Estate Planning & Giving Terms
Estate planning terms cover what happens to what you own — the documents (wills, trusts, powers of attorney), the processes (probate, beneficiary designations), and the taxes that can apply when wealth transfers during life or at death. Charitable giving vocabulary lives here too, since giving is often part of the same plan.
This is vocabulary most people encounter at stressful moments, often for the first time. Knowing the words in advance — what an executor actually does, why beneficiary forms override wills — is one of the cheapest ways to prevent expensive, irreversible mistakes.
5 terms published
- Beneficiary Designation
A beneficiary designation is the form on file with your retirement account, life insurance policy, or bank account naming who receives the money at your death. It overrides your will, which is why an outdated form is one of the most common and costly estate planning mistakes.
- Power of Attorney (POA)
A power of attorney is a legal document authorizing someone you choose (your agent) to act on your behalf in financial or medical matters. A durable POA keeps working through your incapacity, which is precisely when it's needed most, and every POA ends at your death.
- Qualified Charitable Distribution (QCD)
A qualified charitable distribution (QCD) is a direct transfer from an IRA to charity, available starting at age 70 1/2, that counts toward your required minimum distribution and never shows up in your adjusted gross income at all.
- Revocable Living Trust
A revocable living trust is a legal container you create during life to hold your assets. You control everything and can change or cancel it anytime; at your death or incapacity, a successor trustee manages or distributes the assets without probate court involvement.
- Step-Up in Basis
Step-up in basis resets the cost basis of inherited assets to their fair market value on the owner's date of death. Decades of unrealized capital gains simply disappear for income tax purposes, making it one of the most powerful features in the tax code for families passing down appreciated assets.
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The decisions behind these terms
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