AGENCY - A relationship in which a client (the principal) engages the bank (the agent) to perform specific services.
BENEFICIARY - The person for whose benefit a trust is created.
CHARITABLE REMAINDER TRUST - A trust that pays an income or annuity to the beneficiaries. The property in trust goes to charity upon death of the beneficiaries
CODICIL - An amendment or supplement to a will executed with all the formalities of the will itself.
CONSERVATORSHIP - A court-appointed arrangement to protect the estate of an incapacitated person.
CONTINGENT BENEFICIARY - The beneficiary whose interest is conditioned upon a future that may or may not take place.
DEFINED BENEFIT PLAN - A pension plan that guarantees the payment of a specified benefit at retirement age and provides annual contributions equal to an actuarially determined amount sufficient to produce the specified benefit.
DEFINED CONTRIBUTION PLAN - A Qualified Retirement Plan that provides for an individual account for each participant and for benefits based upon the amount contributed to the participant's account including any income, expenses, gains or losses.
DECEDANT - One who is descended in a direct line from another however remotely related (child, grandchild, great-grandchild).
ESCROW - An agency service that holds assets or documents on behalf of two or more persons to be delivered on a specific contingency or certain occurrence.
ESTATE SETTLEMENT - The process of distributing a decedent’s property. If the decedent died testate, specific legal steps must be taken before the property can be disbursed. If the decedent died interstate, the state imposes a law of succession on the distribution, which may not reflect the decedent’s wishes. If there are no heirs or beneficiaries, the estate may be revert to the state.
ESTATE TAX - A tax imposed on a decedents estate as such and not on the distributive shares of the estate or on the right to receive the shares; to be distinguished from an inheritance tax.
EXECUTOR - A personal representative named in will to settle the decedent’s estate.
FIDUCIARY - An individual or a trust institution charged with the duty of acting for the benefit of another party for issues coming within the scope of the relationship between them. The relationship between a guardian and his ward, an agent and his principal, an attorney and his client, one partner and another partner, as well as a trustee and a beneficiary; each is an example of fiduciary relationship.
401(k) PLAN - A form of qualified retirement plan that allows a employee to defer a percentage of their salary on a pre-tax basis.
GIFT TAX - A tax imposed by the federal government since 1932 and by some states on transfers of property by gift during the donor's lifetime. Gifts, under this law, may include revocable living trusts.
GRANTOR - A person who transfers property by deed or who grants property rights by means of a trust instrument or some other document. Also called a trust or settlor.
GRANTOR TRUST - For purposes of the income taxation of trusts and estates. A trust in which the grantor or third party, because of certain rights to income or principal or certain power over the disposition of income and principal, is treated the owner of the trust and taxed on the income thereof. Consequently, a grantor trust is not treated as a separate entity for income tax purposes.
INCOME BENEFICIARY - The beneficiary of a trust who is entitled to receive the income from it.
INHERITANCE TAX - A tax on the right to receive property by inheritance; to be distinguished from an estate tax.
IRREVOCABLE TRUST - A trust in which the grantor does not have the power to terminate the agreement. A trust may be irrevocable for a given time and then become revocable, or may be revocable for a stated period and then become irrevocable.
LIVING TRUST - A trust that becomes operative during the lifetime of the grantor; as opposed to a trust under will.
LIVING WILL - Declaration relating to the sustaining of life by artificial means.
PROBATE - Court-supervised process of administering a decedent’s estate; allows for transfer of decedent’s property pursuant to the terms of descendant’s will or the laws of interstate succession. Includes only property owned in the name of the decedent (not joint property, contacts, IRA's, insurance policies, etc.)
REMAINDER BENEFICIARY - The beneficiary of a trust who is entitled to the principal outright after the interest of the prior beneficiary had been terminated.
REVOCABLE TRUST - A trust in which the grantor reserves the power to alter or terminate the trust. The grantor may assign this right to someone else.
SUCCESSOR TRUSTEE - A trustee following the original or prior trustee, the appointment of whom is provided for in the trust instrument.
TESTAMENTARY TRUST - A trust established by a will and inoperative until the death of the testator.
TRUST - A fiduciary relationship in which one person (the trustee) is the holder of legal title to property (the trust property) subject to an equitable obligation (an obligation enforceable in court of equity) to keep or use the property for the benefit of another person (the beneficiary).
TRUSTEE - An individual or a trust institution that holds the legal title to property for the benefit of someone else.