Trust Talk
This person or entity holds and administers trust property for the beneficiaries.
Trustee
This tax is imposed on certain transfers of property made during a person’s lifetime rather than at death.
gift tax
This fiduciary duty requires a trustee to put the beneficiaries' interests ahead of the trustee's personal interests.
Duty of loyalty
Dad's will leaves everything to his son, but his IRA beneficiary designation names his daughter. Assuming the designation is valid, this person receives the IRA.
Daughter
This document directs how a person's probate assets will be distributed at death.
What is a Last Will and Testament?
HEMS stands for these four types of beneficiary needs.
Health, Education, Maintenance and Support?
This federal income tax return is generally filed by an estate or non-grantor trust with sufficient taxable income.
1041
A trust portfolio consisting almost entirely of one company's stock should cause the trustee to consider this investment principle.
Diversification
A bank account is owned jointly with right of survivorship. One owner dies. This person generally becomes the owner of the account.
Who is the surviving joint owner?
This document allows another person to handle financial matters on your behalf during your lifetime.
POA
This provision generally restricts a beneficiary from assigning their trust interest and provides protection against many creditor claims before distribution.
What is a spendthrift provision?
For federal estate tax purposes, this alternate date may generally be elected to value estate assets six months after the decedent’s death when statutory requirements are satisfied.
alternative valuation date
A trustee buying trust-owned property personally raises this classic fiduciary concern.
Self dealing
A trust distributes assets “per stirpes.” A child predeceases the settlor but leaves descendants. These individuals generally take the deceased child's share.
deceased child's descendants?
This federal form is the United States Estate (and Generation-Skipping Transfer) Tax Return.
706
This type of power of appointment generally prevents the holder from appointing trust property to themselves, their estate, or creditors of either.
What is a Limited/Special Power of Appointment?
An estate or trust can elect to treat certain distributions made within the first 65 days of a new tax year as if they were made on the last day of the prior tax year. This is known as what?
65 day election
When delegating investment or management functions, a trustee generally has a duty to exercise reasonable care in selecting and overseeing this person or entity.
Agent
Mom receives all trust income for life, with the remaining property passing to the children at Mom's death. The children hold this type of beneficial interest.
remainder interest?
This federal form is used to report certain lifetime gifts and allocations of GST exemption.
709
This technique involves moving assets from an existing irrevocable trust into a new trust with different terms when permitted by applicable law.
Decanting
This federal income-tax concept generally limits the amount of an estate or trust's taxable income that can be carried out to beneficiaries through distributions.
DNI
A trustee discovers that a predecessor trustee may have breached a fiduciary duty and caused a loss to the trust. The current trustee may have a duty to take reasonable steps to pursue this type of action
Redress for breach of trust
A beneficiary is also trustee and may distribute principal to herself only for HEMS. For federal transfer-tax purposes, HEMS is this type of standard.
What is an ascertainable standard?
This tax document is issued to a beneficiary to report their share of an estate or trust’s income, deductions, and credits.
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