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Giving

Glossary of Terms

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Administrator
The person appointed by the court to manage one's estate when he or she dies without leaving a will. Administrators have the same duties as executors.

Annuity
A sum of money payable yearly or at other regular intervals.

Appreciated Property
Property, such as real estate or stock, that has increased in value.

Beneficiary
An individual designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan.

Bequest
A gift or legacy left by will, typically personal property or assets.

Charitable Gift Annuity
Typically an agreement in which you transfer cash or other assets to a charitable organization in exchange for its promise to pay you an annuity for life.

Charitable Trust
A trust having a charitable organization as a beneficiary.

Codicil
A legal instrument made to modify an earlier will.

Corporate Fiduciary
An institution that acts for the benefit of another. One example is a bank acting as trustee.

Cost Basis
The original value of an asset, such as stock, before its appreciation or depreciation.

Durable Power of Attorney
A written legal document that lets an individual designate another person to act on his or her behalf, even in the event the individual becomes disabled or incapacitated.

Estate Tax
A tax imposed at one's death on the transfer of most types of property. Currently federal estate taxes are assessed in 2014 on estates worth more than $5.34 million. The maximum estate tax rate is 40 percent.

Executor (or Personal Representative)
The person named in a will to manage the estate. This person will collect the property, pay any debt and distribute your property or assets according to the will.

Fiduciary
A person or institution legally responsible for the management, investment and distribution of funds. Examples include trustees, executors and administrators.

Gift Tax
Tax on gifts generally paid by the person making the gift, rather than the recipient.

Gift-Tax Annual Exclusion
The provision in the tax law that exempts the first $14,000 in present-interest gifts a person gives to each recipient during a year from federal gift taxes.

Grantor
The person who transfers assets into a trust for the benefit of him/herself or others.

Gross Estate
The total property or assets held by an individual as defined for federal estate tax purposes.

Guardian
An individual legally appointed to manage the rights and/or property of a person incapable of taking care of his or her own affairs.

Heritage Circle
Established by the Board of Trustees, the Heritage Circle at Saint Michael's College honors alumni and friends who have thoughtfully remembered Saint Michael's College with a gift in their estate plan or with a life income gift.

Inter vivos Trust
A type of trust created during one's lifetime to hold property for the benefit of him/herself or another person.

Interest
Any right or ownership in property.

Intestate
The term applied when an individual dies without a will.

Joint Ownership
The ownership of property by two or more people, usually with the right of survivorship.

Life Insurance Trust
A trust that has an individual's life insurance policy as its principal asset.

Living Trust (Revocable)
A revocable trust established by a grantor during his or her lifetime in which the grantor transfers some or all of his or her property into the trust.

Living Will
A legal document directing that the maker's or signer's life is not to be artificially supported in the event of a terminal illness or accident.

Marital Deduction
A deduction allowing for the unlimited transfer of any or all property from one spouse to the other (as defined by the IRS) generally free of estate and gift tax.

Power of Attorney
A written legal document that gives an individual the authority to act for another.

Powers of Appointment
A right given to another in a written instrument, such as a will or trust, that allows the other to decide how to distribute the property. The power of appointment is "general" if it places no restrictions on whom the distributees may be. A power is "limited" or "special" if it limits who the eventual distributees can be.

Probate
The court process for determining the validity of a deceased person's will.

Special Needs Trust
A specific type of trust designed to provide benefits for physically or mentally disabled persons without jeopardizing such person's access to and qualification for certain governmental benefits.

Testamentary Trust
A trust that is created upon death by the terms of a person's will or living trust.

Testator
An individual who dies leaving a will or testament in force.

Trust
A written legal instrument created by a grantor for the benefit of him/herself (during life) or others (during life or at death).

Trustee
The individual or institution entrusted with the duty of managing property placed in the trust. A "co-trustee" serves as trustee with another. A "contingent trustee" becomes trustee upon the occurrence of a specified future event.

Unified Credit
A federal tax credit that offsets gift tax and estate tax liability. The amount of the credit for deaths occurring in 2014 is $2,081,800, which is equivalent to a Basic Exclusion Amount of $5.34 million.

Will
A legally executed document that directs how and to whom a person's property is to be distributed after death.

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A charitable bequest is one or two sentences in your will or living trust that leave to Saint Michael's College a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

“I give, bequeath, and devise to Saint Michael’s College, an educational organization established by law at One Winooski Park, Box 256, Colchester, Vermont 05439, whose Federal Tax ID number is 03-0179403 [here follows the dollar amount or percentage of the gift, or an accurate description of the securities, insurance policies, retirement funds, or the amount or percentage of the residual estate, or the real estate or other assets given].”

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Saint Michael's College or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate, or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the gift tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Saint Michael's College as a lump sum.

You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Saint Michael's College as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Saint Michael's College where you agree to make a gift to Saint Michael's College and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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