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Glossary of Terms
Administrator

An administrator is a person appointed by the court to settle the estate of a person who dies without a will or with a will that does not designate an executor.

Administrator C.T.A.          

An administrator of an estate other than a named executor in a will.  An administrator C.T.A. serves when all named executors are not able to serve due to a death, incapacity or renunciation of their right to serve.  “Cum testament annexo” C.T.A., means, “with the will annexed”.

Advance Medical Directive

An advance medical directive is a document that provides instructions concerning a person’s healthcare if that person cannot give those instructions themselves.  There are two different types of advance medical directives; the first is a living will that gives instructions concerning a person’s healthcare if the person is dying, the second is a medical power of attorney that appoints an agent to make healthcare decisions for a person who is incapable of making those decisions themselves.  Frequently, an advance medical directive will include both a living will and a medical power of attorney.

Advocate

One who pleads the cause of another.

Aid and Attendance (A&A)

A&A benefits are those provided when a veteran requires the aid of another person in order to perform personal functions required in everyday living, such as bathing, feeding, dressing, attending to the wants of nature , adjusting prosthetic devices, or protecting himself/herself from the hazards of his/her daily living environment.  Entitlement to A&A benefits also may be provided when a claimant is bedridden, a patient in a nursing home due to mental or physical incapacity, or when blind.

Annuity

An insurance-based contract that provides future payments at regular intervals in exchange for a lump-sum premium paid when the annuity is purchased.  It’s a strategy for lifetime income in retirement.

Applicable Exemption Amount

The Applicable Exemption Amount (also known as the Unified Credit) is the amount of money that you can give away during your life or at your death without paying a federal gift or estate tax.  In 2013 this amount is $5million.

Beneficiary

A beneficiary is a person who benefits from a trust or a will.  A Beneficiary may also be a person or party named by the owner of a life insurance policy or investment account to receive the proceeds in the event of the owner’s death. 

Bond

A written document in which the issuer formally recognizes an obligation to pay money in the event he or she does not properly perform his or her duties.  In order to be appointed a fiduciary, a court will frequently require that a fiduciary acquire a form of insurance, known as a surety bond, to protect the assets of the deceased incapacitated in the event of financial mismanagement or theft. 

Care Management

All encompassing management provided by a care manager on behalf of a client.  The client and the care manager discuss the needs of the client and the extent to which the care manager is able to intervene on behalf of the client.  This can include areas of financial assistance such as bill paying, medical assistance, such as escorting a patient to a doctor’s appointment or setting up in-home health care, liaison between distant family and a client, or acting on behalf of a client who resides in a care facility. 

Certificate of Qualification

A Certificate of Qualification. Sometimes referred to as “Letters Testamentary”, is the paper that a personal representative receives from the Clerk of the Court at the time of qualification which states that a person has qualified as an executor or administrator and has authority to act on behalf of the estate.

Certified Copy

A copy of a document or record, signed and certified as a true copy by the officer to whose custody the original is entrusted.

Codicil

A supplement or an addition to a will; it may explain, modify, add to, subtract from, qualify, alter, restrain or revoke provisions in an existing will.

Commissioner of Accounts

Person(s) appointed by the Court to monitor the reports and activities of personal representatives acting in a fiduciary capacity, which would include a conservator.

Community Resources

Any agency, company, facility, or service in the community that provides assistance to support independence for those at risk.

Community Spouse

The spouse of an individual residing within an institution who themselves lives in the community or an assisted living facility.

Community Spouse Resource Allowance (CSRA)

Medicaid Regulations provide that a Community Spouse is entitled to retain a portion of the couple’s assets.  The amount is determined by dividing the combined assets of the husband and wife as they existed on the “snapshot date”, including joint assets, and dividing by two.  The Community spouse  amount has a floor of $23,184 and a ceiling  of $115,292.  (2013)

Conservator

A person appointed by the Court who is responsible for managing the estate and financial affairs of an incapacitated person.  (See also Guardian)

Conservatorship

In many states, this term is synonymous with guardianship.  In many jursidictions, a conservatorship only provides for financial and property management, It does NOT allow for decision making as to an individual’s personal or medical needs.  (See also Guardianship)

Continuum

Continuity and consistency of care information provided to family, professionals, and community resources.

Countable Resources

All assets owned by an institutionalized individual (and his or her Community Spouse).  These countable resources include but are not limited to bank and brokerage accounts; CD’s; certain real property; cash value of life insurance policies with a face value in excess of $1,500; IRA’s; stocks; bonds; etc.

Creditor

Person or organization owed money.

Credit Shelter Trust

A credit shelter trust is a trust designed to take advantage of the deceased’s Applicable Exemption Amount, but retain the assets in trust for the benefit of a surviving spouse.

Crummey Trust

See Irrevocable Life Insurance Trust, below.

D(4)(a)  Supplemental or Special Needs Trust

Congress authorized the creation of d(4)(a)  supplemental or special needs trusts with the assets of a disabled person.  The assets in a d(4)(a) trust are not considered countable resources for determining the benficiary’s SSI or Medicaid eligibility.  The trust must be: (1) irrevocable, (2) established for a disabled person under age 65, (3) created by the disabled person’s parents, grandparents, guardian, or by a court.  At the death of the disabled person the trust must repay to the state any assets remaining up to the amount paid under the Medicaid program on behalf of the disabled person.

D(4)(c) Supplemental or Special Needs (“Pooled”) Trust

Congress authorized the creation of d(4) (c)  supplemental or special needs trust with the assets of a disabled person.  The assets in a d(4)(c) trust are not considered countable resources for determining the beneficiary’s SSI or Medicaid eligibility.  The trust must be: (1) created by and managed by a nonprofit organization, (2) maintained in a separate account for each beneficiary, (3) created by the disabled person, the disabled person’s parents, grandparents, guardian, or by a court.  At the death of the disabled person the trust must repay to the state any assets remaining up to the amount paid under the Medicaid program on behalf of the disabled person, or leave the assets in the trust for the benefit of other disabled persons.

Decedent

Deceased person.

Disclaimer

A disclaimer is an instrument by which one refuses to accept a gift of property.

Disclaimer Trust

A disclaimer trust is frequently used to permit a surviving spouse to fund a credit shelter trust with the amount of property necessary to limit the size of the surviving spouse’s estate to the Applicable Exemption Amount.

Durable Power of Attorney

A durable power of attorney is an instrument by which a person, known as the principal, designates another person, known as the agent, to manage the principal’s assets or affairs.  Unlike a common law power of attorney, the durable power of attorney does not terminate if the principal becomes incapacitated or disabled.  A durable power of attorney can be effective upon execution (“immediately effective”) or effective upon the principal’s incapacity or other event (‘springing”).

Disability Pension

A disability pension is a public benefit provided those unable to earn a livelihood because of permanent and total disability.  Disability pensions from the Veteran’s  Administration are restricted to those veterans with wartime service.

Estate

A deceased’s property, including real estate, personal property and all other assets owned or controlled by the deceased at the time of his/her death.

Estate Tax

An estate tax is a state or federal tax imposed at the deceased’s death, upon the deceased’s property.

Executor

An executor is a person named in a will to settle the deceased’s estate and to distribute the deceased’s estate in accordance with the terms of the deceased’s will.

Family Limited Partnership or Family Limited Liability Company

A family limited partnership or a family limited liability company is an entity created to provide centralized management and investment of family assets.  They are taxed as partnerships for income tax purposes and provide discounts in valuation for gift and estate tax purposes.

Fiduciary

A fiduciary is a person who manages the assets or affairs of another person; a general term used to refer to executors, administrators, trustees, guardians, conservators, and agents.  A fiduciary is required to follow the instructions contained in the instrument that appointed the fiduciary and the various laws that pertain to fiduciaries, such as the Prudent Investor Act and the Uniform Principal and Income Act.  A fiduciary owes certain duties to the beneficiary.  Theses duties include the duty of loyalty, to use due care, to avoid conflicts of interest and to provide information.  A fiduciary who violates the instructions in the governing instrument, applicable laws, or fiduciary duties is liable to the beneficiary for any damages that the beneficiary suffers as a result of the violation.

Five ADL’s (Activities of Daily Living)

· Toileting
· Bathing
· Dressing
· Transferring
· Eating

Gift Tax

A gift tax is a state or federal tax imposed on a donor when the donor makes a gift of property.

Grantor

A grantor is the person who establishes the trust and transfers assets to create the trust.

Guardian ad Litem

When a petition for guardianship is filed, the court must feel satisfied that the proposed incapacitated person is indeed mentally incapacitated and that the proposed guardian is the individual best suited to act on behalf of the proposed incapacitated.  As such, an attorney is always appointed as Guardian ad litem, to represent the proposed incapacitated and advocate their interests.

Guardian

A person appointed by the court who is responsible for the personal affairs of an incapacitated person, including responsibility for making decisions regarding the person’s support, care, health, safety, habilitation, education, therapeutic treatment, and resident, (See also Conservator)

Guardianship

A guardianship is a legal proceding held to appoint a guardian and overseer for the personal and medical well-being of a minor or a mentally incapacitated adult. (See also, Conservatorship)

Hearing Date

In order to establish a guardianship or conservatorship, pleadings are filed with the Court in the community in which the adult incapacitated person resides.  The hearing date is the day on which the court will hold a hearing to establish a guardianship or conservatorship.  All interested parties are sent a notice of the hearing.

Heirs at Law

Person(s) who would inherit a deceased’s estate if the deceased died without a will.

Holographic Will

A will written entirely by the testator in his/her own handwriting.

Housebound

Entitlement to Housebound benefits exists when the claimant is permanently and substantially confined to his/her immediate premises due to medical disability.

Incapacitated

An individual whose personal, medical and financial decisions are made by a third party, namely a guardian or conservator.  In the case of a minor, these decisions must be made by a guardian or conservator because the minor has not yet attained the age of majority (18).  In the case of an adult, these decisions are made because the individual was either born with a developmental disability or became mentally incapacitated after birth or as an adult.

Incentive Trust

An incentive trust is a trust created to provide an incentive to the beneficiary to avoid certain conduct or to induce the beneficiary to engage in certain conduct.  For example, an incentive trust could provide for: (1) a suspension of distributions if a beneficiary becomes addicted to or abuses drugs or alcohol, or (2) provide distributions to a beneficiary if the beneficiary obtains an education or is gainfully employed.

In Kind Support and Maintenance

In kind Support and Maintenance, (ISM) is food, clothing and shelter furnished to a disabled individual.  ISM payments do affect the amount of any SSI payments.

Institutionalized Spouse

A spouse who will be resident in a Skilled Nursing Facility.  (see also, Community Spouse)

Intestate Estate

An estate administered without a will.

Inventory

A detailed list of articles; a list or schedule of property, containing a designation or description of each specific article.

Irrevocable Life Insurance Trust (ILIT)

An irrevocable life insurance trust is a trust which is the owner and beneficiary of a life insurance policy insuring the life of the grantor.  The trust agreement will frequently contain “Crummey” withdrawal powers for the beneficiary to ensure that gifts to the trust qualify for the gift tax annual exclusion. Provided that the grantor never owned the life insurance in the trust or transferred ownership of the life insurance to the trust more than three years prior to his or her death, the face value of the life insurance will not be included in the grantor’s taxable estate for estate tax purposes.

Irrevocable Trust

A trust that you have no power to amend or revoke.  Irrevocable trusts have the disadvantage that they require that you not retain control, but they can provide significant tax benefits.  The more common irrevocable trusts are “Irrevocable Life Insurance Trusts” and “Charitable Remainder Trusts”.  Compare to Revocable Trust.

Living Trust

A trust that you set up while you are living.  Compare to “Testamentary Trust”.

Living Will

See Advance Medical Directive, above.

Lookback

For all transfers of assets made prior to February 8, 2006, federal law provides for a 36-month lookback on transfers to individuals, and a 60-month lookback for transfers to trusts.  For all transfers made AFTER February 8, 2006, Federal Law provides for a 60-month lookback.  This means that when an application is made for Medicaid, applicants will be asked if there have been any transfers of assets made within the previous 60 months.  Any such transfers must be disclosed to Medicaid.  Failure to do so constitutes Medicaid Fraud, which is a criminal expense.

Marital agreements

Marital agreements are agreements between married persons for the purpose of settling the rights and obligations of either or both of them.  These rights and obligations may include (1) their rights in any property, (2) the disposition of property upon their separation, divorce or death, (3) spousal support, (4) the making of a will, and (5) any other matter not in violation of the law or public policy.

Medicaid

Medicaid is a government medical assistance program that pays for medical benefits.  It is a ‘means tested’ program with income and asset limits for purposes of determining Medicaid eligibility.

Medical Power of Attorney

See Advance Medical Directive, above.

Minimum Monthly Maintenance Needs Allowance (MMNA)

A Community Spouse is entitled to a monthly income of between $1,891 and $2,898 in 2013.   To the extent that the spouse’s monthly income is less than this amount, a supplement can be obtained from the Institutionalized Spouse’s income.

Net Worth for Veterans’ Benefit

Net Worth means the net value (gross value less debts and liabilities) of the assets of the veteran and his or her dependents.  It includes such assets as bank accounts, stocks, bonds, mutual funds and any property other than the  residence and a reasonable lot area.

Non-Countable Resources

Certain assets are non-countable.  For example, a principal residence is non-countable so long as it is occupied by the Community Spouse or certain other persons.  Other non-countable assets include one automobile; household or personal effects; wedding ring and engagement ring; medical equipment needed by an institutionalized person or a member of his/her household, irrevocable pre-paid funerals, and inaccessible assets.

Nursing Home

A privately operated establishment providing rehabilitation or skilled nursing care for persons who are unable to care for themselves properly.

Pension (VA)   

A pension is a needs-based  benefit paid to a veteran because of permanent and total non-service-connected (NSC) disability, OR to a surviving spouse or child because of a wartime veteran’s death.

Personal Representative

A term used to mean either the executor or the administrator of an estate.        

Per Stirpes Distribution

Gifts or distributions to a deceased person’s descendants  “equally among offspring , are made by dividing the assets into as many shares as there are then-living children of the deceased person as well as any deceased children.  Each then-living child is given one share, and the share of each deceased child is divided among the child’s then-living descendants in the same manner.

Pour-Over Will

A will that passes assets from you probate estate to your trust.

Power of Attorney

A document in which you delegate to an attorney-in-fact or agent  your authority to administer your assets and make legal and financial decisions.  Powers of attorney can be effective immediately upon their execution (signing) by you, or “springing”, that is, effective only upon a triggering event such as a certification of your incompetency.  The power of attorney used for estate planning is a “general”’ power of attorney, meaning it gives your attorney-in-fact virtually unlimited power (as opposed to a “specific” or “limited” power of attorney, which would only allow your attorney-in-fact to do one thing, such as sell real estate for you)’  the power of attorney used for estate planning is also always “durable”, meaning that it remains effective after you become incompetent, which of course is the main reason for having the document.

Premarital Agreement

A premarital agreement is an agreement between prospective spouses made in anticipation of and to be effective upon their marriage.  The purpose of the agreement is to settle the spouses’ rights and obligations with respect to: (1) their rights in any property of either or both of them, (2) the disposition of property upon separation, divorce or death, (3) spousal support, (4) the making of a will and (5) any other matter not in violation of the law or public policy.

Probate

Probate is the judicial process by which an instrument is proven to be the deceased’s will.  It is also frequently used to refer to the judicially supervised administration of the deceased’s estate.

Probate estate

Everything you own at the time of your death, except certain assets, most commonly (1) assets owned by a living trust; and (2) assets which will pass by contract or operation of law to a beneficiary or joint owner at your death.  Compare to “Taxable Estate”.

Probate tax

The probate tax is a state tax imposed on the deceased’s estate under the control of an executor or administrator.

Q:TIP Trust

A Q:TIP trust is a qualified terminal interest property trust. A Q:TIP trust requires the trustee to distribute all of the income of the trust to a surviving spouse.  It may permit the trustee to make principal distributions only to the surviving spouse.  The Q:TIP trust qualified for the estate tax marital deduction and is frequently used by persons in a second marriage who wish to preserve the trust principal for children by a prior marriage.

Qualification

A procedure whereby a person is appointed by the clerk of the court to serve as an executor or administrator of a decedent’s estate.

Residency

Determined as the county or city in which the person maintains a permanent residence.

Revocable Living Trust

A revocable living trust is a trust designed to dispose of the deceased’s assets at the deceased’s death in order to avoid the probate process.  It is a substitute for a will.

Revocable Trust

A trust in which you retain the right to amend or revoke at any time.  Compare to “Irrevocable Trust”. 

Rollover

A method by which an individual can transfer the assets from one retirement program to another without the recognition of income for tax purposes.  The requirements for a rollover depend on the type of program from which the distribution is made and the type of program receiving the distribution.

Self-Proved Will

A will that includes a notarized affidavit of the testator and attesting witnesses. 

Snapshot date

A snapshot of the couple’s assets is taken as of the first day of the first month of continuous institutionalization  for a period of more than 30 days or the date of the Medicaid application, whichever occurs first.

Special Needs

Special needs are those needs of the beneficiary over and above food, clothing and shelter.  Examples of special needs are non-refundable airline tickets, a stereo system, television, medical insurance, telephone bills, newspaper subscriptions, furniture, services of a care manager, vacations, travel expenses of relatives, movies, tax payments, medical treatment for which public funds are unavailable, the difference between private and semi-private room rates in an institution, handicap van, school tuition, books and supplies, and health and life insurance premiums. 

Spendthrift Trust

A spendthrift trust is a trust that is designed to protect a trust’s  assets from a beneficiary’s creditors.

Supplemental Security Income (SSI)

SSI is an income maintenance program funded by the federal government and administered by the Social Security Administration.  Some states provide a small supplement to the SSI benefit.  SSI is a means-tested program which imposes limits on the income and assets of an SSI recipient for eligibility purposes.

Supplemental or Special Needs Trust (SNT)

An SNT is a trust created for the benefit of a beneficiary who receives SSI or Medicaid.  The trust is drafted to provide discretionary benefits to the beneficiary, but to avoid becoming a countable resource that would negatively affect a beneficiary’s SSI or Medicaid eligibility.

Tangible Personal Property

Tangible personal property includes most items other than real estate, bank accounts, investment accounts or cash.  For most people, it is furniture, collectibles, clothes, non-permanent appliances, tools, guns, jewelry, automobiles, boats, motorcycles, toys, all household items, and other similar items.

Testate Estate

An estate to be administered pursuant to a will.

Testator

One who dies leaving a will.

Third Party Supplemental or Special Needs Trust

A third party supplemental or special needs trust is an SNT created for the benefit of a disabled person with the assets of someone other than the disabled person.  The trust is drafted to provide discretionary benefits to the beneficiary, but to avoid becoming a countable resource that would negatively affect a beneficiary’s SSI or Medicaid eligibility.

Transfer Penalty

A transfer of assets can result in a penalty for Medicaid eligibility.  The penalty is a waiting period that is calculated by taking the average nursing home cost for a particular region (determined by the Department of Social Services) and dividing the number into the amount transferred.

Trust

A trust is a legal document under which assets are held and administered for the benefit of a beneficiary.  A trust document spells out the terms and conditions of distribution and the terms and by which the trust is to be administered.

Trustee

A trustee is the person who administers a trust in accordance with its terms.  The selection of the right person or entity to serve as the trustee is critical.  The trustee is responsible for investing the funds, accounting for income and the payment of expenses, and for making distributions in accordance with the terms of the trust document.  If a trustee mismanages a Supplemental Needs Trust, the beneficiary’s public benefits may be reduced or terminated.

Trust Protector

A trust protector is a person designated by the grantor of a trust to protect the interest of the beneficiary.  A trust protector oversees the trustee and can be given the power to remove and replace the trustee if the administration of the trust is not satisfactory.

Will

A written document that gives instructions on how a person wants his or her property distributed after death.  A will is an instrument that appoints an executor to settle the deceased’s estate and provides instructions for the distribution of the deceased’s assets.

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