Glossary (G – K)
GENERAL POWER OF APPOINTMENT
The power given to a person, by appointment in a will or a trust, to distribute the property that passes through the will or trust at the discretion of the person appointed. Other than to give the appointed person the authority to make the distribution, the will or trust does not make distribution of the property.
GENERAL POWER OF ATTORNEY
A legal document that gives one person (the agent) the legal authority to act on behalf of another (the principal). The scope of the document can be as broad or narrow as the principal desires. A general power of attorney becomes invalid when the principal dies. See also “Power of Attorney.”
A transfer to a grandchild or other individual who is at least two generations (or for unrelated persons where the transferee is 37.5 years younger than the donor) below that of the Grantor, or to a trust for the benefit of such individuals, upon which a Generation-Skipping Transfer Tax may be imposed.
A gratuitous transfer of property to someone else without receiving adequate consideration in return.
A federal tax levied on the transfer of property as a gift. This tax is paid by the donor. Single donors are allowed to make gifts up to $15,000 per donee in 2023. By agreement, couples may make gifts up to $34,000 per married couple in 2023. Gifts above the annual exclusion amount reduce the amount of the donor’s applicable exemption amount. Aggregate gifts above $12,920,000 million (in 2023) will result in gift taxes due. Some states also impose a gift tax. The Annual Gift Exclusion is indexed annually for inflation.
In trust usage, the person who creates a trust (also known as Grantor, settlor or trustmaker).
The Grantor Retained Annuity Trust (“GRAT”) is a type of irrevocable trust that permits the Grantor to make a lifetime gift of assets to an irrevocable trust in exchange for a fixed payment stream for a specified term of years. At the end of the term of years, the balance of the trust property is transferred to the remainder beneficiaries named in the trust, typically children or grandchildren. The Grantor Retained Annuity Trust may reduce estate taxes by removing assets from those that are counted in the Grantor’s estate for estate tax purposes if the Grantor outlives the specified term of years.
The total value of all property owned by a decedent at the time of his or her death.
A person appointed by a court to the care for a minor or incapacitated person. The guardian may or may not also serves as conservator of the minor’s estate.
A court proceeding in which the Court determines whether a person is so incapacitated, due to lack of capacity or lack of legal age, that s/he needs a guardian appointed to make decisions related to a person’s wellbeing.
HEALTH CARE POWER OF ATTORNEY/MEDICAL POWER OF ATTORNEY
A grant of power to a person to make or carry out the decision of the signor of the instrument, under terms of a state law, when one is unable to make decisions concerning selection of health care providers, treatment options, pain control and implementation of a Living Will/Medical Proxy.
A person who inherits something from a Decedent under a state intestacy statute in circumstances where the decedent died intestate (without a will or with a will that did not fully dispose of the Decedent’s assets). Heirs receive notice of probate court actions even if the decedent had a will.
Those persons who are entitled under the statutes of intestate succession to the property of a decedent. Also used to refer generally to beneficiaries of a will. Also known as “next of kin”.
The Health Insurance Portability and Accountability Act (HIPAA) was enacted by the U.S. Congress in 1996. Title II of HIPAA, known as the Administrative Simplification (AS) provisions, requires the establishment of national standards for electronic health care transactions and national identifiers for providers, health insurance plans, and employers. The Administration Simplification provisions also address the security and privacy of health data. The standards are meant to improve the efficiency and effectiveness of the nation’s health care system by encouraging the widespread use of electronic data interchange in the US health care system HIPAA restricts the ability of health care providers to disseminate “Protected Health Information” without authorization. Health Care Powers of Attorney should contain a “HIPAA Authorization” allowing health care providers to communicate with the designated agent or agents. Alternatively, a separate Standalone HIPAA Authorization may be used to augment a Health Care Power of Attorney not containing a HIPAA Authorization.
A handwritten will, authorized in a few states including Colorado.
State laws which entitle a surviving spouse or minor children to certain assets of the decedent’s estate.
The lack of ability to act on one’s own behalf. One who lacks capacity is generally unable to execute a testamentary plan.
A beneficiary whose interest is limited to income earned.
INCOME IN RESPECT OF A DECEDENT
Income earned by a decedent or income to which the decedent had a right prior to death, but which was not properly includible in his or her gross income prior to death.
To receive property from a deceased person.
An irrevocable trust used to hold insurance and pass it on to beneficiary without any estate taxes on the death benefits of the policy. Sometimes referred to as an Irrevocable Life Insurance Trust (ILIT).
Literally means during life. Refers to transactions, such as gifts or trusts, made during a person’s lifetime.
INTER VIVOS TRUST
Legal name for a “between the living” trust. The trust is set up by a grantor during his or her lifetime.
The distribution of property to heirs according to the statutes of the state of residency upon the death of a person who owned the property, but who did not leave a valid will.
A trust that cannot be changed or terminated after it is established. In Colorado, court intervention can be used in limited circumstances to alter or change an Irrevocable Trust. However, the process must comply with the state statue and often involves legal expertise.
The condition of an estate left by a decedent without a valid will. State law then determines the disposition of the property to individuals based on his/her legal relationship to the decedent.
JOINT TENANCY (Joint Tenancy with Right of Survivorship, JTWROS)
Co-ownership of property by two or more people in which the survivor(s) receives ownership of the decedent’s interest, upon one of the owner’s deaths.
JOINT AND SURVIVOR ANNUITY
Many pension plans offer this form payout that pays over the life of the retiree and spouse after the retiree dies.
JOINTLY HELD PROPERTY
A broad description of property owned by two or more persons under joint tenancy, tenancy in common, or, in some states, community property or tenancy by the entirety.