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Trusts & Estates Glossary: T
TANGIBLE PROPERTY:
Property which can be touched or realized with the senses such as a chair; opposed to intangible property.
TAXABLE DISTRIBUTION:
In general, any distribution which is reported as taxable income to the recipient. As it relates to a generation-skipping trust, any distribution of income or principal to a skip person other than a taxable termination or direct skip.
TAXABLE GIFTS:
Property transferred by gift to the extent that its value exceeds allowable exemptions, exclusions, and deductions.
TAXABLE TERMINATION:
A taxable termination for generation-skipping tax purposes occurs upon the expiration of a beneficiary’s interest in a trust unless (i) immediately after the termination a non-skip person has an interest in the trust, or (ii) at no time after the termination may a distribution of any kind be made from the trust to a skip person.
TAX FREE ROLLOVER:
Provision whereby an individual receiving a lump sum distribution from a qualified pension or profit sharing plan can preserve the tax deferred status of these funds by a "rollover" into an IRA or another qualified plan if rolled over within sixty days of receipt.
TAX ON NET INVESTMENT INCOME:
An excise tax generally of two percent imposed on the net investment income of all tax exempt private foundations with the exception of certain operating private foundations. Net investment income of a private foundation is the amount by which the sum of gross investment income and capital gain net income exceeds certain allowable deductions. If a private foundation makes sufficient charitable distributions in a given year, the excise tax rate is reduced to one percent.
TAX SHELTERS:
Investments made to take advantage of provisions within existing law that take different forms but usually have one or more of the following elements: tax deferral, leverage, and conversion of ordinary income to capital gain at the time of disposition.
TAX WAIVER:
A written consent of the state tax department permitting the withdrawal of property belonging to the estate of a decedent by the executor or administrator, in order to permit the assembling of assets and to permit distribution.
TEMPORARY BONDS:
Certificates, generally without coupon sheets, which serve as evidence of ownership until the final (definitive) bonds have been completed by the printer.
TENANCY:
The holding of real property by any form of title.
TENANCY AT SUFFERANCE:
A tenancy in which the tenant comes into possession of real property under a lawful title or interest and continues to hold the property even after his title or interest has terminated.
TENANCY AT WILL:
A tenancy in which the tenant holds the real property at the Will or pleasure of the owner.
TENANCY BY THE ENTIRETY:
Tenancy by a husband and wife in such a manner that, except in concert with the other, neither husband nor wife has a disposable interest in the property during the lifetime of the other. Upon the death of either, the property goes to the survivor. To be distinguished from joint tenancy and tenancy in common.
TENANCY FOR YEARS:
A tenancy for a definite period of time—for example, a year or 99 years.
TENANCY IN COMMON:
The holding of property by two or more persons in such a manner that each has an undivided interest which, upon his death, passes as such to his heirs or devisees and not to the survivor or survivors; the same as an estate in common; to be distinguished from joint tenancy and tenancy by the entirety.
TENANT:
One who holds or possesses real property.
TERMINABLE INTEREST:
An interest that will terminate or fail on the lapse of time, on the occurrence of a contingency or on the failure to occur of a contingency.
TESTAMENT:
Under the early English law, a term that referred to the disposition of personal property by Will. The words "and testament" are no longer necessary since a Will now relates to both real and personal property.
TESTAMENTARY CAPACITY:
Mental capacity to make a valid Will.
TESTAMENTARY DISPOSITION:
The disposition of property by deed, will, or otherwise in such a manner that it shall not take effect unless or until the grantor dies.
TESTAMENTARY GUARDIAN:
A guardian of a minor or an incompetent person named in the decedent’s will.
TESTAMENTARY TRUST:
A trust established by the terms of a Will.
TESTATOR:
A person who has made and left a valid Will at his death. Compare Settlor. See also Trustor.
THROWBACK RULE:
Distribution by a trust (with some exceptions) of previously accumulated income are taxed in theoretically the same way as the distributions would have been taxed if made when the income was earned by the trust, i.e., "thrown back" to the year earned.
TIME ORDER:
An order for the purchase or sale of a security which, unless executed before the end of a certain day, expires automatically.
"TOTTEN" TRUST:
Trust created by deposit of one’s own money in his own name as trustee for another. Title is vested in the record owner (trustee), who during his life, holds it in a revocable trust for the named beneficiary. At the death of the depositor a presumption arises that an absolute trust was created as to the balance on hand at the death of the depositor.
TRANSFER:
The routine necessary to record a change of ownership of stock or registered bonds, involving a cancellation of the old certificate and issuance of a new one.
TRANSFER AGENT:
An agent of a corporation to effect the transfer of its stock or bonds from one owner to another. A transfer agent for bonds usually is known as a registrar.
TRANSFER IN CONTEMPLATION OF DEATH:
A transfer of property by gift made in apprehension of death arising from some existing bodily condition or impending peril and not the general expectation of eventual decease commonly entertained by all persons.
TRANSFER TAX:
A tax imposed upon the transfer of ownership of stocks and bonds, usually paid by affixing, and canceling, stamps to the certificates or other documents evidencing the transfer of ownership.
TRANSFEREE:
The person or corporation to which property has been transferred.
TRANSFEROR:
The person or corporation which conveys or transfers property.
TRUST:
A fiduciary relationship in which one person (the trustee) is the holder of the legal title to property (the trust property) subject to an equitable obligation (an obligation enforceable in a court of equity) to keep or use the property for the benefit of another person (the beneficiary).
TRUST ACCOUNT:
A general term to cover all types of accounts in a trust department, including estates, guardianships, and agencies as well as trusts proper.
TRUST ADMINISTRATOR:
A person in the employment of a trust institution who handles trust accounts in the sense of having direct contacts and dealings with trust customers and beneficiaries.
TRUST AGREEMENT:
A written agreement between settlor and trustee setting forth the terms of a trust. See also Deed of Trust.
TRUST AUTHORITY:
The legal right of a corporation to engage in trust business.
TRUST BY DECLARATION:
See Declaration of Trust.
TRUST BY ORDER OF COURT:
A trust created by an order of a court of competent jurisdiction.
TRUST COMMITTEE:
A committee of directors or officers or both of a trust institution charged with general or specific duties relating to its trust business.
TRUST ESTATE:
All the property in a particular trust account.
TRUST FOR SUPPORT:
A trust which provides that the trustee shall pay or apply only so much of the income or principal as in its judgment is necessary for the support, including education, of the beneficiary.
TRUST FUNCTION:
The fiduciary capacity in which an individual or a trust institution may act, such as executor, administrator, guardian, or trustee.
TRUST FUND:
Technically, only money held in trust; but frequently applied to all the property held in trust in a given account.
TRUST INSTITUTION:
A trust company, state bank, national bank, or other corporation engaged in the trust business under authority of law. It is a trust institution if any department is engaged in trust business, although other departments may be engaged otherwise.
TRUST INSTRUMENT:
Any writing— will, trust agreement, declaration of trust, deed of trust, or order of court—under which a trust is created.
TRUST INTER VIVOS:
Same as voluntary trust or living trust.
TRUST INVESTMENT COMMITTEE:
A committee of directors or officers or both of a trust institution charged with specific duties relating to trust investments; duties other than those relating to investments may be imposed by the board of directors.
TRUST INVESTMENTS:
The property in which trust funds are invested; a broad term which includes all kinds of property, not securities alone.
TRUST OFFICER:
A title given to certain officers of a trust institution.
TRUSTEE:
An individual or a trust institution which holds the legal title to property for the benefit of someone else.
TRUSTEED PENSION PLAN:
A pension plan in which the corporation’s contributions to the plan are placed in a trust for investment and reinvestment, as distinguished from a plan in which the benefits are secured by life insurance.
TRUSTOR:
A person who creates a trust, a broad term which includes settlor and testator.
TRUST POWERS:
As the term is used in the Federal Reserve Act, authority to engage in the trust business; to be distinguished from the powers of a trustee.
TRUST RECEIPT:
A formal receipt issued by a trustee for property held in trust; used in certain commercial transactions.
TRUST UNDER AGREEMENT:
A trust evidenced by an agreement between the settlor and the trustee.
TRUST UNDER DECREE:
A trust evidenced by a decree of a court of equity.
TRUST UNDER DEED:
A trust evidenced by a deed of conveyance, as distinguished from an agreement; originally confined to real property but now frequently applied to personal property as well.
TRUST UNDER WILL:
A trust created by a valid Will, to become operative only on the death of the testator; opposed to a living trust and the same as testamentary trust.
