Page 15 - Accumulating, Preserving, and Passing Wealth | Stifel

Community Property – A form of property ownership for husband and wife that is recognized in nine states. One of the
primary benefits of community property is the full step-up in basis to the fair market value that occurs upon the death
of either spouse. Community property states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas,
Washington, and Wisconsin.

Conservator – An individual or entity appointed by the court to administer the financial affairs of a minor or incapacitated
adult.

Credit Shelter Trust – A trust that uses an individual’s estate and gift tax exemption.

Crummey Trust – An irrevocable trust used to qualify gifts to the trust for the annual exclusion ($15,000 for 2019). Each
time a contribution is made, the beneficiary must be given the temporary right to demand withdrawals from the trust assets
equal to the value of the gift. Commonly used in the context of an irrevocable life insurance trust.

Disclaimer – The refusal or rejection of any right, interest, or property that was offered to a person. Taxpayers have up to
nine months from the time the gift was made to disclaim an asset (in an estate, the time is nine months from the date of
death).

Durable Power Of Attorney – See Power of Attorney.

Estate Taxes – A federal tax imposed on the value of property owned by the decedent at death.

Estate and Gift Tax Exemption – The amount an individual can transfer during life or at death before owing estate or gift
taxes. In 2019, this exemption is $11,400,000 per individual.

Executor – Person or institution named in a will to carry out the instructions of the will (female is Executrix). Also called
personal representative.

Family Partnership – A voluntary contract between family members (i.e., spouse, ancestors, and lineal descendants) for tax
purposes. There are typically two types of interests created: general partner and limited partner interests. The partnership
generally provides a way to transfer assets to family members while maintaining control. There may also be discounts
applied to the value of the transferred interest, thus providing an opportunity to leverage the gift. Congressional budget
proposals cast doubt on the long-term use of the family partnership in transferring marketable securities and other non-
business assets.

Fiduciary – One who has the legal duty to act primarily for another’s benefit. Implies great confidence and trust and a high
degree of good faith (usually associated with a trustee).

Form 706 – IRS Estate Tax Return.

Form 709 – IRS Gift Tax Return.

Form 1041 – IRS Estate and Trust Income Tax Return.

Gift Tax – A tax imposed on transfers of property during the donor’s lifetime.

Grantor – The person who sets up or creates a trust. Also referred to as settlor, trustor, or creator.

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