NOTE: The glossary terms listed below are generally based upon Missouri law. Other states may vary in how they interpret any particular term listed below.
Abstract of Title
A condensed history of the title to a piece of land listing all conveyances, liens, and liabilities. Obtaining an abstract of title is no longer common practice in Missouri. Instead, policies of title insurance are normally purchased when real estate is being conveyed and protects against any defects in title or ownership that is not disclosed or otherwise excepted from coverage on the title commitment.
A person skilled in keeping financial records. A Certified Public Accountant (CPA) is one who has met certain requirements and is licensed to practice as a public accountant.
Ad LitemLiterally translated from Latin, it means “for the suit”. A guardian ad litem, for example, may be appointed by the court to handle a suit of a minor child, or an adult that is alleged to be incapacitated (a guardian ad litem) or disabled (a conservator ad litem).
A fiduciary relationship in which one party represents another by the latter’s authority and intending to legally bind that person. The relationship can be between an agent and a principal, in which case the agent acts for the principal by, for example, handling his finances; between a master and a servant, that is, between an employer and an employee; or between an employer and an independent contractor.
A person who does some act on behalf of another person with the intention being to legally bind that other person. An agent would include someone who is appointed as an attorney in fact from the authority granted by the principal under a power of attorney.
A written contract made before marriage by future spouses, usually to settle questions of support and distribution of wealth should one spouse die or should the planned marriage end in separation or divorce.
An estimation of the value of a property by a qualified, disinterested person.
Articles of Incorporation
The document filed with the state upon the formation of a corporation. It lists, among other things, the purpose of the corporation, its place of business, and the name of its registered agent.
Articles of Organization
The document filed with the state upon the formation of a limited liability company, or LLC It lists, among other things, the purpose of the LLC, its registered agent, and its organizer.
Attorney in Fact
An agent with authority to do some particular act for another. The agent may be granted such authority by a written document called a “power of attorney.”
The basis of an asset is used as a baseline in determining appreciation (gain) or depreciation (loss) of value over time, and is used for taxing purposes. Basis can be determined under a cost approach, or in some circumstances, can be “stepped up” if the property is inherited in some manner from a deceased person.
Person or organization entitled to benefits in a will, insurance policy, or trust. One who benefits from acts of other persons.
The act of giving a gift of personal property in a will. Technically, it should be distinguished from a “devise,” which is to give a gift of real property. The terms are often used synonymously however.
Business & Succession Planning
An area of law in which an attorney and their staff assist owners of a business in addressing the legal and regulatory matters that affect the operations of their business. Succession Planning related to the exit strategy and transfer of ownership to the next generation of owners.
Rules and regulations of corporations, associations, and other organizations.
This term is used to describe how a corporation is taxed for federal income tax purposes. C Corporations are taxed on their earnings and profits at corporate income tax rates. If and when these earnings and profits are distributed to its shareholders in the form of a dividend, the shareholders would have income subject to income tax as well. This double taxation may be avoided by electing to be taxed as a small business corporation under Subchapter S of the Internal Revenue Code if certain requirements are met.
All shares of stock a company has issued or may issue according to its articles of incorporation.
A document that establishes a corporation. Also known as its articles of incorporation once they have been accepted by the State.
A form of corporation that includes “built-in” transfer restrictions among the owners and the corporation on the shares of stock and allows for simplified management. A corporation must affirmatively elect to be treated as a statutory close corporation in Missouri.
The conclusion to a sale of real estate, whereby payment is made, mortgage is secured, and the deed is transferred. In Missouri, closings frequently take place at the office of a title insurance company.
To mix together. Often used regarding the combining of assets between a business and its owners or a trustee and the trust assets. It is considered a breach of fiduciary duty when funds are commingled by a fiduciary.
This term is used to describe a blood relationship. Consanguinity is either lineal, such as a son is from his father; or collateral; such as cousins.
A person appointed by the court to take charge of the property or manage the financial affairs of a disabled person.
A possible right to receive an interest in property at some point in the future should some condition or event be satisfied. Once the condition or event has been satisfied, the interest in property turns into a vested interest. Possession of the property may or may not occur upon the vesting of a contingent interest.
An agreement between two or more parties which creates legally binding obligations. A valid contract must involve competent parties, proper subject matter, consideration, and mutuality of agreement of the obligation.
A form of business ownership that generally provides liability protection to the owners of its stock. Owners are referred to as shareholders or stockholders.
A promise or obligation to either do or not do something that is often contained in a written contract. If a covenant is broken, it can become a breach of contract from which a claim for damages can be made.
Covenant Not to Compete
A contractual agreement in which the parties consent not to compete against each other for a specified period of time in a distinct geographic area. Covenants not to compete are common between employers and employees, and the buyer and seller of a business.
A creditor is when you may need to collect a debt that a decedent owed to you at the time of his or her death.
A person who has died.
A written instrument which transfers real property or the right to real property. Different types of deeds have different legal effects. Examples of different types of deeds include warranty deeds, trustee deeds, quit-claim deeds, beneficiary deeds and special warranty deeds. A real estate contract should specify which type of deed is required to transfer the property at closing.
Deed of Trust
A document that conveys legal title to real property to a third-party trustee to guarantee the performance of an obligation, such as the payment of a mortgage loan on real property. So long as the obligation is met, the grantor gets to retain and use the property.
The difference between the amount a taxpayer shows being owed on a tax return and the amount the taxing body says is owed.
A person who proceeds directly from the body of another, for example, one’s child, grandchild, great-grandchild, etc.
A gift of real property given to a devisee by will, although the term is sometimes used to refer to personal property. Devises are classified as specific (mentions of particular piece of land), general (does not mention a particular piece of land but refers to land without additional words attached to qualify it, such as “all my lands”), and residuary (all the land left after the other devises and debts on the estate have been settled).
Person to whom real property is given by will.
Person elected or appointed to manage the affairs of a corporation. Director’s act as a unit called the board of directors.
A monthly monetary benefit paid to a veteran because of injuries or disease that was incurred or made worse by military duty. Veterans with disabilities resulting from VA health care may also be eligible for disability compensation.
A monthly monetary benefit paid to veterans with low incomes who are either permanently and totally disabled, or age 65 or older.
Disabled or Disabled Person
Under Missouri law: a person who is unable by reason of any physical or mental condition to receive and evaluate information or to communicate decisions to such an extent that the person lacks ability to manage their financial resources, either in whole or in part. A person may be declared partially disabled. A person who has been declared disabled or partially disabled by the court is known as a protectee. A person who cares for the estate of a protectee is known as a conservator.
A sum from the surplus earnings of a corporation, as determined by the board of directors, divided and paid periodically to stockholders, either in cash or additional stock.
Doing Business As (d/b/a)
An alias. A name used for the purpose of conduction business but that is different than the legal name for the person or company. See also “fictitious name”.
An obligation imposed as a matter of law, as in the duty one has to perform under a contract or the fiduciary duties a trustee owes to the beneficiaries of a trust.
The right to use part of the land owned by another for a special purpose, such as a driveway, utility or water line easement. Its use must be consistent with the general use of the property by the owner. The property with this right is called the “dominant tenement” and the one which bears the burden of the easement is the “servient tenement”.
An area of the law focused on the needs of the elderly and disabled.
The transfer of property to the state because its owner died leaving no one legally entitled to claim it.
An arrangement whereby a document, stock, money or other property given to a third person called an escrow agent to be held by him until the occurrence of an event or performance of a condition. When the condition has been satisfied, the escrow agent then gives the property to whom it belongs, such as the seller of real property.
The process of determining how you want your estate distributed and putting into place the appropriate instruments that will protect the value of your estate and ensure your wishes are carried out. This is an ongoing process and you should review and update your estate plan as your family circumstances and estate change.
A tax on the right to transfer a deceased person’s property. It is based on the value of the gross estate. An “inheritance tax” is the opposite, i.e., it is a tax on the right to receive property, and is based on the value of the property each heir receives.
Fair Market Value (FMV)
The amount a willing buyer would pay and a willing seller would accept for a particular asset, with neither party being under a compulsion to buy or sell and both having reasonable knowledge of the relevant facts. The price goods would bring in the ordinary course of trade.
A registration with the secretary of state by a person or business entity who chooses to use a business name other than their personal or legal name. This is also known as the doing business as (d/b/a) name.
A person entrusted with the duty to act for the benefit of someone else. Fiduciaries must exercise a high degree of care and must subordinate their own personal interests in the even that there is a conflict. Examples of fiduciaries are a trustee, director of a corporation, executor, guardian, conservator or an attorney in fact.
A type of litigation that involves disputes between principals and beneficiaries on one side, and those serving in a fiduciary role on the other side of a lawsuit. A fiduciary is someone who serves not in an individual capacity, but as a representative or decision maker for someone else. A fiduciary owes a duty or responsibility to act in the best interest of their principal, to act loyally, to exercise the utmost care in discharging their duties and not to engage in any acts of self-dealing.
Fiduciary comes from the Latin word meaning “to hold in trust“. A fiduciary is a legal or ethical relationship of trust between two or more parties, typically involving the prudent care of assets by one party for another. An area of tax preparation that involves the preparation and filing of income, estate, inheritance and gift tax returns for individuals, trusts and estates, normally on behalf of the fiduciary whom is in charge of the estate or trust. The obligation to file fiduciary tax returns is but one of the items required to be carried out when discharging a duty of prudent care in protecting the assets in the estate or trust.
The privileged use of a trade name and the right to market another’s product or services. The privilege is usually granted by the owner of the trade name in exchange for consideration. Examples include brand-name gas stations and fast food restaurants.
A tax on a corporation for the right and privilege of carrying on its business within the sovereign’s jurisdiction. In Missouri, corporations have to file a franchise tax return annually even if no tax is due (in additions to filing an annual registration report).
An interest in land or money which will begin in use or possession sometime in the future, such as a trust which holds money for the beneficiary until he attains the age of 21. A future interest may be vested or contingent upon the happening of certain events.
Generation Skipping Transfer
A transfer in which the transferee is more than one generation removed from the transferor; such as a transfer from a grandparent to a grandchild.
A transfer of real or personal property by one party to another without the expectation of receiving something in return for making the transfer and often done out of love and affection for the person receiving the gift.
A tax imposed on a living person who transfers property by gift if certain valuation thresholds are met (as set forth in the Internal Revenue Code).
A person who transfers ownership of real or personal property. In the estate planning context, this often occurs when the person establishing a trust gives all or part of their property to the trust to be managed. In the real estate context, a grantor is the person who currently owns real property and is conveying ownership of the property to a grantee, or the person who is receiving the property.
A trust created by a grantor for the benefit of the grantor during their life. For tax purposes, the Trust may be treated the same as the grantor during their life and not as a separate entity.
A person appointed by the court for managing the care and custody of a person declared legally incapacitated to provide for their own food, shelter, safety or other care such that serious physical injury, illness or disease is likely to occur. Such a person declared legally incapacitated is known as a ward. Serving as a court-appointed guardian does not make the guardian legally responsible for the debts of their ward.
Health Care Declarations
A written document directing medical treatment, or the withholding of medical treatment, to be followed in specified situations when the person making the declaration is determined to be incapacitated and therefore no longer able to make treatment decisions for themselves.
A person who will receive the estate and property of another upon that person’s death. A person entitled to receive an inheritance at a future date. At common law, the person legally entitled to the intestate estate of relative.
Under Missouri law; one who is unable by reason of any physical or mental condition to receive and evaluate information or to communicate decisions to such an extent that they lack the capacity to meet essential requirements for food, clothing, shelter, safety or other care such that serious physical injury, illness or disease is likely to occur.
A tax based on the net or gross incomes of persons, corporations or other tax payers. The Sixteenth Amendment of the United States Constitution allows Congress to institute a tax on incomes.
To combine to form one unit. The act of creating a corporation accomplished by filing articles of incorporation and payment of a fee to the secretary of state.
One who undertakes a project for another while retaining control over the means and method by which he accomplishes his goal. The employer has no control over the details of the independent contractor’s work and is likewise not responsible for payment or withholding of employment taxes.
To receive property from a decedent either by descent (through intestacy laws) or by devise (a will).
All property, real or personal, that is received by heirs from a decedent through the laws of descent and distribution.
A tax imposed upon a recipient of real and personal property received from a decedent. Inheritance taxes are imposed upon the legal right to acquire property and not the property itself. Neither the United States nor Missouri currently has an inheritance tax.
Internal Revenue Code (IRC)
Federal laws found in Title 26 of United States Code which set forth all federal tax laws. The IRC is administrated and enforced by the Internal Revenue Service.
This Latin term literally means “between the living”. Transactions made inter vivos are made while the parties are living and are to take effect while bother parties are alive. An inter vivos gift is made while the donor is living and taxes effect during the donor’s life, as opposed to a gift made “causa mortis” or in contemplation of death.
A person dies intestate if they die without making a valid will or without otherwise indicating directions for the disposal of their property. If a person has made a will which has not completely disposed of her property, that individual is said to have died intestate as to that portion of her property not disposed of in her will.
The disposition of property according to the laws of descent and distribution upon the death of a person who has not left a valid will or who has not accounted for a portion of his estate in their will.
That which cannot be recalled or withdrawn.
A type of ownership of real property, created under a single deed or instrument, whereby two or more persons have an undivided interest in the whole of the property, an equal right to share in the use and benefits of the property, and attached to which is the right of survivorship.
An individual who makes decisions on legal issues.
Relationship with family members by blood or consanguinity and not otherwise, such as by marriage.
The person who owns real property, and leases it to a tenant. A landlord may also be referred to as a lessor.
An individual licensed to practice law within a particular jurisdiction, such as a state.
An agreement between two parties whereby one party, the lessor, yields his right of possession and use of some real or personal property for a specified period of time to a lessee in return for consideration, normally a cash payment at a recurring interval.
A lessee’s estate or interest in real property that is created by a lease.
Person to whom the laws of intestate succession would give a decedent’s property to if decedent had died intestate.
A person who oversees and represents the legal affairs and interests of another, such as a guardian, conservator or personal representative.
One who rents property. One who holds estate in real or personal property by virtue of a lease agreement. Also known as a tenant.
One who rents property to another, such as a lessee. One who grants to another an estate in real or personal property for a specified duration under the terms of a lease agreement.
Letters of Administration
Document issued by a probate court appointing an administrator or personal representative to handle the affairs and management of a probate estate where the decedent died without a will.
The formal document of authority and appointment issued by a court to a personal representative and thereby allowing them to fulfill their duties as the personal representative where the decedent died with a will.
To take actions to collect a debt by seizing property of the debtor, such as levying against a bank account.
A claim on another’s property asserted in order to secure payment upon a debt. Examples include federal tax liens, a mechanic’s lien, or a lien on a car title to the lender.
An ownership interest in property granted or reserved to a person for as long as a named person lives. Upon the end of the measuring life, the land will either revert to the grantor of the life estate or will go to a person holding a remainder interest in the property.
Limited Liability Company (LLC)
A form of business ownership with the flexibility of a partnership and the liability protection of a corporation. An LLC is created by filing articles of organization and payment of a filing fee to the secretary of state. Owners are referred to as members and their relationship is defined by an operating agreement.
A business venture in which one group of persons (called the general partners) with unlimited liability manages the venture, while another group (called the limited partners) only contributes capital and shares in profits but has no right to participate in the management of the venture or suffer unlimited liability exposure.
A trust whose provisions are in effect during the lifetime of the person who established the trust. Also called an “inter vivos trust”.
A type of management for an LLC where one or more managers are appointed to operate the daily business affairs of the company and otherwise have the authority to bind the LLC. Certain major decisions are reserved to the members unless altered under the terms of the operating agreement. This type of management is closely akin to that found in a corporation, where the manager’s act in a similar capacity to the president and other officers and the members are similar to shareholders.
A person who owns a membership interest in a limited liability company and who has signed the operating agreement or otherwise agreed to be bound by its terms. A member is entitled to vote on certain affairs of the LLC in a manager-managed LLC or on all affairs of a member-managed LLC.
A type of management of an LLC that has elected to have all members participate in the management of the company and its daily affairs. This type of management is closely akin to the management shared by partners in a partnership.
That interest in an LLC which represents the profits, losses and other financial allocations for tax purposes that is owned by either a member or that was previously owned by a member but assigned to another person. Ownership of a membership interest does not necessarily entitle the owner to participate in the management or other affairs of the company the same as a member unless the operating agreement so provides.
A consolidation of two or more business entities.
Monthly Bill Pay Assistance
At times, you may find you need a little assistance with ongoing management of the financial affairs of a family member or yourself. Our firm will provide that assistance so you can be sure that monthly bills are being reviewed for accuracy and legitimacy, then paid on time. This can provide peace of mind and relief to you and your loved ones.
A security interest in property given by the debtor (the mortgagor) to the creditor, loan company or bank (the mortgagee) to secure payment of a loan. Mortgages are normally used in the purchase of real property.
A human being, rather than an “artificial” being created by operations of law such as a corporation, limited liability company or a trust. Many state and federal laws can and do refer to “any person” which may refer to a natural person or any other entity created by operation of law. See also the definition of “person”.
In the probate and estate administration context, the net estate is the remainder of a gross estate, after allowable debts and expenses have been paid and claims have been satisfied.
Next of Kin
In wills and trusts, the blood relatives of the decedent.
Suggest or request a person or candidate be appointed by a court for a certain office or duty, such as guardian, conservator or personal representative.
A will declared or dictated orally shortly before death in the presence of sufficient witnesses. Proof of such a will depends on the testimony of these witnesses. Nuncupative wills are not recognized in all states.
A duty owed to another. A responsibility that requires a person to act in a certain manner, such as to perform a service or discharge a debt.
Any valid agreement or agreements, whether oral or in writing, among all members, or a written declaration by a sole member of an LLC concerning the conduct of the business and affairs of the limited liability company. This document defines the rights, obligations, duties and the general relationship among the members of an LLC, as well as the manager(s) of a manager-managed LLC. A single member LLC is required to have a written operating agreement under Missouri law.
One who has legal right to possession of a property, or if possessory rights in the property have been separated such as in a lease, the person in whom title is vested.
A partner is an owner of a partnership interest. A partner can be either a general partner or limited partner, depending upon the type of partnership that was created.
An association of two or more persons to carry on as co-owners of a business for profit. Owners are referred to as partners. Partnerships may be either general or limited.
Pay on Death (POD)
Type of non-probate transfer usually used for bank accounts, investments, car titles, etc.
A method of describing who is to receive a distribution of property in either a will or trust where the intended recipient(s) are described as a class. An example would be “to my children, per stirpes”. The number of shares of property to be distributed would be based upon how many are in the referenced class, such as children. Thus if a testator had four children during his life, then the testator’s property would be split four ways at their death. If a child were to predecease the testator, that share would pass to their heirs, such as their children or the testator’s grandchildren, who are said to take by representation. Per stirpes should be distinguished from a per capital distribution. A per capital distribution would only divide the property into the number of shares that exist in the referenced class of family members at the death of the testator. Thus if a testator had four children but one has predeceased, and the distribution is to be per capital then each of the three remaining children would take one-third of the property to be distributed. Even if the predeceased child had heirs other than their siblings, they would not receive any distribution from the testator’s property.
A legal existence capable of having rights and duties. In the legal sense a person can be a natural person, such as a human being, or an artificial person. Partnerships, corporations, limited liability companies, associations, trusts, foreign governments, and municipalities are artificial persons.
All property not real estate. The two categories of personal property are “corporeal,” consisting of movable objects such as furniture or jewelry, and “incorporeal,” consisting of the interest one has in something, such as in a corporation by the ownership of stock.
The modern term for an executor or executrix.
Personal property; movable property; property that is not real estate. If personalty is affixed to real estate, it becomes part of the real estate if removing it would damage the realty (this is also known as a fixture).
One who presents a petition to a court or any official body or office seeking relief. May also be known as a plaintiff.
Piercing the Corporate Veil
Phrase referring to a court’s refusal to grant immunity to corporate shareholders, officers, or entities for their wrongful acts. Such a refusal is an exception to the general rule that individuals are shielded by their corporate employers from personal liability for wrongful acts done to further the corporate purpose. Courts will do so when, among other instances, the corporation is engaged in fraud, or has not operated with the requisite corporate formalities (such as not commingling funds of the corporation and its shareholders, directors or officers).
A map showing the boundaries and location of real estate in a town, village or subdivision, and the streets and parcels which are adjacent to the property.
Exclusive dominion and control over property. Possession is more than actual physical custody, which is mere keeping and caring, but it involves an assertion of a right to exercise dominion and control. The two kinds of possession are “actual” and “constructive”. Someone who has direct physical control over something has actual possession of it. Constructive possession is where someone had the power and intention of exercising control over something while it is not in his actual possession. A tenant who occupies an apartment is in actual possession of it while the owner of it is in constructive possession of it.
Power of Attorney
Document by which a person (principal) grants authority to another (agent) to perform specified acts on his (principal’s) behalf. The agent is referred to as an “attorney in fact”. Powers of Attorney can be written so that they are effective when signed, or they become effective upon the occurrence of a specific event, such as incapacity.
A stockholder’s privilege to buy issues of the corporation’s new stock, and thereby maintain a constant percentage of ownership. In certain circumstances, a stockholder may not have preemptive rights.
Type of capital stock of a corporation that gives its holder priority over common stockholders in the distribution of dividends, or of company assets upon dissolution. Shares of this stock may also be called “preferred shares”.
A written contract made before marriage by future spouses, usually to settle questions of support and distribution of wealth should one spouse die or should the planned marriage end in separation or divorce. See also antenupital agreement.
A person who grants authority to another, their agent, to do something on their behalf and intending to be legally bound. Often, a principal will grant this authority to their agent under a power of attorney.
The sale of a security directly to a private person or favored clients such as large institutional investors, outside of a public offering.
Statements made by one person to another which may be withheld as confidential by that other person when he is a witness in court or other legal proceedings regarding the conversation. Examples include patient-physician, client-attorney, penitent-priest, or husband-wife communication, all of which are protected in varying degrees.
The management of the estate of a deceased person which may be supervised by the court, or unsupervised.
Court process by which the property of a deceased person is collected, creditors paid, and the remaining property is distributed to the rightful beneficiaries, regardless of whether they died testate or intestate. Only property owned in the decedent’s sole name and without a valid beneficiary designation is subject to probate administration.
A corporation established for the purpose of practicing a profession, such as engineers, lawyers, accountants, or doctors. Shareholders must have a license to practice in their given profession. A professional corporation can be recognized by the initials “P.C.” at the end of its name.
Anything that is owned, be it real property or personalty.
One who owns a proprietorship or business. Often references are sole proprietor, who is one who exclusively owns a business and has not created a legal entity in which to conduct their business affairs, such as a corporation, partnership or limited liability company.
A person who is under a court-ordered conservatorship as a result of being declared legally disabled (either totally or partially) by a court.
Person who is authorized by another person to act for him, usually to vote for him at a meeting as a shareholder of a corporation. Written authorization given by one person to another so that the second can act for the first.
Deed by which the grantor releases all his interest in property by passing any interest, claim, or title in the property which he has. The grantor makes no warranties or covenants for title in a quitclaim deed. The deed only conveys whatever interest the grantor has, which may be all or nothing.
Land and permanent attachments to the land, including buildings, fences, and all the permanent attachments to the buildings, including heating, plumbing, lighting, masonry, and other fixtures.
Real Estate Transactions
A diverse area of practice that focuses on protecting residential and business clients’ interest in real property that is being sold, purchased, leased, developed and exchanged.
Land (including buildings and other permanent attachments to the land) and the rights arising out of land. Real property is distinguished from “personal property,” which is temporary and movable in nature.
Wills made by two or more persons, such as a husband and wife, with identical provisions and each will favoring the other person. If done in one will, it is a joint and reciprocal will.
State statutes providing for the official recording of land or estate interests, as a means of giving constructive notice of ownership to other rights in property. In Missouri, deeds and other documents related to real estate are recorded with the recorder of deeds of each county where the land is located.
The owner of real property as stated on public records, or the owner of a security as stated on corporate records.
One who is entitled to take what is left over of a piece of property after someone else takes a portion out of that property, whether it be real estate or the assets within a probate estate or trust. See also remainder interest.
The right of a remainderman to receive what is left of an estate or piece of property after some portion of that estate or piece of property has been given to someone else. In real estate, if an owner gives a life estate to one person, and the rest to a third person, the third person is said to have a remainder interest. In the estate planning context, the remainder interest would be all that a remainderman would receive after the payment of bills, administration expenses and other specific bequests and devises have been made.
Payment to the owner for the possession and use by the tenant of real or personal property.
One who represents another or acts on their behalf. Examples, of a representative include an agent, an executor, an administrator, a receiver, a trustee, a director or an officer.
A bequest/devise that disposes of the entire contents of the estate after all debts, specific bequest/devises, and costs are distributed. The person(s) who receive this portion of an estate are known as remaindermen.
That part of an estate which remains after the payment of charges, debts, legacies, and devises. The person(s) who receive this portion of an estate are known as remaindermen.
One who argues against an appeal by the petitioner or is charged with being disabled and/or incapacitated. In certain circumstances, a respondent would be in a similar situation as a defendant.
Implied in law, this occurs when a trust must be created to fulfill the apparent intentions of the parties, who dispose of property for another’s benefit without expressly creating a trust. A “resulting trust” differs from a “constructive trust” which is created contrary to the parties apparent intentions, often in the presence of fraud or undue influence.
A report of information filed with the government, such as tax return.
A ruling published by the IRS setting forth a specific set of facts and the tax laws that would apply to those facts.
That which may be voided, withdrawn, or canceled. In the estate planning context, wills and trusts are considered revocable under most circumstances, unless otherwise stated.
A trust that can be amended or revoked by its grantor.
This term is used to describe how a corporation is taxed for federal income tax purposes. A corporation or LLC that has made an election with the IRS to be taxed as a small business corporation under Subchapter S of the Internal Revenue Code is an S Corporation. Not all corporations will qualify to be an S Corporation as there are certain restrictions on the capital structure of the company as well as the number and types of eligible shareholders.
Scope of Authority
In the law of agency, the range of acts which the agency has not only explicitly authorized the agent to perform, but also those acts which are apparently or impliedly delegated to the agent.
Secretary of State
In most state governments, an elected official charged with registering corporations, securities, partnerships, limited liability companies, fictitious names, and other formal duties with respect to licensing and recording. The secretary of state commonly serves as a central filing location for financing statements filed to perfect security interests in personal property.
The real or personal property solely owned by a person who also owns another property jointly with another person in a marital or business relationship.
Those assets solely owned by a married person and which are not jointly owned by both partners in the marriage.
A person who creates a trust and normally transfers property to it. May also be known as a grantor.
Simultaneous Death Act
A uniform state law adopted by most states which provides for the distribution of property, when distribution depends on the time of death of more than one person and there is not enough evidence to determine that they died other than simultaneously.
A business that is owned by a single natural person without the creation of a separate business entity and is characterized by unlimited liability exposure to the owner. A sole proprietorship only lasts as long as the owner is alive and cannot have perpetual existence like a corporation or limited liability company.
Special Needs Planning
A diverse area of practice that focuses on providing for and improving the quality of life of individuals with special needs while also protecting their eligibility for state and federal benefits.
Special Warranty Deed
A deed in which the grantor of real property only agrees to defend and protect the grantee’s interest in and title to the property against all claims that arise out of the grantor’s interest in the property.
The giving of a gift of a specific item of personal property to a person as set forth in a will.
A trust established for the benefit of a person that has restrictions attached to it so as to guard against that person’s misuse or wasting of the trust assets and to generally protect the trust assets from the creditors of the beneficiary.
Statute of Frauds
Law that holds that certain contracts may not be enforced unless there is some writing signed by the parties to be charged with an obligation indicating that there was an agreement. Contracts for the sale of land are subject to the statute of frauds.
A person’s equity and ownership interest in a corporation, generally referenced by a stock certificate of recorded on the books of the corporation.
A written instrument which indicates ownership of a designated number of shares in stock of a corporation.
Dividend distributed by a company to its stockholders of its earnings and profits.
A person who owns shares of stock of a corporation and therefore has an ownership interest in the corporation.
Agreement whereby a lessee grants his rights and interest in a lease to a third person for a period of time less than the lease. Permission may or may not be required from the lessor prior to entering into a sublease arrangement.
One who immediately follows another, such as one who takes an incumbent’s place or position after the incumbent departs. An example would be a successor trustee to a trust.
A contract between a surety, such as an insurance company, and another person acting in a fiduciary capacity and which states that the surety will guarantee the fiduciary will financially, lawfully and completely discharge their fiduciary obligations. Personal representatives and conservators are often required to post a surety bond.
Right to property or some other interest that a person possesses because he has outlived another.
In property law, referring to things with a definite physical existence, such as a car or jewelry, “Intangible property” is not physical and would include copyrights, an easement, goodwill or rights under a contract.
The money or rate of money paid to government by its citizens for government services. A tax may be assessed on income, property, business, sales, estates, roads, mining, gifts, excess profits, capital gains, etc.
A situation in which there is some dispute between a taxing authority, such as the Internal Revenue Service or the Missouri Department of Revenue, and a person or business that is alleged to owe a tax to that taxing authority. The tax issue can be an income, employment, sales, use, property, excise or some other form of tax. Sometimes the dispute involves whether a tax liability exists at all or the amount claimed due is proper. Other times, the amount due may not really be in issue, but rather, there is a disagreement over collecting the amount due.
The gross estate of a decedent, reduced by allowable deductions that is subject to an estate tax.
The value of a gift, after adjusting for any allowable deductions that is subject to a gift tax or exceeds the annual gift tax exclusion amount.
The amount of income taxed, at varying rates, depending on the amount, and generally derived from the gross income minus allowed deductions.
An independent federal court that hears disputes between a taxpayer and the IRS involving deficiencies or over-payments of taxes.
That which is not subject to tax. Either specific items purchased can be tax exempt, certain purchasers may be able to purchase any and all items without paying tax on those purchases, or the income received by a taxpayer may not be subject to the income tax.
One who is liable for a tax or responsible for filing a tax return.
Tenancy by the Entirety
Ownership of property by a husband and wife together so that upon the death of either spouse the other will take full and complete ownership of the entire property. Neither spouse can sell the property without the consent of the other.
Tenancy in Common
Undivided ownership in property by two or more persons, each having the same right to the use and possession of the property. Thus, each owner may separately partition, convey, sell, or dispose by will his share of the property.
Generally speaking, one who possesses real property. The term is normally used when referring to someone who possesses real property under a lease given by the owner or landlord, subject to the landlord’s title.
The condition of having left a will at one’s death, as opposed to “intestacy,” having died without leaving a will.
The measure of mental capacity one must possess while making and executing a will or trust in order for that will or trust to be valid. To satisfy this demand, a testator must generally understand the nature of his or her business, and comprehend the nature and extent of the property and the persons who would customarily receive their estate at their death.
Disposition of property by gift, will, deed, or contract, which takes effect only upon the death of the grantor.
A trust created in a Last Will and Testament which does not become effective until the death of the person who wrote the will.
Having left a will at one’s death, as opposed to “intestate,” having died without leaving a will.
Male/female person who writes a will.
In property law, the right to own and possess real and personal property. As applied to real property, “title” identifies the legal owner of the land.
Transfer on Death
A type of non-probate transfer usually used on motor vehicles, stocks or brokerage accounts, etc.
An arrangement whereby property is transferred (by a settlor or grantor) to another person (the trustee) with the intention that the property be used for the benefit of the grantor and/or other persons or entities, who are referred to as beneficiaries.
An area of law in which an attorney and their staff assist individuals appointed as Trustees with properly managing trust assets, fulfilling their legal obligations to the beneficiaries of the Trust, as well as protecting themselves from liability.
A person or institute who is in charge of and takes care of the assets of a trust. A trustee owes fiduciary duties to the beneficiaries and must treat all classes of beneficiaries, either current or future, equally and fairly.
The document which states the terms and conditions of the trust and dictates the conduct of the trustee.
One who creates a trust. Also may be called “settlor” or “grantor”.
An interest or right in property, in which the tenant has an equal right to use and enjoy the entire property.
Uniform Transfers to Minors Act
A uniform law adopted by most states which provides for the means of making a gift in trust to minors. The Act includes statutory methods for managing such gifts. The Act replaces the Uniform Gifts to Minors Act.
Corporate stock that is authorized by the articles of incorporation but not issued to any shareholder. Also known as treasury stock.
A fixed right to receive an interest in property, whether now or in the future, which cannot be taken away and is not contingent upon the happening of any other event. This should be contrasted with a contingent interest, which may or may not vest upon the happening or occurrence of any particular event.
An area of law in which an attorney and their staff assist veterans and their families obtain benefits that are available due to service or service connected injuries, disease or death. This area of law is often part of elder law planning for veterans and their families.
An arrangement by which shares of stock in a corporation are pooled and held in trust for the purpose of voting them at stockholders meetings. Voting trust are generally created for the purpose of electing officers or controlling the activities of the corporation.
A person who is under a court-ordered guardianship, usually a minor or someone who has been declared to be legally incapacitated.
Deed in which the grantor warrants that the title is free of encumbrances except for those noted in the instrument or otherwise of record. The usual warranties included are seisin, right to convey, quiet enjoyment, freedom from encumbrances, and defense of title against all claims.
A document by which a person provides instructions for the disposition of his or her property upon their death. You may also nominate a guardian for any minor children.
The liquidation of a partnership or corporation by finishing current business, settling accounts, turning property into cash, and splitting up the assets. Winding up may be voluntary or involuntary, such as when it is court ordered. Liquidation procedures are usually prescribed by state statutes.