Estate Planning Options

Abbreviations, acronyms, slang, metaphors, simile, hyperbole, puns, idioms – all types of figurative languages.  When you think about it, we have so many forms of languages that the basics – English, French, German, Spanish – seem to be lost in the shuffle. 

In Estate Planning, we have many acronyms that are used and I thought that I would share some of them with you and give you a short simple explanation of them. 

SNTSpecial Needs Trust – usually created for the benefit of someone who may be receiving special financial benefits due to a disability.  If the funds were to be paid to the individual outright, they could be disqualified from their benefits.

SLATSpousal Lifetime Access Trusts – Trust utilized for transferring wealth outside of an estate with the opportunity to take advantage of the current federal exclusion while providing the donor limited, indirect access to the trust assets.

GRAT, GRUTGrantor Retained Annuity Trust, Grantor Retained UniTrust – These types of trusts provide for the Grantor to report the income on the trusts while providing for Trust assets to pass to designated beneficiaries upon the Grantor’s death.  There are different payout options within Grantor Trusts – as an annuity or as income. 

DAPTDomestic Asset Protection Trust – The grantor of the trust, as well as designated others, can receive distributions from the trust in the discretion of an independent trustee.

ILITIrrevocable Life Insurance Trust – An irrevocable trust funded with life insurance to avoid having the life insurance considered part of one’s estate and thereby saving estate taxes.

QTIPQualified Terminable Interest Property Trust – a trust benefitting the spouse upon the trustor’s death and then to the children after the death of the second spouse. 

CRTCharitable Remainder Trust – a trust which can benefit the grantor during lifetime with the remainder passing to charities post death.

CLTCharitable Lead Trust – Donor can donate an asset’s income stream for a period of years to a charity instead of to the remainder interest (a third party).

AEAApplicable Exclusion Amount – The amount someone can leave free of estate tax (changes annually).

DSUEADeceased Spouse Unused Exemption Amount – Amount of unused lifetime exemption from estate tax of deceased spouse able to be available for surviving spouse’s use at time of death to minimize federal estate tax.

QPRTQualified Personal Residence Trust – used to transfer interest in residence over a period of years to a designated beneficiary.

These are but a few examples of common estate planning acronyms that are used.  All trusts are not feasible in all situations and, with the help of estate planning counsel, can the identification of appropriate trusts be made given your situation. 

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About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Fiduciary Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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