Glossary
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Actuarial
As used in planned giving, refers to the factors used to calculate the
value of lifetime payments to individuals or organizations.
Appreciated Property
Securities, real estate, or any other property that has risen in value since
the donor acquired it. Generally, appreciated property held by the donor
for a year or more may be donated at full fair market value with no capital
gains cost.
Annuity
A contractual arrangement to pay a fixed sum of money to an individual at regular
intervals. The charitable gift annuity is a gift to Advocate Charitable Foundation that
secures fixed lifetime payments to the donor and/or another individual.
Adjusted Gross
Income ("AGI")
The sum of an individual’s taxable income for the year is the total
at the bottom of the first page of form 1040. Individuals may deduct charitable
cash contributions up to 50% of AGI; they may deduct gifts of appreciated securities
and appreciated property up to 30% of AGI.
Appraisal
An assessment of the value of a piece of property. Benefactors contributing
real or tangible personal property (art, books, collectibles, etc.) to us must
secure an independent appraisal of the property to substantiate the value they
claim as a charitable deduction.
Basis
The donor’s purchase price for an asset, possibly adjusted to reflect
subsequent costs or depreciation. If Mrs. Quinn bought stock for $100 per share,
her cost basis in the stock is $100 per share.
Beneficiary
The recipient of a bequest from a Will or a distribution from a trust.
Bequest
A transfer of property to an individual or organization under a Will
or Trust.
Capital Gains Tax
A federal tax on the appreciation in an asset between its purchase and
sale prices.
Cost Basis
See Basis, above.
Endowment Fund
Funds permanently set aside for the long-term benefit of a non-profit.
Income generated is used to support on-going project. Principal may not be
touched.
Estate Tax
A federal tax on the value of the property held by an individual at
his or her death (paid by individual's estate, not the heirs or recipients
of bequests). By contrast, state inheritance tax is applied to the value of
bequests passing to beneficiaries; it is also paid by the estate before the
distributions are made.
Executor
The person named in a will to administer the estate (known in some states
as the "personal representative").
Fair Market Value
The price that an asset would bring on the open market.
Grantor
The individual transferring property into a trust.
Income Interest
The right to receive the income generated by the assets of a trust.
K-1 (also 1099-R)
The IRS forms that we send our life-income gift participants detailing
how payments they received from their gifts during the year will be taxed.
Life Income Gift
A planned gift that makes payments to the donor and/or other beneficiaries
for life or a term of years, then distributes the remainder to charity.
Personal Property
Any property other than Real Property.
Personal Representative
See Executor, above.
Real
Property
Land and structures built on land.
Remainder Interest
The balance of a trust after the Income Interest (see
above) has been distributed. A charitable remainder trust pays income to the
donor or other people and then pays the balance to charity at the end of its
term.
Remainderman
A legal term for the individual or organization who receives the balance
of the trust after the income interest has been satisfied.
Tangible Personal Property
Personal property you can touch. For example paintings or other artwork, boats,
and antiques.
Testator
The individual making the Will.
Trust
A transfer of property by the grantor to the care of an individual or
organization, for the benefit of the grantor or others.
Trustee
An individual or organization that carries out the wishes of the person
who made the trust (known as the "grantor") by distributing the trust's
income and assets according to the terms of the trust.
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