Legal Terms, Glossary, and Resources
The legal name or property (real or intangible), this legal name tells who or what entity is the owner of that property. e.g. John and Jane Smith, John and Jane Smith Revocable Living Trust, etc.
the individuals or fiduciaries appointed to serve if the primary person is not available, becomes incapacitated, resigns, or dies.
The person named to receive a property upon the death of an individual. Upon death, these assets are now in the ownership of the beneficiary named without probate. Note: only certain types of assets allow for these designations and care should be taken when making these decisions. Many unwittingly upset their estate plan with these decisions, please consult your estate planning attorney. These assets usually are life insurance, annuities, IRSs, 401(k)s, pension or profit sharing plans.
Capital Gains and Capital Losses
Gain or loss from the sale or exchange of a capital asset is characterized as either short-term or long-term, depending on how long the asset was held by the taxpayer. If a tax payer has both long-term and short-term transactions during the year, each type is reported separately and gains and losses from each type are netted separately. The net long-term capital gain or loss for the year is then combined with the net short-term capital gain or loss for the year to arrive at an overall (net) capital gain or loss. When capital gains exceed capital losses, the overall gain is included with the taxpayer’s other income. However, net long-term capital gain is generally subject to a maximum tax rate of 15% for individuals and 35% for corporations.
Determining Holding Period
In determining how long an asset was held, the taxpayer begins counting on the date after the day the property was acquired. The same date of each following month is the beginning of a new month regardless of the number of days of the preceding month. For example, if an asset is acquired on March 24, 2007 it must be held until March 25, 2008.
Qualified dividend income is based at the same rate used to calculate an individual’s capital gains (i.e. 15% maximum or 0% minimum for those in the 10% or 15% tax brackets). Qualified dividends are paid to shareholders of a domestic corporation or a qualified foreign corporation between January 1, 2003 and December 31, 2010 are taxed at capital gains rates. The zero percent rate applies to taxpayers in the 10% or 15% tax brackets for 2008 through 2010.
Documents (in Estate Planning) the pieces of written information that are drafted by your attorney to attain your goals. The four building block Estate Planning documents are a person’s Last Will and Testament, Trust, Durable Power of Attorney, and Living Will.
Durable Power of Attorney
A document that delegates authority and decision making from one person to another that allows the individual named to have the authority even after the principal’s incapacity.
"Estate" when used in the context of probate... The term refers to the total property owned by a deceased person that is being passed to beneficiaries under a will during the probate proceeding or before the property is distributed.
Estate Planning Process
Giving what you want to whom you want when you want the way you want. The process of Estate Planning involves building the attorney-client relationship to achieve your goals for yourself and your loved ones. It is not a one-time transaction of documents; it involves speaking with your attorney and updating when life has changed.
A capital asset must be held “more than 12 months” in order for realized gain to be classified as long-term capital gain.
Incapacitated (or Incapacity)
Is the lack of power or ability to perform a given task or several tasks or the ability to properly reason certain decisions. Mental incapacity and physical incapacity is determined by a medical professional.
Installment payments are subject to the capital gains rate in force at the time they are received, not in force at the time of the original transaction.
These are the steps that your attorney takes to protect yourself, and your loved ones from possible creditors and other liabilities that may face you and your loved ones during your lifetime and afterwards.
An obligation or legal debt, can be brought on by an accident, misconduct, and creditors.
Is not a will, however, like a will it is a delineation of authority telling people an individual’s medical wishes, and the treatments that the individual wishes to and wishes not to receive in the event he or she is brain-dead with little prospects of recovery.
Give the wrong title or name to: Account registrations. See Asset Titling.
Power of Attorney
A delegation of decision-making authority from one person to another. The principle, the person creating the power of attorney , may delegate many types of authority, e.g. business, personal, and health care transactions.
Trustmaker, Grantor, Settlor, Trustor
A trust is formed. Your name appears within the document as its trustmaker, settlor, grantor or trustor. Which are you? Answer: All. All the terms mean the same thing. They define the individual who formed the trust. The trustmaker/grantor/settlor/trustor who forms the trust, moves his/her property and assets into its ownership.
A determination of how an individual wants their property to be given when they pass, captured in a document to preserve his or her wishes.