Glossary of Terms

Adjusted Gross Income: The total income of an individual in any calendar year, minus certain deductions permitted by law.

Annuitant: One who receives annual payments from an annuity.

Annuity: Specified amount payable over specified period of time.

Appreciated securities: Stocks and/or bonds that have increased in value from when they were first obtained.

Beneficiary: Person named in a Will, Trust or other legal document to receive an income from an estate.

Bequest: Gifts given through a will and given to the named beneficiary(ies) after the death of the will’s maker. Also called a Legacy.

Capital Gains Tax: A tax required on profits recognized from the sale of financial assets that have increased in value since they were first obtained.

Codicil: An addition to a will that either modifies it or annuls part of it.

Estate Tax: A tax on the net value of property plus the sum of “adjusted taxable gifts” at the time of a person’s death.

Gift Tax: A tax imposed on someone who gives money or property to another person.

Grantor: The creator of a trust or other legal instrument.

Gross Estate: Everything in which the deceased person owned an interest at the time of death.

Income Beneficiary: One who is designated to receive a return or income, based on the type of Planned Giving vehicle, such as (pooled income fund, annuity trust, unitrust, etc.)

Insurance Trust: A trust consisting of life insurance policies or proceeds.

Irrevocable Trust/Will: A trust and/or will that cannot be changed or dissolved.

Life Estate: Gift of property in which the donor retains the right to use the property for life.

Life Income Agreement : A specific life income paid to the donor or another person for his or her lifetime(s), for gift of an outright sum, property, or securities.

Life Income Trust: A plan whereby a gift is placed in trust for the lifetime benefit of an income beneficiary, with the remainder going to another beneficiary.

Personal Property : Tangible - jewelry, artwork, antiques, clothing. Intangible - stocks, bonds, notes, patents.

Probate: The process of proving a Will’s validity.

Remainder: The amount remaining in a trust after income payments have ended.

Retirement Accounts: Qualified plans like IRA and 401(k) accounts that permit individual to accumulate savings tax-free for retirement.

Revocable Trust: A trust that can be changed or dissolved at any time by the grantor.

Testamentary Trust: Declares that part or all of an estate be left in trust, with the income or some stated amount to be paid to one or more beneficiaries. Upon the death of the surviving beneficiaries, the principal will be paid to a charitable institution.

Testate: Dying with a valid Will.

Trust: An arrangement whereby property is held by an individual or institution for the benefit of others.

Trustee: The person or institution entrusted to manage someone else’s property.

Trust property: Property held in trust by one person (trustee) for the benefit of another (beneficiary).

Variable income: Payments received on a regular basis that are subject to change, not fixed.

Will: A legal instrument disposing of a person’s property at the time of his or her death.

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