Estate Planning & Trusts: The Ultimate Glossary for T&E in NJ

Use this A–Z to translate lawyer-speak into decisions you can act on. NJ-specific notes included where they matter most.

How To Use This Glossary

Skim alphabetically or use your browser’s Find tool. Terms are kept short, practical, and cross-referenced. If a definition says “See also,” those are related levers you might combine in a real plan. When in doubt: we handle all of this for you—strategy → drafting → funding → maintenance.

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A

A/B (A–B–C) Trusts
Classic married-couple structure that splits at first death into a Credit Shelter Trust (CST/B-trust) and a Marital/QTIP (A-trust) (and sometimes a C-share for GST or charity) to optimize taxes and protection. See also: Clayton Election, Portability.

Able Account (ABLE)
“Achieving a Better Life Experience” savings for eligible disabled individuals; tax-favored with contribution and distribution rules. Coordinates with SNT and ISM rules.

Ademption
When a specifically gifted asset no longer exists at death (sold, given away), the gift fails unless your documents say otherwise.

Administration (Estate Administration)
Post-death process: marshaling assets, paying creditors, taxes, and distributing to beneficiaries. In NJ, probate/administration is public and often results in 3–7% all-in drag once fees, commissions, bond, appraisals, and delay are tallied.

Advance Directive (AD) / Health Care Proxy
Document naming who makes medical decisions if you can’t, plus your wishes (life support, pain control). Pair with HIPAA Authorization.

Alternative Valuation Date (§2032)
Optional estate-tax valuation six months after death (or earlier sale date) if it lowers estate tax. Requires timely Form 706.

Ancillary Probate
Extra probate in another state where the decedent owned real estate. Avoid with an RLT funded with out-of-state properties (or entity titling).

Annual Exclusion Gift (IRC §2503(b))
Amount you can gift per recipient per year without using lifetime exemption (indexed). Needs present interest; for trusts, use Crummey powers.

Applicable Exclusion / Basic Exclusion Amount
Federal estate/gift tax exemption. Moves with law; you can “port” unused amount (see Portability/DSUE).

Asset Location
Which assets sit in taxable, traditional IRA, Roth IRA, or trust—done to minimize taxes. Aligns with trust distribution standards and SECURE Act.

Asset Protection
Structuring to reduce creditor/divorce exposure. In estate planning, think CST/QTIP, spendthrift, SNT, LLCs, and careful powers. NJ does not have a DAPT statute; consider LAPT with caution.

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B

Bargain & Sale Deed (NJ)
NJ’s common deed for transferring property (often into an RLT). We use with title company and lender coordination.

Basis / Step-Up In Basis
Tax cost of property. At death, many assets receive a step-up to fair market value. QTIP can get a second step-up at the survivor’s death; CST generally does not.

Beneficiary Designation
Who inherits non-probate assets (IRAs, life insurance, TOD/POD). Must match your trust terms to avoid conflicts.

Bond (Fiduciary Bond)
Insurance a court may require from executors/guardians/trustees managing property. Premium paid by the estate/trust.

Bypass Trust (Credit Shelter Trust)
See CST.

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C

Capacity (Testamentary / Contractual)
Legal ability to make a will or sign documents. If lost, use Guardianship or rely on prior DPOA/AD.

Charitable Lead Trust (CLT)
Charity gets income now; family gets remainder later—often gift/estate-tax efficient.

Charitable Remainder Trust (CRT)
You (or someone you choose) get income; charity gets remainder. Can defer capital gains on sale of appreciated assets.

Children’s Safety Plan (CSP)
Our “first 48 hours” toolkit: temporary/standby guardians, HIPAA, medical consents, school releases, caregiver cards—so kids never enter state custody while courts catch up.

Clayton Election
Post-mortem toggle that lets an executor elect how much “marital trust” becomes QTIP vs how much becomes CST after seeing real values and needs.

Community Property
Not a NJ system. Matters if you own in a CP state (basis and characterization issues). We flag and plan around it.

Conservatorship (NJ)
Voluntary, property-only court appointment when a person consents to help managing finances. No incapacity finding. Distinct from Guardianship.

Contest (Will/Trust Contest)
Challenge to validity or terms (capacity, undue influence, execution). We mitigate with clean process, funding, and no-contest clauses (enforceability varies).

Corporate Trustee
Bank or trust company serving as trustee—useful for complex assets or family conflict.

Crummey Power / Crummey Notices
Temporary withdrawal rights given to trust beneficiaries so gifts qualify for annual exclusion. Requires real notice, windows, and records.

Credit Shelter Trust (CST)
“Family” or “Bypass” trust funded at first death up to the exemption; supports spouse under HEMS, keeps growth outside survivor’s estate, adds protection.

Custodial Accounts (UTMA/UGMA)
Assets for minors under a custodian’s management; become the child’s outright at age of majority. We often prefer lifetime protective trusts instead.

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D

DAF (Donor-Advised Fund)
Easy, flexible charitable vehicle with upfront income-tax deduction and advisory privileges.

DAPTs / LAPTs
Domestic Asset Protection Trusts (not authorized in NJ) vs. Limited Access/Third-party trust planning. Courts have grown skeptical of DAPTs for grantors.

Decanting
Moving assets from one irrevocable trust to a new trust with improved terms (if statute or instrument allows). NJ follows UTC principles; facts matter.

Deceased Spousal Unused Exclusion (DSUE)
“Ported” exemption from first spouse to survivor via Form 706 (Portability).

Deed Of Gift / Quitclaim / Warranty / Bargain & Sale
Common deed types; NJ frequently uses Bargain & Sale. Choice affects warranties and title insurance.

Disclaimer (Qualified Disclaimer)
Beneficiary refuses a gift so it passes as the document directs (often to CST). Must be written, within 9 months, before accepting benefits.

Discretionary Trust
Trustee has discretion over distributions. Common for protection and tax planning.

Distributable Net Income (DNI)
Tax concept that limits how much of a trust’s income is taxed to beneficiaries vs. the trust.

DNR (Do Not Resuscitate)
Medical order about resuscitation. Often complements but is distinct from AD.

Durable Power Of Attorney (DPOA)
Financial authority that survives incapacity (until revoked). Core part of incapacity planning.

Dynasty Trust
Long-term, GST-exempt trust designed to last for generations. Requires GST allocation planning.

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E

Elective Share (Spousal Rights)
Statutory minimum share a surviving spouse can claim despite the will. NJ has an elective share statute; planning must respect it.

ESBT / QSST
Electing Small Business Trust and Qualified Subchapter S Trust—trust types that can hold S-corp stock within IRS rules.

Estate Tax
Federal transfer tax at death. NJ repealed its estate tax; NJ still imposes inheritance tax on transfers to certain non-Class-A beneficiaries.

Executor / Personal Representative
Person/entity managing probate estate. Coordinates with trustee if an RLT exists.

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F

Family Limited Partnership (FLP) / LLC
Entities used for management, liability, and potential valuation discounts (marketability/minority) in advanced planning.

Funding (Trust Funding)
The non-optional act of titling assets to, or aligning beneficiaries with, your trust(s). No funding = plan failure.

Form 706 / 709
Federal Estate/GST return (706) and Gift tax return (709). 706 also elects Portability and QTIP; 709 allocates GST and split gifts.

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G

General Power Of Appointment
Power to appoint to yourself/estate/creditors—dangerous for asset protection; causes estate inclusion.

Generation-Skipping Transfer (GST) Tax
Tax on transfers to “skip persons” (grandchildren, certain trusts). Use exemption and reverse QTIP to design dynastic plans.

GRAT / GRUT
Grantor Retained Annuity/Unitrust—estate-freeze vehicles that shift appreciation above the retained payout to beneficiaries at low transfer-tax cost.

Grantor Trust
Trust treated as owned by the grantor for income tax (but maybe not for estate tax). Common for IDGT, ILIT, SLAT.

Guardianship (Adult/Minor)
Court appointment for personal and/or financial decisions when a person lacks capacity (adult) or is a minor. Can be limited or plenary. NJ: Probate Part.

Gun Trust (NFA)
Trust designed for Title II firearms compliance, shared possession, successor trustees, and interstate moves.

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H

HEMS
Health, Education, Maintenance, Support—protective distribution standard common in spouse/child trusts.

Holographic Will
Handwritten will. NJ may recognize if it meets strict proof requirements; best practice is a formal, attorney-supervised signing.

Homestead (NJ)
NJ does not offer the broad Florida-style constitutional homestead creditor protection. There are property tax relief programs that change over time; they’re distinct from asset-protection homestead.

HIPAA Authorization
Allows named persons to access your medical info. Pair with AD.

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I

IDGT
Intentionally Defective Grantor Trust—estate freeze: grantor pays income tax; trust grows transfer-tax efficiently.

ILIT
Irrevocable Life Insurance Trust—owns life insurance outside your estate. Needs Crummey administration.

In-Kind Support & Maintenance (ISM)
SSA term for food/shelter benefits that can reduce SSI. SNT distributions must be planned around ISM.

Inheritance Tax (NJ)
Tax on transfers to non-Class-A beneficiaries (e.g., siblings, nieces/nephews, friends). Class A (spouse/lineal) is exempt.

Intestacy
Dying without a valid will. NJ statutes decide heirs; no privacy; often probate and potential court-appointed guardians for minors’ property.

Irrevocable Trust
Difficult to change; used for protection/tax/benefits planning (ILIT, SNT, SLAT, IDGT, GRAT, MAPT).

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J

Joint Tenancy (JTWROS)
Co-ownership with right of survivorship; bypasses probate. Must fit the plan.

Judicial / Nonjudicial Settlement Agreement (NJ-UTC)
Agreement among interested parties to resolve certain trust matters without court (within statute). Facts matter.

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K

Kids’ Lifetime Trusts
Ongoing trusts for children at your death—protect from divorce/creditors and pace distributions (ages/milestones/HEMS).

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L

Lasting Message / Legacy Interview
Recorded video/audio to your heirs about values, stories, instructions; included in our Trust/Advanced Plans.

Lapse / Hanging Powers (Crummey)
Unused withdrawal rights that lapse up to the 5-and-5 limit; excess “hangs” into future years—track carefully.

Letters (Testamentary/Of Administration/Of Guardianship)
Court documents proving a fiduciary’s authority.

Lifetime Exemption (Unified Credit)
Cumulative amount shielding lifetime gifts and transfers at death from transfer tax. Separate from annual exclusion.

Limited vs. Plenary Guardianship
Narrow powers vs. full powers. NJ presumes limited where possible.

Living Will
Part of AD stating end-of-life wishes (e.g., DNR, DNI).

LLC-Wrapped Real Estate
Holding property in an LLC for liability and administrative clarity; coordinate with trust ownership of the LLC interest.

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M

MAPT (Medicaid Asset Protection Trust)
Irrevocable trust designed to begin the Medicaid look-back and protect assets for a healthy spouse/heirs. Complex; fact-sensitive.

Marital Deduction
Unlimited federal deduction for qualifying transfers to a citizen spouse at death (QTIP or outright). For non-citizen spouse, see QDOT.

Merger Doctrine (Trusts)
If the same person is sole trustee and sole beneficiary of all interests, trust may collapse; avoided by design.

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N

NFA (National Firearms Act)
Federal law governing certain firearms; Gun Trusts coordinate compliance and succession.

No-Contest Clause (In Terrorem)
Discourages contests by penalizing challengers. Enforceability varies and has exceptions (e.g., probable cause).

Non-Citizen Spouse
Marital deduction requires QDOT or citizenship. Portability does not transfer to non-citizen spouse unless rules met.

Non-Probate Transfer
Assets passing by title/contract (JTWROS, POD/TOD, beneficiary). Must align with your trust plan.

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O

Outright Distribution
Beneficiary receives funds with no trust protection. Often avoided in favor of lifetime trusts.

Option to Adjust / Unitrust (Trust Accounting)
Trustee tools to balance income vs. total-return investing for fairness, especially in QTIPs.

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P

Payable on Death (POD) / Transfer on Death (TOD)
Beneficiary designations on bank/brokerage accounts. Coordinate with your RLT/SRT.

Per Capita / Per Stirpes
Distribution methods to descendants. We explain and pick intentionally.

Portability (DSUE)
Filing Form 706 to transfer unused exemption from the first spouse to the survivor. Belt-and-suspenders with CST/QTIP.

Pour-Over Will
Catches assets outside your RLT at death and “pours” them into the trust (may require probate for those assets).

Power of Appointment (General/Limited)
Authority to redirect trust property. Limited powers add flexibility without estate inclusion.

Power of Attorney (DPOA)
See DPOA.

Prudent Investor Rule (UPIA)
Trustees must diversify and invest prudently under total-return principles.

Probate (NJ)
Court process validating wills and appointing executors; public; creditor-first; commonly 3–7% all-in drag when you add fees, commissions, bond, appraisals, and delay. Avoid/minimize via RLT + funding.

QDOT (Qualified Domestic Trust)
Marital-deduction trust for a non-citizen surviving spouse; special requirements and withholding apply.

QPRT (Qualified Personal Residence Trust)
Transfer of residence to a trust retaining a term interest; can discount gift value; estate/tax and practical use trade-offs.

QTIP (Qualified Terminable Interest Property)
Marital trust: spouse gets all income (and often HEMS access to principal); remainder locked for your beneficiaries; elected on Form 706.

QSST (Qualified Subchapter S Trust)
A trust that qualifies to hold S-corp shares with one income beneficiary who reports the income.

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R

Remainder / Remaindermen
Who receives what’s left after a prior interest (e.g., spouse’s life interest in QTIP) ends.

Required Minimum Distribution (RMD)
Mandatory retirement account distributions (age- and plan-based). SECURE Act changed timing for many beneficiaries.

Revocable Living Trust (RLT)
Your private, changeable, probate-avoiding hub. Needs funding to work.

Reverse QTIP Election
Election under §2652(a)(3) to treat the decedent as transferor of QTIP property for GST purposes.

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S

Schedule M
Estate tax return schedule for marital deduction/QTIP elections.

SECURE Act (Retirement)
Overhauled inherited IRA rules: most non-spouse beneficiaries face a 10-year payout. “Eligible Designated Beneficiaries (EDBs)” have exceptions. Draft SRTs carefully (accumulation vs conduit).

Separate Account Rule (IRAs)
Each beneficiary’s share must be segregated by deadline to preserve certain payout options.

SLAT (Spousal Lifetime Access Trust)
Irrevocable trust benefiting a spouse; shifts growth out of estate while preserving family access. Avoid reciprocal trust traps.

Special Needs Trust (SNT)
Trust designed to preserve SSI/Medicaid while funding supplemental needs. Coordinate with ABLE and ISM rules.

Spendthrift Clause
Blocks creditors (and beneficiaries themselves) from forcing distributions.

Sprinkle/Spray Power
Trustee discretion to allocate among a class of beneficiaries to meet needs/taxes.

Standalone Retirement Trust (SRT)
Trust designed solely for retirement accounts; often accumulation-style post-SECURE Act for protection and tax pacing.

Standby Guardian (NJ)
Pre-arranged caregiver who steps in upon triggering events (incapacity, deployment). Key CSP component.

Step-Transaction / Reciprocal Trust Doctrine
Anti-abuse rules courts use; relevant when spouses create mirrored SLATs.

Surrogate (NJ Surrogate’s Court)
County office issuing Letters of administration/guardianship; handles many probate filings.

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T

Tenancy by the Entirety (TBE)
Married-couple real estate ownership form with survivorship and some creditor protection; recognized in NJ for real property.

Tenants in Common (TIC)
Co-owners with distinct shares; no survivorship. Useful for modeling and disclaimer planning.

Testamentary Trust
Trust created under a will at death (as opposed to inter vivos). Requires probate to spring into existence.

Totten Trust
Old name for POD/TOD-style bank accounts.

Trust Protector
Third party with powers to modify administrative/protective terms, replace trustees, or adapt to law changes without court.

Trustee (Individual/Corporate)
Fiduciary who administers the trust; owes duties of loyalty, prudence, impartiality; must account.

Trust Funding (re-stated because it’s that important)
Deeds, titles, and beneficiaries aligned now. A trust without funding is a pretty binder that fails.

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U

Uniform Trust Code (UTC) / NJ Trust Code
Model/state law framework governing trusts (NJ Title 3B). Sets default rules for modification, notices, and fiduciary duties.

UPMIFA
Investment standard for charities/endowments; occasionally relevant to charitable trusts and DAF oversight.

UTMA/UGMA
Uniform Transfers/Gifts to Minors Acts—statutes enabling custodial accounts.

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V

Valuation Discounts
Reductions in value for estate/gift tax on minority/illiquid interests (e.g., FLP/LLC). Must be real and well-documented.

Virtual Representation
Allowing certain parties to represent others’ interests in trust matters, simplifying consents.

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W

Will
Your instruction set that still requires probate to work; we pair with an RLT and use a Pour-Over Will as a safety net.

Will Substitute
Non-probate transfer devices: RLT, beneficiary designations, JTWROS, TOD/POD.

Will Contest
See Contest.

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X–Z (Odds & Ends)

§6166 (Estate Tax Deferral)
Installment payment election for closely held business estates meeting thresholds.

1031 Exchange
Tax-deferred real estate swap; coordinate with trust/LLC ownership and successor planning.

1099-R / 5498
Retirement account tax forms; coordinate with SRT administration.

1202 (QSBS) / 83(b)
Qualified Small Business Stock exclusion / election to include restricted stock at grant; advanced planning intersections with trusts and IDGTs.