Appreciated Assets - Assets that have a higher market value than their basis or tax purpose value. Such assets would, if sold by an individual or non-charitable organization at a price higher than their basis, potentially generate a taxable capital gain (either long-term or short-term depending on the holding period).
Beneficiary - the person and/or organization that receives the benefits of the trust.
Bequest – A gift of property or assets as defined in your Will or Living Trust. It will not affect cash flow during your lifetime and it’s easy to revoke if your situation changes.
- Specific bequest: leaves the recipient a determined amount of money or an identified asset.
- Residuary bequest: the recipient receives all or a portion of the assets left after the specific estate gifts have been paid out.
- Contingent bequest: designates a recipient of all or a portion of your estate upon satisfaction of a specific condition.
Charitable Gift Annuity (CGA) – A donation which also provides income for the annuitant and a second beneficiary, if any. The annuitant (the person providing funds to the charity) receives a contract or agreement from the charity, which states that the charity will pay the annuitant a guaranteed fixed income for life (lives) with payments to start immediately or at some set future time.
Charitable Lead Trust - An annuity or unitrust income interest is distributed each year to the designated charitable beneficiary and the assets are eventually transferred to the trustor's or grantor's designated non-charitable beneficiary(ies).
Charitable Remainder Trust - Set up to pay a fixed rate of return based on the initial valuation at the time the property is placed in the trust. The trust assets are valued initially, at the time the property is placed in the trust. The trust assets are never revalued.
Charitable Remainder Unitrust - A popular way to achieve tax benefits as well as a fixed annual percentage on the value of the assets in the trust. The assets are revalued annually and, if the trust value changes, the payment to the beneficiary(ies) changes.
Codicil - A written change or amendment made to a will.
Pooled Income Fund - Also called a Charitable Remainder Pooled Income Fund- is an investment fund much like a mutual fund. It is made up of transfers by many persons to the fund, who receive life income interest in exchange for their transfers, based on the value of the transfer into the fund and based on the income earned by the fund.
Trustor - the individual who establishes the trust. Also referred to as the Grantor and/or Settlor.
Will - the legal expression or declaration of a person's mind or wishes as to the disposition of the person's property, to be performed or take effect after the person's death.