
When the surviving spouse dies, that spouse’s “Trust B” becomes active in passing on the estate to the beneficiaries named by the second spouse, regardless of the first spouse’s “Trust B” requests.
A reduction in the amount awarded to a beneficiary due to the outstanding debts of an estate (i.e. the abatement of taxes on an inherited estate).
A court appointed individual in charge of managing an estate where an executor is absent.
The collection of the deceased’s assets for liability settlement and distribution (i.e. the job of the administrator) is called “administration.”
A written statement created under oath that is admissible by the court as evidence.
A sum of money that is paid monthly or annually to a beneficiary, rather than paid out in a single lump-sum.
The original value of the property plus the appreciated (increased) value of the property over time of ownership.
Deducting community expenses from this figure gives the new figure, which is the total value of the property to be shared equally between spouses.
A reason (medical, academic, supportive, or emergent) that is valid for withdrawing from a trust.
Someone who is named in a will or a trust to inherit part or all of an estate.
Business Personal Property
All interests in business, with the exception of real estate. (i.e. intellectual property, partnerships, shares, etc.)
The “B Trust” in an AB Trust; bypasses the estate tax for the estate of the deceased that is being passed to the surviving spouse. (See “AB trust”).
Charitable Lead Trust
A trust that distributes to a named charity for the time set by the terms of the trust. The remaining assets of the trust are passed to the beneficiaries at the end of the agreed trust time period.
Charital Remainder Trust
A trust that distributes to the named beneficiaries for the time set by the terms of the trust. The remaining assets of the trust are passed to the named charity in the trust agreement.
The process of legally amending a will.
Common Law Property States
States in which property is shared equally between two spouses, regardless of who is named on the title or deed.
Community Property States
States in which property is divided by title or deed in which the owner is explicity named.
An individual appointed by the court to care for the property of someone who is incapacitated.
A deceased individual.
Relations by blood or adoption, such as children or grandchildren.
To renounce or refuse an inheritance. In Virginia, the beneficiary must express full disinterest in the estate.
Durable Power of Attorney
An individual given the responsibility of controlling the financial affairs of another person (the “principal”).
The property that is owned minus the assets that are owed to another party. The estate cannot include property that is not owned outright.
The process that creates and establishes a will, trust, or other similar legal document which acts as a guide to managing an estate in the event of incapacity or death.
Tax placed on an estate being transferred to the beneficiaries on behalf of the deceased.
The person or legal authority that takes control of all property included in the estate of a will or trust.
Family Limited Partnerships
The method of transferring property to children or grandchildren by creating a partnership in business.
An individual appointed to manage the money or the property of the beneficiaries. Examples of fiduciaries include executors and trustees.
A person who creates and/or distributes to a trust.
A person who is named as the caretaker for children in the absence of the parents. This can include physical or financial guardianship for temporary or lifelong purposes.
Health Care Power of Attorney
The individual appointed to make health care decisions in the case of incapacity.
An individual with entitlement to an estate in the absence of a will or named beneficiaries.
Earnings from principal such as paychecks from your job, rent, etc.
Individual Retirement Account (IRA)
Retirement programs, pensions, or 401(k) plans that go directly to the named policy beneficiaries. These accounts are not subject to probate.
The physical, intellectual, or shared property of the grantor’s estate, as documented by a will or trust, that is divided among the beneficiaries as outlined in such relevant documents.
An irrevocable trust with the intention of owning life insurance to be excluded from the total estate at the time of death.
The act of dying without a will.
A trust that cannot be revoked, amended, changed, or canceled once it has been enacted.
The share of ownership in a property that is included in the estate. The adjoining tenant will automatically inherit the separate share.
Some states allow spouses to legally separate in preparation for a divorce. Virginia, however, does not recognize legal separation. Alternatives to legal separation that work in Virginia include a well-written property settlement agreement and a divorce from bed and board.
Someone who is receiving income from a trust or estate for life.
Coverage and funds that go directly to the named policy beneficiaries. Life insurance is not subject to probate.
Monetary estate such as cash, savings accounts, checking accounts, shares, stocks, securities, bonds, etc.
A document that controls the property within the trust while the grantor is alive and quickly distributes the estate to the named beneficiaries.
Established to protect the property transferred to a spouse through an AB trust. Marital trusts typically aid in qualifying the transfer of the estate for marital deductions, which allow for the exemption of property from gift taxes when left to a spouse.
A clause of a will or trust that provides each beneficiary with the opportunity to contest their inheritance. However, should they be unsuccessful, doing so automatically forfeits their share of the estate.
A trust established with contingencies that will remain in effect following the death of the grantor.
An agreement that details what happens to each partner’s share at the time of their death.
Documents that name the beneficiaries that are able to quickly access and receive deeds and vehicle registrations.
Documents that name the beneficiaries that are able to quickly access and receive assets, such as bank accounts and stock holdings.
A combination of all estate property (aside from liquid assets), such as retirement accounts, vehicle titles and deeds, jewelry, art, life insurance, etc.
Used in kind with a revocable trust to transfer the remainder of an estate from life into the trust after death.
Power of Attorney
The appointment of an individual to act in place of another as a legal and/or financial representative at the time of incapacity or death.
In a trust, the one in control of the inheritance until the beneficiary reaches the age set in the restrictions of the trust.
The legal process of the court in reviewing an estate for distribution to named beneficiaries.
The tax passed on items that are inherited through the probate process. This tax can vary by state and the value of the inheritance.
Qualified Domestic Trust (QDOT)
A marital trust created for the benefit of non-citizens and surviving spousal support by marital exclusion from estate tax.
Qualified Personal Residence Trust (QPRT)
An irrevocable trust that grants the holder access to the property for a documented amount of time, after which the ownership of the property will be passed on to the children or beneficiaries of the trust.
Qualified Terminable Interest Property (QTIP)
Allows property to be passed on directly to the surviving spouse (as the sole beneficiary) without application of estate taxes, regardless of the value of the estate, due to the IRA application of an “unlimited” marital deduction.
Cash that can be left to beneficiaries to cover any immediate costs that may arise while the estate is in probate.
The remainder of property after settling an estate’s liabilities and beneficiary inheritance.
A trust that is established during the lifetime of the holder that is subject to amendation, change, transfer, or cancellation by the trust holder.
Special Needs Trust
A trust established for the life-long care of a family member with specific disabilities; establishes the financial and medical security of care for the beneficiary. This limits the use of property within the trust to the sole care of the beneficiary.
Established restriction within a trust that prevents intentional or unintentional spending of funds or access to property within a trust. This provision also acts to protect an estate’s assets from the claims of creditors.
A trust that becomes active in death, following liability settlement and beneficiary property distribution.
Signing party of a will.
Transfer on Death Designation
The designation of assets to pass free of probate immediately to an individual (also known as a “payable on death” designation).
The legal establishment of an entity to represent the estate and assets of the grantor in life and in death.
The “executor” equivalent in charge of managing a trust following the death of the grantor.