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Glossary of Terms Page 7

Separate
Property
Generally, all assets you
acquire prior to marriage and assets acquired by
gift or inheritance during marriage.
Separate
Trust
A trust established by one
person. A married couple has separate trusts if
each spouse has his/her own trust with its own
assets. In contrast, see “Common Trust.”

Settle an
Estate
The process of handling the
final affairs (valuation of assets, payment of
debts and taxes, distribution of assets to
Beneficiaries) after someone dies.
Settlor See “Grantor.”
Special
Gifts
A separate listing of special
assets that will go to specific individuals or
organizations after your incapacity or death. Also
called special bequests.
Special Needs
Trust
Allows you to provide for a
disabled loved one without interfering with
government benefits.
Spendthrift
Clause
Protects assets in a trust
from a beneficiary’s creditors.
Spouse Husband or wife.
Stepped-up
Basis
Assets are given a new basis
when transferred by inheritance (through a will or
trust) and are re-valued as of the date of the
owner’s death. If an asset has appreciated
above its basis (what the owner paid for it), the
new basis is called a stepped-up basis. A
stepped-up basis can save a considerable amount in
capital gains tax when an asset is later sold by
the new owner. Also see “Basis.”
Subchapter S Corporation
Stock
Stock in a corporation which
has chosen to be subject to the rules of subchapter
S of the Internal Revenue Code.
Surviving
Spouse
The spouse who is living
after one spouse has died.
Survivor’s
Trust
See “A Trust.”
Successor
Trustee
Person or institution named
in the trust document who will take over should the
first trustee die, resign, or otherwise become
unable to act.
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