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Swier Law Firm FAQ

 

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  • What Does Provision Mean In Estate Planning?

    What Does Provision Mean In Estate Planning?

    This just refers to a clause or section of a legal document.

  • What Does Trust Mean In Estate Planning?

    What Does Trust Mean In Estate Planning?

    An entity that holds assets for beneficiaries.  Beneficiaries can be the grantor, grantor’s spouse/children, charities, pets, or other named individuals.  Beneficiaries can be named without being currently living. 

    Common Types Of Trusts

    Revocable Trust 

    A trust formed during someone’s lifetime which they have the right to “revoke” or end/cancel, change or amend during their lifetime.  This is commonly referenced as a way to avoid probate (trusts don’t die), but because the person has kept rights to the property it will not help avoid taxes.  These trusts need to be funded during life to gain their full benefit.

    GRAT: (Grantor Retained Annuity Trust)

    A trust used to transfer very large gifts without gift tax.  This is set up for a period or specific term with the Grantor receiving an annuity over that time.  At the end, what remains in the trust passes to the beneficiaries tax free.

    Living Trust: (See Revocable Trust above)

    Inter Vivos Trust: (See Revocable Trust above)

    This is a Latin term meaning “between the living” but is the same as a revocable trust described above.

    Pet Trust  

    A trust set up specifically to help care for pet/s after death.  Generally able to be used by the person caring for the pet for pet-related costs, can pass to beneficiaries or charity upon death of pet.

    QTIP Trust  

    (Qualified Terminable Interest Property Trust): This trust will delay estate tax until a surviving spouse dies so that more income will be available to that surviving spouse during his or her lifetime.

    QDOT Trust: (Qualified Domestic Trust)

    This trust will allow a non-citizen spouse to qualify for a marital deduction at the death of his or her spouse.

    QSST: (Qualified Subchapter S Trust)

    A trust that meets the IRS standards to be allowed to own subchapter S stock.

    Conduit Trust/Pass Through Trust 

    A trust set up to be the beneficiary of an IRA which states that any distributions made to the trust must be paid out of the trust that same year, no accumulation is allowed.

    Community Property Trust  

    A trust that will cause the assets within to be treated as community property even when not in a community property state.  This is best for couples that have low-basis assets since it allows a double step-up in basis of assets at death resulting in reduction or elimination of capital gains tax upon sale.  South Dakota is one of only a few non-community property states to allows community property trusts.

    Special Needs Trust/Supplemental Needs Trust 

    A trust intended to supplement the life of a disabled individual without interfering with state or federal benefits they are or may become entitled to.  This can be set up by someone else, or by the disabled person themselves.  Different rules will apply depending on who sets up this trust.

    Testamentary Trust  

    A trust that is not formed during a person’s life, but is instead formed at the person’s death, generally through provisions in their will.  This does not avoid probate.
     

  • What Does Testate Mean In Estate Planning?

    What Does Testate Mean In Estate Planning?

    To die with a will (opposite of “Intestate”).

  • What Does Reverse Mortgage Mean In Estate Planning?

    What Does Reverse Mortgage Mean In Estate Planning?

    A mortgage loan placed on unsecured property.  These are marketed to older individuals as allowing them to get cash for the equity in their home with no monthly mortgage payments.  These are sold to sound wonderful but there are very few circumstances in which I would say this is the right option for a client. Treat carefully here and consult a professional not selling you something (attorney, accountant, financial advisor) prior to entering into one of these.

  • What Does Renunciation Mean In Estate Planning?

    What Does Renunciation Mean In Estate Planning?

    The formal giving up of a right to serve in a position – personal representative/trustee/executor etc.  This is generally done in writing and filed with the probate office/court or interested parties of a trust.  A renunciation does not generally have the power to name a successor, it is just giving up the right to serve.

  • What Does Real Property Mean In Estate Planning?

    What Does Real Property Mean In Estate Planning?

    Refers to land and any property that is attached to that land; i.e. buildings, homes, etc.
     

  • What Does Probate Estate Mean In Estate Planning?

    What Does Probate Estate Mean In Estate Planning?

    Assets that will go through probate, either through a will or by state law.  This generally does not include property that was jointly owned, payable on death, life insurance, retirements accounts or other assets with beneficiary designations or otherwise already in trust.

  • What Does Probate and Estate Administration Mean In Estate Planning?

     What Does Probate and Estate Administration Mean In Estate Planning?

    A process involving a court/state oversight through which a decedent’s assets (estate) are distributed to the decedent’s heirs/devisees/issue/descendants.

  • What Is A Personal Representative, Executor or Administrator In Estate Planning?

    What Is A Personal Representative, Executor or Administrator In Estate Planning?

    The person who is in charge of probating a decedent’s estate including finding assets, paying creditors and making distributions.  

    You cannot be forced to serve in this position, even if you were specifically named in the Will.

  • What Is Personal and Tangible Property In Estate Planning?

    What Is Personal and Tangible Property In Estate Planning?

    Generally speaking, things you own that can be touched and/or moved.  These are physical items such as jewelry, furniture, art, cars, clothes, books etc.  This does not include physical things that represent intangible items such as stock certificates, savings bonds etc.