Appendix A: Glossary
| Author | Margaret A. Munro, Kathryn A. Murphy |
| Profession | Has more than 30 years' experience in trusts, estates, family tax, and small businesses/Attorney with more than 20 years' experience administering estates and trusts and preparing estate and gift tax returns |
| Pages | 359-367 |
APPENDIX A Glossary 359
Appendix A
Glossary
administrator: A person appointed by the probate court to administer the estate of a
decedent when the decedent left no valid will.
amortization: Reducing the cost of an intangible asset over its projected life.
ancillary administration: Separate probate of real property in the jurisdiction in which
it’s located.
annual account: All of a trust or estate’s activity for a 12-month period.
annuity: Income paid in a series of payments.
applicable exclusion amount: The total amount exempted from gift and/or estate tax.
applicable federal rate (AFR): The minimum interest rate you must charge on a loan in
order for it to be considered fair market rate.
assets: Items of value owned by any entity, whether an individual, corporation, partner-
ship, trust, or estate.
basis: The acquisition cost of any asset.
benecial interest: The right to receive some benet, prot, or distribution from a trust.
beneciary: The person or entity receiving a benet from an estate or trust.
bequest: A legacy or gift of personal property by will.
bill: Any short-term loan packaged as an investment product and issued with a maturity
of one year or less.
bond (xed-income securities): Any long-term loan packaged as an investment product
and issued with a maturity of more than ten years.
by right of representation: See per stirpes
Charitable Lead Annuity Trust (CLAT): A trust that makes a xed number of annual
payments, calculated as a percentage of the asset value as of the date of the grantor’s gift
into the trust, to charity. At the end of the lead period, the remaining assets are distributed
to non-charitable remaindermen.
Charitable Lead Unitrust (CLUT): A trust that makes a xed number of annual payments
to charity, calculated on a percentage of the assets valued on the second business day
of each year. At the end of the lead period, the remaining assets are distributed to
non-charitable remaindermen.
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