Within every expert milieu there is a specific jargon that develops and in a lot of cases terms that are sort of wordy are lowered down to the initials that represent them.
These acronyms are in some cases then used as “words” in their own right, but those who are not knowledgeable about the field may not recognize them. Estate planning is no different in this regard, and below you will find a few acronyms that you will inevitably discover when you are looking into the topic.
In the field of estate planning the initials QPRT stand for “certified individual home trust.” These trusts are useful tools for individuals who require to get rid of the value of their homes from their estates to lower their estate tax liability. You put your home in the QPRT and name your successor as the beneficiary of the trust. You can then live in the house totally free of rent for a duration of time that you elucidate in the initial contract, so nothing tangible modifications in your life but your house is no longer part of your estate for tax purposes.
POD and TOD Accounts
The initials POD stand for “pay on death,” and likewise, TOD means “transfer on death. You can open one of these accounts at your bank and call a recipient. When you die the possessions end up being property of your called recipient straight and the deal does not have to go through probate.
For estate planning legal representatives the acronym POA represents the legal instrument known as a “power of attorney.” When you execute a power of attorney you are empowering somebody to act in your behalf, and this person is referred to as your attorney-in-fact.
An IRA is an “individual retirement account,” and the typical kinds of Individual retirement accounts that retirement planning lawyers suggest can include conventional Individual retirement accounts, Roth IRAs, SIMPLE IRAs, SEP IRAs, and self-directed IRAs.