Planned Giving
Glossary of Terms
Actuarial Life Expectancy - The number of years a person is expected to live based on a series of assumptions.
Appreciated Property - Property that has increased in value from the amount that the owner paid for it (as defined for tax purposes).
Beneficiary - Individual/charity receiving benefits from a trust or other charitable gift during its existence.
Bequest - A gift made through a will of assets or other property to a beneficiary.
Capital Gain/Loss - The profit or loss resulting from the sale of property. Short-term gain/loss refers to property owned for 12 months or less; long-term gain/loss refers to property owned for longer than 12 months.
Charitable Income Tax Deduction - The amount that a contributor is entitled to deduct from his/her income taxes by reason of a charitable gift.
Charitable Remainder - The amount the charity is to receive, as calculated at the time the gift is made. This amount is the same as the Charitable Deduction.
Codicil - A change to an existing will. A supplement, amendment, or addition to a will that explains, modifies, adds to, subtracts from, qualifies, alters, restrains or revokes provisions in a will. It becomes a part of the will and must be executed in the same manner as the will, as prescribed by state law.
Cost Basis - An investor's purchase price of an asset for tax purposes, adjusted for stock splits, distributions and return of capital distributions. The appraised value of an inherited asset as of the date of death of the person who bequeathed it.
Date of Gift Value - The value of the gift as of the date on which the contributor relinquished control (as defined by the IRS) of the assets being donated.
Executor/Executrix/Personal Representative - Individual(s), corporation(s) named in a will to collect the deceased person's property, pay debts and distribute property in accordance with the instructions contained in the will.
Fair Market Value - Price at which property would change hands between a willing buyer and seller and calculated as the mean (average) between the highest and lowest selling prices on the valuation date.
Intestate - Refers to when a person has died without a will.
Irrevocable - An arrangement that cannot be broken except under very limited and unusual circumstances.
Present Value - A calculation that adjusts an amount to be received in the future to a current value taking into consideration assumptions about the contributor's life expectancy, the rate of return the investments are expected to generate and a rate by which the future amount should be discounted (the discount rate).
Probate - The process by which the assets of a person who has died are documented, administered and distributed under the supervision of a local court and in accordance with the terms of a valid will.
"Qualified" Appraisal - An appraisal made by a person approved as a 'qualified appraiser' and made no earlier than 60 days prior to the gift's transfer and no later than the date the tax return in which the gift is reported is filed.
Related Use - A test applied to gifts-in-kind, requiring the gift to be used for a purpose that is directly related to UMMS's mission of patient care, medical education and medical research if a charitable deduction is to be claimed for the full, fair-market value of the donated property.
Remainderman - Individual or charity entitled to receive the assets upon the termination of a trust.
Testator/Testatrix - A person who has died leaving a will.
Total Return - The combined earnings from principal appreciation and income earned.
Trust - An arrangement by which a person conveys legal title to property to another party (such as a bank trust department or an attorney). The trustee agrees to administer the trust assets for the benefit of the person who established the trust or for the benefit of someone else named in the trust agreement. Trusts can be established during lifetime (intervivos or living trust) or by will (testamentary trust).
Trustee - A person or a corporation (such as a bank) who holds legal title to the property of a person and who has the duty to hold and manage the trust for the benefit of both the beneficiaries and the remaindermen.
Trustor/Settlor/Grantor - Person who establishes a trust during his/her lifetime.
Will - A legal document by which a person outlines the disposition of his/her assets after death. A will must be witnessed and executed as prescribed in state law.