An accumulation and maintenance trust is a type of discretionary trust designed to allow for the accumulation of income until certain beneficiaries reach a specified age, at which point the income is applied for their maintenance, education, or benefit.
Beneficial interest refers to the right to benefit from assets held in a trust, distinguished from the legal ownership held by the trustee. It pertains to the income or principal of the trust fund, directly influencing the beneficiary.
A beneficiary is a person or entity who is designated to receive benefits or assets from trusts, wills, insurance policies, or other financial instruments.
A bequest is a gift made through a will, which dictates the transfer of property or assets from a deceased individual to beneficiaries.
Bona fide refers to actions done in good faith, honestly, and without collusion or fraud. In legal contexts, a bona fide purchaser for value is someone who buys property without knowledge of any prior claims on it.
A charitable trust is a type of trust that is established to provide financial support to one or more charitable organizations, aimed at fulfilling philanthropic goals and benefiting the public.
A complex trust is a type of trust that can either distribute or retain income according to its governing instrument or state law, or has a charitable beneficiary. It is entitled to only a $100 exemption.
The conduit approach allows income or deductions to flow through to another entity, such as a partnership or trust, enabling tax liabilities to be managed at the beneficiary or partner level.
A connected person refers to individuals or entities that are related to a director under the Companies Act, with implications for disclosure requirements.
The term 'Corpus' refers to the principal or res of an estate, trust, devise, or bequest from which income is derived, consisting of funds, real estate, or other tangible or intangible property. In civil law, it refers to a positive fact, as distinguished from a possibility.
A Discretionary Trust is a type of trust where the shares of each beneficiary are not fixed by the settlor but can be varied at the discretion of the trustees or another appointed person.
A donor is an individual or entity that provides a gift or transfers a power, right, or interest, often in the context of creating a trust or other legal arrangement.
An ESOT, or Employee Share Ownership Trust, is a type of employee benefit plan designed to provide employees with an ownership interest in the company.
An Employer Identification Number (EIN) is a unique Taxpayer Identification Number (TIN) assigned to entities other than individuals, such as partnerships, corporations, estates, and trusts. The EIN is used for the purpose of identifying businesses and certain other entities for tax reporting.
Estate planning involves the orderly handling, disposition, and administration of an estate when the owner dies, including drawing up wills, setting up trusts, and minimizing taxes.
Estate planning distribution involves the management and allocation of a person's assets during their lifetime and after their death, ensuring a systematic transfer of property to beneficiaries.
An exit charge is the tax imposed under inheritance tax regulations when an asset is removed from a discretionary trust.
A general power of appointment allows holders the right to dispose of property in their favor or that of their estate, creditors, or the creditors of their estate. It impacts how a grantor is taxed on the trust income.
A Generation-Skipping Transfer (GST) involves the transfer of financial assets or property to a recipient who is more than a single generation removed from the transferor, potentially incurring the generation-skipping tax (GSTT).
Income splitting involves distributing income among family members, trusts, or various business entities to potentially benefit from lower tax rates or threshold amounts. This practice is commonly associated with filing joint returns for married couples but can also include giving income property to children or utilizing multiple trusts or business structures.
An industrialist is an individual involved in the business of industry. The term evolved from the early industrial period, where large trusts and monopolies were formed by a group of business people referred to as industrialists.
A person who dies without having made a will. The estate, in these circumstances, is divided according to the rules of intestacy. The division depends on the personal circumstances of the deceased.
A life beneficiary is a party entitled to the use of or income from property during their lifetime. Upon their death, the property's benefits typically pass to another individual, often referred to as a remainder person.
A pass-through entity is a non-taxable business structure where income or expenses are passed directly to the owners, retaining their original character.
An individual, trust, estate, partnership, association, company, or corporation having certain legal rights and responsibilities.
A power of appointment is a legal authority granted to an individual (the appointor) allowing them to designate who will receive certain property or interests, typically within the contexts of trusts and estates.
Powers of appointment refer to the authority granted to an individual, referred to as the donee or appointee, to designate the distribution of certain property or assets, either held in a trust or as part of an estate. This power can affect estate planning significantly.
A primary beneficiary is the individual or entity first in line to receive benefits from a trust, retirement account, or life insurance policy upon the policyholder's death.
A QTIP trust allows a grantor to provide income for their surviving spouse and designate other beneficiaries for the remaining trust assets after the surviving spouse's death.
A relevant property trust is defined for inheritance tax purposes and involves taxation upon creation, distribution, and every tenth anniversary. It excludes interest-in-possession trusts, 18--25 trusts, or trusts for bereaved minors.
Remainder interest refers to the future interest in an estate that becomes possessory when a preceding life estate or similar limited estate terminates. The holder of this interest is called the remainderman.
A remainderman is the beneficiary entitled to the remainder or residue of an estate once expenses, specific legacies, and inheritance taxes have been satisfied. This term often comes into play in the context of trusts and will estates, designating who receives property after the preceding estate benefits or interest.
A revocable beneficiary is a designated individual or entity that can receive benefits from a life insurance policy, trust, or other financial product, and whose designation can be changed or revoked by the policyholder or grantor at any time.
Schedule K-1 is a tax document used to report the incomes, deductions, and credits of partnerships, S corporations, estates, and trusts for tax purposes.
Settled property refers to property that is included in an interest-in-possession trust, where beneficiaries have the right to benefit from the property during their lifetime.
A set of statutory provisions under which income arising from property that has been gifted is taxed as if it were income of the donor and not of the donee.
Shares of Beneficial Interest are proof of an individual's rights and interest in the assets held in a trust or other legal entity.
A simple trust is a legal arrangement under which the trust must distribute all of its income to beneficiaries annually. It is subject to specific tax regulations and benefits from a $300 standard deduction.
Subchapter J of the Internal Revenue Code concerns the taxation provisions related to estates, trusts, beneficiaries, and decedents. It outlines the rules and regulations for income distribution, fiduciary responsibilities, and tax computation for these entities.
A trust deed is a legal document that outlines the terms and conditions of a trust, typically including the names of the trustees, the identity of the beneficiaries, the nature of the trust property, and the powers and duties of the trustees.
The Uniform Gifts to Minors Act (UGMA) is a legislative framework adopted by most U.S. states to govern the distribution and administration of assets gifted to minors. It allows minors to own assets without requiring the services of an attorney to establish a special trust.
