Quiz 7 Vocab - Test 2 Flashcards Preview

LAS206 - Probate > Quiz 7 Vocab - Test 2 > Flashcards

Flashcards in Quiz 7 Vocab - Test 2 Deck (16):
1

revocable trust

The Trustor has the right to change, amend or terminate the trust at any time during their lifetime.

2

irrevocable trust

A trust which cannot be revoked or recalled by the Trustor.

3

spendthrift trust

A trust created to provide a fund for the maintenance of a beneficiary and that places the trust beyond the reach of the beneficiary’s creditors.

4

discretionary trust (sprinkling trust)

A Trust that gives the trustee sole discretion to make the determination as to how the trust assets are distributed.

5

marital deduction

A deduction which allows a deceased spouse to pass all of his or her property to his or her surviving spouse with no federal tax consequences whatsoever.

6

marital deduction trust (A/B trust)

Two trusts, the ‘A’ trust receives all assets left directly to the surviving spouse, the ‘B’ trust is funded with the deceased souses exemption amount.

7

qualified terminable interest trust (QTIP)

used by couples who have children from previous marriages. Trust provides income for surviving spouse then testator’s children receive assets from trust.

8

irrevocable life insurance trust (ILIT)

An irrevocable trust funded by life insurance proceeds. The Trustor is the insured, the trustee is the beneficiary.

9

crummy trust/crummy powers

money that is put in trust that is equal to the amount of the gift tax exclusion, to which the beneficiary has the right to withdraw for 30 days.

10

charitable trusts

A trust set up to benefit the public at large rather than individuals.

11

charitable remainder trust

A trust set up to benefit the Trustor, or beneficiaries, but upon the death of the Trustor or the beneficiaries, the principal of the trust is distributed to a named charity.

12

Cy Pres Doctrine

Means “as near as possible”. If a person leaves property in trust for a charity but at the time of transfer the charity no longer exists, it will go to the charity with the same or similar purpose.

13

Special needs trust

A trust established for the benefit of a beneficiary who is a person with mental or physical disabilities.

14

honorary trust

non-charitable trusts with no beneficiaries. An example of thee would be trusts for the maintenance of cemetery plots.

15

pet trust

A trust wherein an amount of money is left in trust for the benefit and care of a pet.

16

usufruct

The use and enjoyment of property which is vested another.