Estate planning attorneys work with many different legal devices, and the names of some of them are long and awkward. As a response, acronyms are often used, and the average layperson that is looking for information is not to be familiar with them.
We will provide a glossary of sorts here. The benefit of knowing what these acronyms stand for if you happen to come across them is self-evident. This is also a good way for our readers to get some information about a wide range of estate planning devices.
Revocable Living Trust (RLT)
This type of trust is very commonly used, because it is the ideal asset transfer vehicle for a wide range of people. An RLT is a good alternative to a last will for a number of different reasons.
A will would be admitted to probate, which is a time-consuming and expensive legal process. Assets can be transferred outside of probate when they have been conveyed into a revocable living trust. This is one of the benefits, and there are a number of others.
Supplemental Needs Trust (SNT)
Individuals with disabilities typically rely on need-based government benefits like Medicaid and Supplemental Security Income (SSI). Since these safety nets are intended for people with significant financial need, there is a low asset limit of just $2000.
If a benefit recipient was to receive a direct inheritance, eligibility for these benefits could be lost. The commonly embrace solution to this dynamic is the utilization of a supplemental needs trust (SNT).
Under program rules, the trustee could use assets in the trust to satisfy the approved supplemental needs of the beneficiary. As long as the rules are followed, benefit eligibility would remain intact.
Power of Attorney (POA)
In many instances, elders become incapacitated late in their lives, and they can no longer make sound decisions. To account for this, durable powers of attorney can be executed. The “durable” designation allows this particular type of POA to remain intact upon the incapacitation of the grantor.
A comprehensive estate plan with an incapacity component will include a durable power of attorney for health care decision-making, along with a durable POA for property.
Health Insurance Portability and Accountability Act (HIPAA)
This law has been in place since 1996. A provision in the statute prevents health care providers from sharing medical records with anyone other than the patient. That is, unless a HIPAA release has been executed.
Qualified Personal Residence Trust (QPRT)
There are certain trusts that are designed to mitigate liability for people that are exposed to the estate tax. One of them is the qualified personal residence trust.
We will thoroughly explain the details in a future post, but generally speaking, a home that is placed into this type of trust can ultimately be transferred to a beneficiary at a tax discount.
Qualified Terminable Interest Property Trust (QTIP)
This trust is often used by people with children from previous marriages that are getting remarried. The new spouse would be first beneficiary, and the children would be the final beneficiaries.
If the grantor does predecease their spouse, the survivor would be able to receive income that is earned by assets in the trust and use property that is owned by the trust. After the death of the surviving spouse, the children would assume ownership of the remainder in the trust.
Attend a Free Seminar
We are holding a series of seminars over the coming weeks, and we are very excited about the material that we are going to present. When you attend one of the sessions, you will walk away with an entirely new understanding of the estate planning process.
Best of all, there is no admission charge, so you have everything to gain and nothing to lose. To see the schedule and obtain registration information, visit our seminar page.
Schedule a Consultation!
Our doors are open if you would prefer to jump right in and discuss your estate planning goals with one of our attorneys. You can send us a message to request a consultation appointment, and we can be reached by phone at 513-721-1513.