What are the Advantages for a Financial Advisor to use TCA?

In a word, Flexibility.  Advisors work hard to do their best for the client.  TCA can help advisors do their best by permitting non standard assets that other Trustees will not permit.  TCA is flexible in the use of the advisers and clients choice of custodian or service provider.  We currently have relationships with Schwab, TDAmeritrade, LPL, Fidelity and RBC to name a few.

Advisors may someday hope to retire or seal their practice to another Advisor who uses another service provider.   Even if a service provider offers Trust services,  a service provider who is currently serving as Trustee may not willingly transfer a Trust account to another service provider.  TCA is here to serve the client and the financial advisor community.

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Why use TCA as a Trustee

Trusts usually have many complex issues involving tax, legal, and accounting.  TCA has experience with most of those complex issues which can save time and money in administering a Trust.

TCA will not die or become incapacitated as might happen to a family member, attorney or other individual .

Geography and family dynamics is another reason to name TCA as a Corporate Trustee.  An individual may live out of the area and not able to take care of certain Trust duties as TCA could.  We have been involved with a number of Trusts where a family member was named Trustee and control over other family members.  This situation can evolve into significant family problems.  TCA, as a 3rd party Trustee, can help elevate or eliminate many family dynamics problem s.

TCA’s only job is to administer Trusts and related accounts.  Our client’s have the important right of choice when it comes to the investment advisor, tax professional, attorney and insurance expert they wish to use to accomplish the purpose of their Trust.  Most Corporate Trustee’s require their clients to confirm to the Trustee’s restrictions.  Most often, those restrictions do not permit a client to continue to use the financial advisor, tax advisor, attorney or insurance professional they have used and trusted for years.

TCA has other advantages over other corporate Trustee’s because we permit most non-standard and illiquid assets such as residential  and commercial real-estate, personal notes, loans and mortgages, pre-IPO stock, private-equity and partnerships to name few.

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Glossary of Terms Page 8

Tax-Deferred
Plan
A retirement savings plan
(like an IRA, 401(k), pension, profit sharing, or
Keogh) that qualifies for special income tax
treatment. The contributions made to the plan and
subsequent appreciation of the assets are not taxed
until they are withdrawn at a later time —
ideally, at retirement, when your income and tax
rate are lower.
Taxable
Gift
Generally, a gift of more than $13,000 in one year to someone other than your spouse. The value of the taxable gift is applied to your federal gift tax exemption. After you have used up your exemption, additional gifts will be taxed, usually at the highest estate tax rate in effect. In 2012, the gift tax exemption is the same as the federal estate tax exemption and the tax rate is 35%. If Congress does not act before the end of 2012, on January 1, 2013 the exemption will be $1 million and the tax rate will be 55%.
Tenants-in-Common A form of joint ownership in
which two or more persons own the same property. At
the death of a tenant-in-common, his/her share
transfers to his/her heirs.
Tenants-by-the
Entirety
A form of joint ownership in
some states between husband and wife. When one
spouse dies, his/her share of the asset
automatically transfers to the surviving
spouse.
Testamentary
Trust
A trust in a will. Can only
go into effect at death. Does not avoid
probate.
Testate One who dies with a valid
will.
Title Document proving ownership of
an asset.
Transfer
Tax
Tax on assets when they are
transferred to another. The estate tax, gift tax
and generation skipping transfer tax are all
transfer taxes.
Trust An entity that holds assets
for the benefit of certain other persons or
entities.
Trust
Company
An institution that
specializes in managing trusts. Also called a
corporate trustee.
Trustee Person or institution who
manages and distributes another’s assets
according to the instructions in the trust
document.
Trustor See “Grantor.”
Totten
Trust
A “pay-on-death” account. A
bank account that will transfer to the beneficiary
who was named when the account was established. The
terms “transfer on death” (“TOD”), “in trust for”
(“ITF”), “as trustee for” (“ATF”), and “pay on
death” (“POD”) often appear in the
title.
Unified
Credit
The amount each person is allowed to deduct from federal estate taxes owed after death. In 2012, the credit is $1,772,800. This is the amount of estate taxes that would be due on $5,120,000 in net assets. After applying this credit, the result is that $5,120,000 is “exempt” from estate taxes in 2012.
Uniform Transfer to Minors
Act (UTMA)
Law enacted in many states
that lets you leave assets to a minor by appointing
a custodian. In most states, the minor receives the
assets at legal age.
Unfunded Your living trust is unfunded
if you have not transferred assets into
it.
Warranty
Deed
Document that allows you to
transfer title to real estate. With a warranty
deed, the person guarantees that the title being
transferred is clear (free of any encumbrances). If
the title is defective, the person making the
transfer is liable. Compare to quitclaim
deed.
Will A written document with
instructions for disposing of assets after death. A
will can only be enforced through the probate
court.
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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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Glossary of Terms Page 6

Payable-on-Death
Account
See “Totten
Trust.”
Per Capita A way of distributing your
estate so that your surviving descendents will
share equally, regardless of their
generation.
Per Stirpes A way of distributing your
estate so that your surviving descendents will
receive only what their immediate ancestor would
have received if he/she had been living at your
death.
Personal
Property
Movable property. Includes
furniture, automobiles, equipment, cash and stocks.
Opposite of real property that is permanent (like
land).
Personal
Representative
Another name for an executor
or administrator.
Pour Over
Will
A short will often used with
a living trust. It states that any assets left out
of your living trust will become part of (pour
over
into) your living trust upon your
death.
Power of
Attorney
A legal document giving
someone legal authority to sign your name on your
behalf in your absence. Ends at incapacity (unless
it is a durable power of attorney) or
death.
Probate The legal process of
validating a will, paying debts, and distributing
assets after death.
Probate
Estate
The assets that go through
probate after you die. Usually these include assets
you own in your name and those paid to your estate.
Usually does not include assets owned jointly,
payable-on-death accounts, insurance and other
assets with beneficiary designations. Assets in a
trust also do not go through probate.
Probate
Fees
Legal, executor, and
appraisal fees and court costs when an estate goes
through probate. Probate fees are paid from assets
in the estate before the assets are fully
distributed to the heirs.
Qualified Domestic Trust
(QDOT)
Allows a non-citizen spouse
to qualify for the marital deduction.
Qualified Terminable
Interest Property (QTIP)
A trust that delays estate
taxes until your surviving spouse dies so more
income will be available to provide for your spouse
during his/her lifetime. You can also keep control
over who will receive these assets after your
spouse dies.
Qualifying Subchapter S
Trust (QSST)
Trust that meets certain IRS
qualifications and is allowed to own Subchapter S
stock.
Quitclaim
Deed
Document that allows you to
transfer title to real estate. With a quitclaim
deed, the person transferring the title makes no
guarantees, but transfers all his/her interest in
the property.
Real
Property
Land and property that is
permanently attached to land (like a building or a
house).
Recorded
Deed
A deed that has been filed
with the county land records. This creates a public
record of all changes in ownership of property in
the state.
Revocable
Trust
A trust in which the person
setting it up retains the power to change (revoke)
or cancel the trust during his/her lifetime.
Opposite of irrevocable trust.
Required Beginning Date
(RBD)
The date you must begin
taking required minimum distributions from your
tax-deferred plans. Usually, it is April 1 of the
calendar year following the calendar year in which
you turn age 70 1/2. If your money is in a
company-sponsored plan, you may be able to delay
your RBD beyond this date if you continue working
(providing you are not a 5% or greater owner of the
company).
Required Minimum
Distribution (RMD)
The amount you are required
to withdraw each year from your tax-deferred plan
after you reach your Required Beginning Date. This
amount is determined by dividing the year-end value
of your tax-deferred account by a life expectancy
divisor found on a chart provided by the
IRS.
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Glossary of Terms Page 5

Payable-on-Death
Account
See “Totten
Trust.”
Per Capita A way of distributing your
estate so that your surviving descendents will
share equally, regardless of their
generation.
Per Stirpes A way of distributing your
estate so that your surviving descendents will
receive only what their immediate ancestor would
have received if he/she had been living at your
death.
Personal
Property
Movable property. Includes
furniture, automobiles, equipment, cash and stocks.
Opposite of real property that is permanent (like
land).
Personal
Representative
Another name for an executor
or administrator.
Pour Over
Will
A short will often used with
a living trust. It states that any assets left out
of your living trust will become part of (pour
over
into) your living trust upon your
death.
Power of
Attorney
A legal document giving
someone legal authority to sign your name on your
behalf in your absence. Ends at incapacity (unless
it is a durable power of attorney) or
death.
Probate The legal process of
validating a will, paying debts, and distributing
assets after death.
Probate
Estate
The assets that go through
probate after you die. Usually these include assets
you own in your name and those paid to your estate.
Usually does not include assets owned jointly,
payable-on-death accounts, insurance and other
assets with beneficiary designations. Assets in a
trust also do not go through probate.
Probate
Fees
Legal, executor, and
appraisal fees and court costs when an estate goes
through probate. Probate fees are paid from assets
in the estate before the assets are fully
distributed to the heirs.
Qualified Domestic Trust
(QDOT)
Allows a non-citizen spouse
to qualify for the marital deduction.
Qualified Terminable
Interest Property (QTIP)
A trust that delays estate
taxes until your surviving spouse dies so more
income will be available to provide for your spouse
during his/her lifetime. You can also keep control
over who will receive these assets after your
spouse dies.
Qualifying Subchapter S
Trust (QSST)
Trust that meets certain IRS
qualifications and is allowed to own Subchapter S
stock.
Quitclaim
Deed
Document that allows you to
transfer title to real estate. With a quitclaim
deed, the person transferring the title makes no
guarantees, but transfers all his/her interest in
the property.
Real
Property
Land and property that is
permanently attached to land (like a building or a
house).
Recorded
Deed
A deed that has been filed
with the county land records. This creates a public
record of all changes in ownership of property in
the state.
Revocable
Trust
A trust in which the person
setting it up retains the power to change (revoke)
or cancel the trust during his/her lifetime.
Opposite of irrevocable trust.
Required Beginning Date
(RBD)
The date you must begin
taking required minimum distributions from your
tax-deferred plans. Usually, it is April 1 of the
calendar year following the calendar year in which
you turn age 70 1/2. If your money is in a
company-sponsored plan, you may be able to delay
your RBD beyond this date if you continue working
(providing you are not a 5% or greater owner of the
company).
Required Minimum
Distribution (RMD)
The amount you are required
to withdraw each year from your tax-deferred plan
after you reach your Required Beginning Date. This
amount is determined by dividing the year-end value
of your tax-deferred account by a life expectancy
divisor found on a chart provided by the
IRS.
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Glossary of Terms Page 4

Health Care
Proxy
See “Durable Power of
Attorney for Health Care.”
Heir One who is entitled by law to
receive part of your estate.
Holographic
Will
A handwritten
will.
Homestead
Exemption
Portion of your residence
(dwelling and surrounding land) that cannot be sold
to satisfy a creditor’s claim while you are
living.
Incapacitated/
Incompetent
Unable to manage one’s
own affairs, either temporarily or permanently.
Lack of legal power.
Independent
Administration
A form of probate available
in many states. Intended to simplify the probate
process by requiring fewer court appearances and
less court supervision.
Inheritance The assets received from
someone who has died.
Inter vivos Latin term that means
“between the living.” An inter vivos trust is
created while you are living instead of after you
die. A revocable living trust is an inter vivos
trust.
Irrevocable
Trust
A trust that cannot be
changed (revoked) or cancelled once it is set up.
Opposite of revocable trust.
Intestate Without a will.
Joint
Ownership
A form of ownership in which
two or more persons own the same asset together.
Types of joint ownership include joint tenants with
right of survivorship, tenants in common, and
tenants by the entirety.
Joint Tenants with Right
of Survivorship
A form of joint ownership in
which the deceased owner’s share automatically
and immediately transfers to the surviving joint
tenant(s).
Land Trust Often used for privacy. Title is transferred to a corporate trustee or corporation, but you keep control over how the property is managed. Because the title is in the name of the corporate trustee or corporation, no one knows the property belongs to you. In all financial transactions and dealings, your personal name never comes up. Also called a title holding trust.
Liquid
Assets
Cash and other assets (like
stocks) that can easily be converted into
cash.
“Living
Probate”
The court-supervised process
of managing the assets of one who is
incapacitated.
Living
Trust
A written legal document that
creates an entity to which you transfer ownership
of your assets. Contains your instructions for
managing your assets during your lifetime and for
their distribution upon your incapacity or death.
Avoids probate at death and court control of assets
at incapacity. Also called a revocable inter vivos
trust. A trust created during one’s
lifetime.
Living
Will
A written document that
states you do not wish to be kept alive by
artificial means when the illness or injury is
terminal.
Marital
Deduction
A deduction on the federal
estate tax return that lets the first spouse to die
leave an unlimited amount of assets to the
surviving spouse free of estate taxes. However, if
no other tax planning is used, and the surviving
spouse’s estate is more than the amount of the
federal estate tax exemption in effect at the time
of his/her death, estate taxes will be due at that
time.
Marital
Trust
See “A Trust.”
Medicaid A federally-funded health
care program for the poor and minor
children.
Medicare A federally-funded health
care program, primarily for Americans over age 65
who are covered by Social Security or Railroad
Retirement benefits.
Minor One who is under the legal
age for an adult, which varies by state (usually
age 18 or 21).
Net Estate The value of an estate after
all debts have been paid. (Federal estate taxes are
based on the net value of an estate.)
Net Value The current market value of
an asset less any loan or debt.
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