An advance directive is designed to let a physician know what your wishes are with respect to end-of-life decisions. An end-of-life decision is a decision whether to keep you on a life-support machine or not.
The term “affidavit” means that you signed the document under penalty of perjury and that you take an oath in front of a notary that everything that’s in the document is true.
An agent is someone whom you appoint to act for you as if they were you.
An alternate agent is someone who will act if your first named agent either declines to act, is not able to act, or has died before the action is required.
An annuity is an investment that pays out the proceeds of the investment to a designated beneficiary upon your death.
An attorney-in-fact is the agent you appoint under a power of attorney for financial management to sign your name for you to documents.
The beneficiary of a trust or a will is the person who receives the benefit from the document. For your will, the beneficiary is the person or the people who receive the assets after you die; and for the trust, you are the beneficiary during your lifetime and upon your death, those whom you’ve designated to receive the assets in your trust are your beneficiaries.
A blended family is a husband and wife who have children of a prior marriage and possibly children of their marriage as well.
Blended Family Trust
If you want to leave less than 100 percent (but not less than 50 percent) of your assets to the surviving spouse and the remainder of the other half of the assets to another beneficiary or group of beneficiaries use the Blended Family Revocable Trust. The Blended Family Revocable Trust provides that if you’re the first spouse to die, your half of the assets can be distributed to beneficiaries, other than your surviving spouse.
Many people in the United States today live in a blended family. This means that they have been married before and have children from a prior marriage, and may possibly have children together from their current marriage. The concern that most people have is if they join their assets together into a single trust and then die before their spouse, will their half of the estate actually go the children that they want it to go to?
Why is this a concern? Because if you die first and you leave all of your assets to your surviving spouse, your surviving spouse has the right to change the trust and have all of the assets go to someone different than you originally selected. Therefore, we've provided a couple of options for the blended family.
First, you can choose to do two separate property trusts, so that you know for sure that upon your death, the assets in your trust will go to your children. If you want to leave your separate property (for assets you owned prior to marriage) to someone other than your spouse, use the Separate Property Trust. Please note you should also have a Married Revocable Trust or a Blended Family Trust for assets you own jointly with your spouse.
Second, you can choose to work with an attorney to create an irrevocable trust share upon your death that will allow your surviving spouse to have access to the assets, but not to change who gets what's left of the assets upon their death. Again, because of the irrevocable nature of such a trust and the technicalities involved in such a trust, we recommend that you see a qualified attorney if you choose this version.
Lastly, you can create a blended family trust, which means that all assets transferred to the trust are then owned equally by both you and your spouse; you each have the right to leave your half the way that you want to when you die. If you die first and your children are under the age of 30 when you die, your spouse is appointed to be the trustee for their portion and will manage it for them until that time. If they're over 30, then the surviving spouse who is still the trustee can decide which assets of the trust to buy or sell in order to come up with the funds to pay out the shares that go to the children. You must consult an attorney if you wish to leave more than half of the total estate to someone other than your spouse the Ultimate Protection Portfolio assumes that you own your assets jointly.
CA Trust Law
The laws of the state of California will govern the trust document that you create under the Ultimate Protection Portfolio. Many people ask why we do this and why this is legal. The reason that we do this is that California law is a very modern and user-friendly law in the area of trusts. In my opinion, the laws of California are more favorable to the consumer than those of any other state. The principle that allows us to choose California law to govern our documents, even though we may live in a completely different state, is based on the same principles that allow people to be Delaware corporations even though they’ve never set foot in the state of Delaware. If you buy an automobile that was made in Detroit, I can guarantee you that the contract will probably be governed under the laws of the state of Michigan. The U.S. Supreme Court has said that we may choose which state’s law will govern certain legal matters. This ability to “choose our forum,” as it’s called, is a sophisticated planning technique that’s usually used in very expensive proceedings. We’re making this available to you through the Protection Portfolio so that you can benefit just like the wealthiest families in the United States by choosing the law that’s best for you.
The actual principle is stated in Section 2681 of the Restatement of the Law Second, Conflicts of Laws, 1969, and the actual passage says that a settlor may designate which state’s local law will govern construction of the terms of the trust, regardless of whether or not the designated state has any connection with the trust.
Certification of Trust
A certification of trust is a summary of the terms of your trust that can be given to a third party (such as a bank or a credit union) when you open an account in your name as trustees of your trust. That way, you don’t have to provide the entire trust to the institution.
A contingent beneficiary is the person or trust that you designate to receive the proceeds of a life-insurance policy, an IRA, pension benefit, or annuity in the event that your primary beneficiary doesn't survive you or dies at the same time that you do.
The custodian under the Uniform Transfers to Minors Act is the adult person who has the right to control the assets for the young person until such time as that young person reaches the designated age.
Since marriage became legal to same-sex couples, there are no benefits to being a domestic partner. The term has lost its legal significance. Using the term may also cause confusion. Only married people can claim Social Security through their spouse and be eligible for a number of other government benefits. Only married people are exempt from state and federal inheritance taxes. Only married people can obtain the double step up in tax basis on capital gains assets as provided for with the community property nature of the trust used in this kit. This is why we encourage people to marry.
Durable Power of Attorney for Health Care
A durable power of attorney for health care designates an agent to make health-care decisions for you as if they were you. The durable power of attorney for health care survives your incapacity and is valid all the way up until the time of your death.
Equal Shares to Lapse
When you designate that your assets are to be distributed in equal shares among a certain group of people, this means that only those people in that group who are alive at the time that you die are entitled to a share. So even if you had seven nieces and nephews at the time that you wrote your document, and you intended to leave your assets in equal shares to those seven nieces and nephews, if when you die there are only six of them alive, then the assets will be distributed in six equal shares.
The executor is the person that you designate in a will to carry out the provisions of the will both your personal wishes and your legal wishes.
Financial Power of Attorney
A financial power of attorney is the document that gives the person you designate as your agent or attorney-in-fact the authority to sign your name for you and legally bind you to the documents that are signed.
Financial Power of Attorney changing your Agent
If you decide the agent you appointed in your Financial Power of Attorney or Health Care Directive is no longer someone that you want acting in that capacity, then please execute a new Financial Power of Attorney naming a new agent. This replaces the prior dated Power of Attorney with the newly dated Power of Attorney. Deliver a copy of the newly dated POA to every person and institution that possessed a copy of the prior-dated POA. Give a copy to the newly-appointed agent. Please retain the original POA and keep it with your other trust documents.
Under the laws of some states, if you wish to leave less than one-half of what you own to a spouse or your children, then the spouse and children may contest the will or trust and force the courts and your estate to give them their fair share. This is what’s called a Forced Share.
Funding means taking the required steps to change the ownership of the assets you own from you as an individual, to you as trustee of your trust. For some types of assets, such as life insurance and IRAs, you’ll change the beneficiary designations.
The general partner of a limited partnership is the person or corporation that has the right to run the day-to-day affairs of the limited partnership. If you own a limited partnership interest and you want to assign that interest into your trust, you'll need the consent of the general partner.
The terms “grantor,” “trustor,” and “settlor” all mean the same thing. This is the person or people who originally create a trust document.
There are two ways that this term is commonly used: a guardian of the person and a guardian of the estate. A guardian of the person, for a minor child, is the individual who will decide where the child lives, where the child goes to school, and what religion the child practices, and he or she will have the ability to give consent for medical treatment.
A guardian of the estate is usually someone appointed by a court whose job it is to oversee the financial funds that are held for the benefit of a young person until such time as they reach the age of 18. Guardianships of the estate are usually supervised by the courts and require an annual accounting to the courts in order to remain in force.
Health Care Directive changing your Agent
If you decide the agent you appointed in your Health Care Directive is no longer someone that you want acting in that capacity, then please execute a new Health Care Directive naming a new agent(s). This replaces the prior dated Health Care Directive with the newly-dated Health Care Directive. Deliver a copy of the newly-dated POA to every person, health professional, doctor and medical institution that possessed a copy of the prior-dated Health Care Directive. Give a copy to the newly-appointed agent. Please retain the original Health Care Directive and keep it with your other trust documents.
The term “incapacity” is used in a variety of ways in different documents. In the Ultimate Protection Portfolio, incapacity has been carefully defined for you in each one of the essential documents. For most purposes, under the Ultimate Protection Portfolio, the definition of incapacity is the inability, due to a physical or mental reason, to handle your own money and business affairs in a way that protects you.
The term “incompetence” is defined in a variety of different ways by a variety of different courts. However, for the Ultimate Protection Portfolio, the definition that’s commonly used is a physical or mental inability to carry out your usual business affairs, whether or not a court has determined you to be incompetent.
Irrevocable Trust Share (must consult an attorney-not available in this program)
Upon your death it will allow your surviving spouse to have access to the assets, but not to change who gets what's left of the assets upon their death. Due to the irrevocable nature of such a trust and the technicalities involved in such a trust, we recommend that you see a qualified attorney if you choose this version.
The term “issue” means your lineal descendents. In other words, your children, grandchildren, and great grandchildren. Included in this definition are children who are legally adopted or children you tried to legally adopt (for example, you petitioned the court for the privilege of adopting a child but a legal barrier prevented it, which usually means the natural parent would not consent to the adoption, yet the child lived with you as a regular member of your household until the age of 18).
Limited Liability Company (LLC)
The limited liability company is a form of ownership that’s becoming more popular to protect assets from creditors without having as many formalities as a corporation. If you’re a member of a limited liability company, you’ll need to transfer the membership interest in the operating agreement to yourself as trustee of your trust.
A limited partner is someone who invests in a partnership but has no say in the day-to-day management and affairs of that partnership. If you're a limited partner, you’ll receive a K-1 income-tax form for your annual income-tax preparation. That form will give you the information as to who the general partner is, and if you’re creating a trust, you’ll need to contact the general partner to assign your limited partnership interest to the trust.
Living Revocable Trust
The term “living revocable trust” is commonly used to describe a trust in which you are the person who creates it, you are the person who benefits from it, and you are the person who manages it. A living revocable trust is created while you're alive and can be changed or revoked at any time up until your death.
Medallion Signature Guarantee
If you’re transferring the ownership of stocks or bonds, you’ll generally be required to have your signature “medallion guaranteed.” This is different from a notarization and can be provided only by a bank or a brokerage house.
A non-testamentary letter is simply a letter that you write, sign, and date in your own handwriting. We call it non-testamentary because it doesn’t require the official formalities of a will. It doesn’t require witnesses.
There are two common types of notarization: One is what is called an acknowledgement and one is called a jurat. An acknowledgement means that you take the document to a notary and you acknowledge to the notary that you did, in fact, sign it, and then you prove to the notary that you are, in fact, the person who is named there. You can prove who you are by showing some type of identification or having other witnesses swear to your identify. A jurat is a type of notarization in which the notary will give you an oath and you’ll swear under penalty of perjury that everything in the document is true.
The law is very technical with respect to distributions made to children. It presumes that you would never intentionally omit a child from your will or your trust. So if you have a child that you don’t want to leave anything to after your death, you must state this fact specifically in your trust and will. You have to say “I intentionally leave nothing to my child,” and designate that child’s name.
With so many people in our society living into their 80s and 90s, it’s more common for adult children to die before their parents. In order to plan for this possibility, we have provided within the trust the opportunity for you to set aside certain funds which can be used to help support an elderly parent without making that parent ineligible for possible public benefits.
Pay on Death
A pay on death designation makes it possible for a bank account or other type of asset to be paid to a designated beneficiary on your death. The limitation of pay on death accounts is that if the person you designate to receive the account on your death has also died or is unable to collect the account, then the account will probably be subject to probate.
This phrase means that you can choose to distribute your estate in amounts designated by percentages. This allows you to distribute your estate into equal or unequal shares and to distribute between individuals and organizations.
Pour Over Will
A pour over will is used in conjunction with a trust. If the trust is properly funded, there should really be no need for the pour over will; however, if you leave out a bank account or some other asset from the trust, the pour over will can provide that for that asset to become a part of the trust upon your death.
The primary beneficiary is the beneficiary who is designated to be the first in line to receive life-insurance proceeds, IRAs, or other benefits that designate a beneficiary.
Probate is the court-ordered proceeding in which title held in the name of someone who has died is transferred to the names of those who survive him or her.
Real property is real estate: a home, land, or a building—something that transfers ownership through the mechanism of a deed.
Residue of Estate
The residue of the estate is everything that’s left over after making any specific gifts that you may want to make.
Restatement of Trust
When you want to make a change to the trust, it’s easier to simply restate the entire trust. This way you don’t have to look at two different documents (the trust and an amendment) to figure out which terms of the trust are in effect. The Ultimate Protection Portfolio provides that you can restate your trust as many times as you need to. There’s a simple form for you to use and follow. However, be sure that you always keep the first trust you created so that you can prove in the future that this was the date of the original trust. Whenever you take title to assets in the future, even if you have restated the trust, the original date of signature will be the date of the trust.
Revocable Living Trust
A revocable living trust is a document that can be changed or revoked during your lifetime and is created while you’re alive.
A revocable trust is a trust that you may change or amend throughout your lifetime. If the trust is revocable, then the settlor’s tax I.D. number or Social Security number is the number that’s used to identify the trust for tax purposes. If the trust is created by a married couple, either spouse’s Social Security number can be used to identify the trust.
Right of Representation
The term “right of representation” comes to us from 600 years of the English common law. It means that if the person that you designate to receive a benefit under your will or trust dies before you or with you, then the share that they would have taken will go down to their children. So, if they were entitled to a 25 percent share of your estate, and they died with you, and they had three children, their three children would step up and represent their parent and take the 25 percent in equal shares among them.
The term “securities” is used to refer to stocks, bonds, and mutual funds.
A securities account is an institutional account that holds stocks, bonds, and money-market funds.
Separate Property Revocable Trust
If you want to leave your separate property (for assets you owned prior to marriage) to someone other than your spouse, use the Separate Property Trust.
Please note you should also have a Married Revocable Trust or a Blended Family Trust for assets you own jointly with your spouse.
The terms “settlor,” “grantor,” and “trustor” all mean the same thing: the person who originally creates a trust. Therefore, whenever you create a trust in the Ultimate Protection Portfolio, and you see the term “settlor,” that term will always refer to you.
Latin for position or site of property is where the property is treated as being located for legal purposes.
Special Needs Trust
You may have heard the term “special needs trust.” A special needs trust is a particular type of trust that’s designed to give benefits for a developmentally disabled child in such a way that you can leave that child assets and not make them ineligible for public benefits. Because this type of trust is an irrevocable trust, it’s a trust that will last for the entire lifetime of the developmentally disabled child. Because it's designed to make the child eligible for certain benefits, we recommend that you consult a qualified attorney in your state to prepare this type of trust.
A specific gift is when you describe the item that you want a beneficiary to receive. So, for example, if you want your daughter to receive your house, you would describe that specific gift by the address, city, and state in which the house is located.
The Successor Trustee is the person whom you name in your trust document to act for you or on your behalf if you are unable to act as trustee. A Sole Trustee means there is only one trustee who has the authority to act on behalf of the trust. There may be times when there are co-trustees (where two people have the right to sign on behalf of the trust) and times when there is a sole trustee (where only one person has the right to sign on behalf of the trust).
Tangible Personal Property
Tangible personal property is jewelry, paintings, clothing, furniture, and automobiles—basically anything in your house that doesn’t have a legal title to it.
The testator is the person who creates the will—that is, the one who is actually making the will.
If you own stocks in the form of an actual stock certificate or a bond in the form of the actual bond certificate, the transfer agent is the company who has the right and whose responsibility it is to change the ownership on those certificates and reissue them in your name as trustee of your trust. So in order to have a certificate for a stock or a bond reissued to you in your name as trustee of your trust, you must send it to the transfer agent.
The trustee is the person who has signing authority over all the assets in your trust. When you first create a trust, you’ll usually be your own trustee. Upon your death, resignation, or incapacity, someone else will act in your place as trustee.
The person who created the trust and owns the property contained into the trust.
UTMA stands for Uniform Transfers to Minors Act. This provision allows you to leave money or assets to a minor child and designate a custodian to care for those assets until such time as the child is 18, 21, or 25. The maximum age that one can leave assets in a custodianship account is determined by the state in which you live.
A will is a document that follows certain formalities in which you express what should happen to your body and to your possessions after you die. Generally, a will must be witnessed by at least two adult witnesses before it's considered valid.
A witness is someone who sees you sign a document and then signs under penalty of perjury that they saw you sign the document and believed that at the time, you knew what you were doing and were of sound mind.