For years after 2020, with respect to inherited IRA accounts and retirement plans, beneficiaries subject to this rule must empty the entire account by the end of the 10th year following the year of the account owner's (or eligible designated beneficiary's) death. • Notice 2022-53 provides relief for beneficiaries subject to the 10-year rule: The IRS will not treat a beneficiary of an inherited account in a plan or IRA who was subject to the 10-year rule and who failed to take an RMD for 2021 and 2022 as having failed to take the correct RMD. Retirement Topics - Beneficiary, irs.gov. • See eligible designated beneficiary.
An investing portfolio made up of 60% stock and 40% bonds. • "For many years, a large percentage of financial planners and wealth managers crafted portfolios for their clients that were composed of 60% equities and 40% bonds or other fixed-income offerings. These so-called 'balanced portfolios' performed rather well throughout the ’80s and ’90s. The fixed income portion of the portfolio acted as a strong ballast for equities in both bull and bear markets." Caleb Silver, Ask the Experts: Is the 60/40 Portfolio Dead?, Investopedia (Apple News link).
A trust for a minor where gifts for the minor child qualify for the gift tax annual exclusion if the child has to withdraw all of the trust assets at age 21. • Also called an "irrevocable minor's trust."
The reduction of a gift under a will when the estate's assets cannot pay all of the gifts after paying the legal obligations of the estate.
(1) Temporary suspension. • Example from Harbor Tech LLC v. Correa, 73 Misc.3s 1211(A), 2021 N.Y.Slip Op. 50995(U) (Kings Co. Civil Court Oct. 14, 2020, Stoller, J.): "ORDERED that the entirety of Petitioner's motion and the balance of Respondent Correa's cross-motion in Harbor Tech LLC v. Correa, Index # 60788/2019 (Civ. Ct. Kings Co.) remains in abeyance pending the stay of that proceeding . . . ."
(2) In property law, the opposite of vesting. • Black's Law Dictionary (10th Ed.) defines abeyance as "[a] lapse in succession during which no person is vested with title." • Example: "Allen, J. By the assignment of the 2d of July, 1875, and the acceptance of the trust by the defendants and Trimble the assignees named therein, the property real and personal of the assignors, vested in the assignees in trust for the creditors. The title did not remain in the assignors, nor was it in abeyance awaiting the giving of security by the assignees as required by the statute, or the performance of any condition subsequent to the assignment. The creditors of the assignors acquired an interest in the assigned estate, and could enforce the execution of the trust." Brennan v. Willson, 71 N.Y. 502 (1877).
Expenses that a real estate buyer generally pays to research the property's title.
"[A] person who has lived outside of the United States for the majority of their life but holds U.S. citizenship because they were born there." Kathleen Peddicord, Does Renouncing U.S. Citizenship Make Sense For The Average American Abroad?, Forbes, July 28, 2022 (Apple News link).
Planning that focuses on building wealth so an individual can have enough assets on which to retire. • Accumulation planning includes retirement planning and allocating assets between different classes of investments (such as bonds and stocks). Accumulation planning is performed by financial advisors, who typically invite the assistance of attorneys (to draft trusts and other estate planning instruments) and accountants (to prepare tax returns and assist with complex tax planning). See estate planning; c.f. decumulation.
action for mesne profits
See mesne profits.
action for the recovery of mesne profits
See mesne profits.
action of trespass for mesne profits
See mesne profits.
A trust in which the trustee has duties. C.f. passive trust.
activities of daily living (ADLs)
Basic personal tasks of everyday life: Bathing, dressing, toileting, transferring (walking), and continence.
When specifically bequeathed property fails because it is not owned by the testator at the time of the testator's death. The property could have been given to the beneficiary while the testator was alive, or it could have been sold, exchanged, lost, or otherwise disposed of before the testator died. • One court in New York gave this definition of ademption: The “extinction or withholding of some legacy in consequence of some act of the testator which, though not directly a revocation of the bequest, is considered in law as equivalent thereto, or indicative of an intention to revoke.” In re Dittrich, 53 Misc. 2d 782, 784, 279 N.Y.S.2d 657, 660 (Sur. Ct., Queens Co. 1967).
To end the current meeting (such as a corporate meeting or court appearance) with the intention of resuming the meeting or case at a later time.
The postponement of a court proceeding by a judge. • A judge can adjourn a case for the judge’s own reason or at the request of one of the parties to the case. The judge halts the proceeding and sets a date for the parties to return to court.
administrator cum testamento annexo (c.t.a.)
An administrator c.t.a. is appointed to act as a personal representative in a probate proceeding in any one of three circumstances: (1) The will does not name an executor. (2) The will names an executor, does not name a successor executor, and the named executor cannot qualify as the executor of the estate. (3) The will names an executor, names a successor executor, and both the named executor and the successor executor cannot qualify as the executor of the estate. • Reasons executors (or successor executors) can fail to qualify include: (1) Refusing to accept the appointment, (2) dying before or during a probate proceeding, or (3) becoming mentally incapacitated before or during the probate proceeding. • An administrator c.t.a. to whom letters have been issued is an executor (SCPA 103(20)) and a fiduciary (SCPA 103(21)). • See executor, fiduciary.
administrator de bonis non (d.b.n.)
After an administration proceeding is commenced, an administrator d.b.n. may be appointed to complete the administration of the estate if the administrator dies, resigns, becomes incapable of serving, or for any other reason is removed from office. See executor, fiduciary.
An investment strategy that attempts to reduce risk by looking for investment opportunities to capture growth when the market is rising, but getting out of investments to protect principal when the market is falling. • Advance-and-protect strategy differs from the traditional diversification approach, which rides things out in rising and falling markets. It is touted to be good for retirees. See Jacqueline Sergeant, How One Firm Shields Retirees From Market Volatility, Financial Advisor, April 1, 2022 (reporting about Piershale Financial Group, who uses the advance-and-protect strategy and just "rotated to 100% cash for the time being").
A written statement of facts made voluntarily and under oath.
Dollars on which a taxpayer was already taxed.
agency mortgage-backed securities
agency mortgage bonds
Bonds that "widely held by banks, insurers and bond funds because they are backed by the mortgage loans from government-owned lenders Fannie Mae and Freddie Mac. The bonds are far less likely to default than most debt and are easy to buy and sell quickly . . . . But agency mortgage-backed securities, like all long-term bonds, are vulnerable to rising interest rates . . . ." Matt Wirz, Anxiety Strikes $8 Trillion Mortgage-Debt Market After SVB Collapse, WSJ, March 21, 2023 (Apple News link).
Agreement Settling Account
See Receipt and Release Agreement.
In feudal times, "originally financial contributions made to the lord by the tenant to assist the lord in times of emergency. . . . Aids were abolished in 1660." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 16 (7th ed. 2020).
Property that can be transferred during life.
The transfer of property to another, such as the transfer of title to real property to another. • Alienation can be voluntary or involuntary.
Ownership of real property without a service or duty owed to a lord; land held in absolute ownership. C.f. feudal. • In New York, since July 4, 1776, "all lands held under the authority of the state, shall be and remain allodial, and not feudal." Combs v. Jackson, 2 Wend. 153 (N.Y. 1828).
American Citizens Abroad
A non-profit that focuses on issues that expats face. It advocates for the simplification of U.S. tax compliance for U.S. citizens abroad. https://www.americansabroad.org/
The beneficiary of an annuity.
A pleading that states the defendant’s position to the case.
A couple's agreement respecting their property that they make before they marry, which governs the division of their property upon their divorce.
A party who appeals and wants to reverse a lower court's decision or order. • Archaically, another word for appellant was "plaintiff in error." • C.f. appellee.
In a case that is being appealed, the prevailing party in a lower court that must now respond to an appeal, seeking to affirm the lower court's decision. • Archaically, another word for appellant was "defendant in error." • C.f. appellant.
Planning that shields assets from plaintiffs, ex-spouses, and other creditors. • See estate planning.
average liquidity coverage ratio
"[A] key measure of how much cash-like assets [a] bank has . . . ." John O'Donnell & Andres Gonzalez, Switzerland's secretive Credit Suisse rescue rocks global finance, Reuters, March 20, 2023 (Apple News link).
"[I]t is basically a high grade traditional life insurance trust . . . that gives the person setting it up . . . an extra shot at getting access to the money in the trust." Martin Shenkman, Back End Slats -- A SLAT, ILIT, DAPT, OR SPAT By Another Name?, Forbes, March 12, 2023 (Apple News link).
See 60/40 portfolio.
A unit of measure in finance that is used to describe a percentage change or rate change. One hundred basis points is equal to one percent. One basis point is equal to 0.01% (1/100th of a percent, which is 0.0001 in decimals). • Example: "The financial shock delivered by the banking ferment is tantamount to "50 basis points [that is, one half of a percentage point] of policy tightening," Joseph Brusuelas, chief economist at the consulting firm RSM, wrote Tuesday." Michael Hiltzik, Column: The Fed's anti-inflation work is almost done, with an assist from the banking crisis, Los Angeles Times, March 22, 2023 (Apple News link).
Battle of Hastings
A battle in 1066 in which William the Duke of Normandy defeated the Anglo-Saxon King, Harold II, and became King of England.
A "grizzly decline" of a widely-followed index, such as the Dow or S&P 500, of at least 20% from a recent peak. Caitlin Ostroff, The Dow Is Officially in a Bear Market. Here's What to Know., WSJ, Sept. 26, 2022 (Apple News link) ("There is nothing official about the determination. The designation is a shorthand way for Wall Street to mark when markets have taken a tumble."). C.f. bull market, correction.
A trial by a judge, as opposed to a trial by jury.
(1) A person who is entitled to some or all of an estate. (2) A person who is designated to receive a distribution under a will or trust, or the proceeds of an insurance policy or a retirement account. Beneficiaries can be primary or contingent. • "Any person entitled to any part or all of an estate." NY SCPA 103(8). • "A beneficiary is the person or entity that you legally designate to receive the benefits from your financial products." Naming a beneficiary: What you need to know, Securian Financial. • "A beneficiary is a person or entity legally designated to receive the benefits or proceeds of a trust, will, insurance policy or retirement account." Entrepreneur Staff, What Is a Beneficiary? Here's Everything to Know., Entrepreneur, Feb. 24, 2023 (Apple News link).
Billionaire Minimum Income Tax
A tax proposed by President Biden on households worth at least $100 million. It is a 20% levy on all income and unrealized appreciation on investments. See Hani Sarji, Biden Proposes Billionaire Minimum Income Tax in 2023 Budget, But It's a Gimmick, Wills, Trusts, Estates, April 12, 2022.
book value of a bond
The amount that an investor paid for a bond. C.f. market value of a bond.
borough English tenure
See burgage tenure.
boundary line agreement
A means of resolving a dispute over the boundary line between properties. This agreement avoids litigation to determine the exact boundary of properties.
Land that was previously used for industrial or commercial purposes and that may be contaminated by toxic waste. • A brownfield site is sometimes simply called a "brownfield."
In feudal times, a type of socage tenure that prevailed in some places by custom that provided that on the death of an owner, land descended to the youngest son. • Also known as "borough English tenure." C.f. gavelkind tenure, primogeniture.
An increase of a widely-followed index, such as the Dow or S&P 500, of at least 20% from a recent low. C.f. bear market, correction.
An internal corporate document that contains the rules for the corporation for such things as meetings and voting. • Bylaws of a corporation are “internal” because they are not filed with the state.
A financial contract that gives an investor the ability to buy an asset for a set price. • A call is a bet that the asset will trade higher. So, it is considered a bullish contract. • C.f. put.
callable certificate of deposit
A callable certificate of deposit is a certificate of deposit (CD) that allows the issuer (not the purchaser) to redeem the CD after a specified period of time. • The issuer is likely to redeem the certificate of deposit when interest rates decline. The purchaser's CD could end upon maturity, upon redemption by the issuer, or upon the purchaser's sale of the CD on the secondary market. Like all CDs, a callable certificate of deposit presents a significant lock-in risk to purchasers who might need the funds prior to maturity. See Hani Sarji, What Is a Callable Certificate of Deposit?, Wills, Trusts, Estates, April 2, 2022.
capital gains tax
A tax on the sale of an asset (such as a home, stocks, or cryptocurrency).
A loss from the sale of an asset for less than its purchase price.
The defendant in an ejectment action. This person may not be the actual person who physically removed the lawful possessor from the property but is named as a defendant in an ejectment action due to a legal fiction that assumes that they were the ejector. • See ejector.
If permitted by a 401(k), 403(b), governmental 457(b), SARSEP or SIMPLE IRA plan, participants who are age 50 or over at the end of the calendar year can also make catch-up elective deferral contributions beyond the basic limit on elective deferrals. See elective deferral contributions.
certificate of deposit
An account with a fixed term (e.g., six months or two years) that pays the account holder the principal plus accrued interest by the end of the term. • "CDs are similar to bonds but come with protection from the Federal Deposit Insurance Corp. for deposits amounts of $250,000 or less per account per bank." Mitchell Martin, How Bond Laddering Can Keep You From Having An SVB Portfolio, Forbes, April 8, 2023 (Apple News link).
cestui que trust
A beneficiary of a trust.
Personal property that is a physical object that is typically movable or transferable; not real property. • Thomas Blount, A Law-Dictionary and Glossary (1717) defines chattels (with citations omitted):
Chattels, or Catals, (Catalla,) comprehend all Goods moveable and immoveable, except such as are in Nature of Freehold, or Parecel of it, as may be collected out of Staundf. Chattels are either Personal or Real. Personal, may be so called in two Respects: One, because they belong immediately to the Person of a Man, as a Bow, Horse, etc. The other, for that being any Way injuriously withheld from us, we have no Means to recover them, but Personal Actions. Chattels Real, are such as either appertain not immediately to the Person, but to some other Thing, by way of Dependency, as a Box with Charters of Land, Apples upon a Tree, or a Tree it self growing on the Ground. ... [O]r such as are issuing out of some immoveable Thing to a Person, as a Lease or Rent for Term of Years.
chose in action
"Chose in Action is a Thing incorporeal, and only a Right; as an Annuity, Obligation for Debt, a Covenant, Voucher by Warranty, and generally all Causes of Suit for any Debt or Duty, Trespas for Wrong, are to be accounted Choses in Action. And it seems Chose in Action may be also called Chose in Suspence; because it has no real Existence or Being, nor can properly be said to be in our Possession." Thomas Blount, A Law-Dictionary and Glossary (1717).
An amendment to a previously executed will. • A codicil can add to, modify, or revoke parts of a will. EPTL 1-2.1. It can confirm the will in whole or in part by republication. Id. But a codicil cannot revoke the entire will. Id. A codicil must be executed with the same formalities as a will (which are set forth in EPTL 3-2.1) because the term “will” generally includes a “codicil.” EPTL 1-2.19(b).
Cousins, nieces, nephews, uncles, and aunts.
Committee for a Responsible Federal Budget
A nonpartisan, non-profit organization that educates the public and policymakers on issues with significant fiscal policy impact and advocates for fiscal responsibility. https://www.crfb.org/
"[S]uch Laws as were generally taken and holden for Law, before any Statute was made to alter the same; as, neither Tenant for Life, nor for Years, were punishable by the Common Law for doing Waste till the Statute of Clou. can. 5 was made, which gives Action of Waste against them: But Tenant by Courtesy, and Tenant in Dower, were punishable for it before the said Statute." Thomas Blount, A Law-Dictionary and Glossary (1717).
"[A] system of marital property rights derived from the Spanish law and exists in eight states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington. Under this system husband and wife are co-owners of all real and personal property acquired by either or both during the marriage other than by gift, bequest, devise or inheritance." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 309 n.1 (7th ed. 2020).
For purposes of Medicaid, the spouse who does not need long-term or nursing home care. This spouse continues to live in the community.
To change the type of obligation or payment. • Example: "When the practice of retaining hired servants developed in the fourteenth century, the services due from serjeanty tenants were, in many cases, commuted to a payment of rent, and the tenure was converted into socage." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 11 (7th ed. 2020) (emphasis added).
See concurrent ownership.
Two or more courts having the same power to hear a case.
Two or more persons owning an interest in the same property. • Generally, concurrent interests are classified as tenancy in common, joint tenancy with right of survivorship, or tenancy by the entirety. Two additional classifications of co-ownership are community property and tenancy in partnership. • See NY EPTL Article 6 Part 2 (Estates Classified As to Number of Persons), NY EPTL 6-2.1 (Estates in severalty, joint tenancy, tenancy by the entirety and in common).
Something of value, such as money.
Congressional Review Act (CRA)
Procedures that allow Congress to overturn rules issued by federal agencies. • The Congressional Review Act (CRA): Frequently Asked Questions, Congressional Research Service, Nov. 12, 2021:
The Congressional Review Act (CRA) is a tool that Congress may use to overturn rules issued by federal agencies. The CRA was included as part of the Small Business Regulatory Enforcement Fairness Act (SBREFA), which was signed into law on March 29, 1996. The CRA requires agencies to report on their rulemaking activities to Congress and provides Congress with a special set of procedures under which to consider legislation to overturn those rules.
Under the CRA, before a rule can take effect, an agency must submit a report to each house of Congress and the comptroller general containing a copy of the rule; a concise general statement describing the rule, including whether it is a major rule; and the proposed effective date of the rule. After receiving the report, Members of Congress have specified time periods during which they must submit and act on a joint resolution of disapproval to take advantage of the CRA’s special “fast track” procedures. If both houses pass the resolution, it is sent to the President for signature or veto. If the President were to veto the resolution, Congress could vote to override the veto.
If a joint resolution of disapproval is submitted within the CRA-specified deadline, passed by Congress, and signed by the President, the CRA states that the disapproved rule “shall not take effect (or continue).” The rule would be deemed not to have had any effect at any time, and even provisions that had become effective would be retroactively negated.
Furthermore, if a joint resolution of disapproval is enacted, the CRA provides that a rule may not be issued in “substantially the same form” as the disapproved rule unless it is specifically authorized by a subsequent law. The CRA does not define what would constitute a rule that is “substantially the same” as a nullified rule. Additionally, the statute prohibits judicial review of any “determination, finding, action, or omission under” the CRA.
Since its enactment, the CRA has been used to overturn a total of 20 rules: 1 in the 107 th Congress (2001-2002), 16 in the 115 th Congress (2017-2018), and 3 in the 117 th Congress (2021-2022).
In January 2022, House Republicans passed a measure (H.J.Res.7) ending the coronavirus national emergency under the Congressional Review Act (in a 229-197 vote), then the Senate passed the measure in April 2022 (in a 68-23 vote), and then President Biden signed the resolution, instead of vetoing it. Azi Paybarah, Biden signs resolution ending coronavirus national emergency, Washington Post, April 10, 2023 (Apple News link) (stating, "Despite Biden telling Congress in January that he would end the health emergency in May, House Republicans passed the measure ending the national emergency under the Congressional Review Act, which allows Congress to overturn rules by federal agencies via a simple majority vote."); Ali Zastav, Phil Mattingly & Manu Raju, Senate votes to end Covid-19 emergency, 3 years after initial declaration, CNN, March 29, 2023 (stating, "The measure was able to succeed in the Senate by a simple majority through the Congressional Review Act, which allows a vote to repeal regulations from the executive branch without breaking a filibuster at a 60-vote threshold that is required for most legislation in the chamber.)".
contingent convertible bond (CoCo)
Bonds that "are mainly issued by European and Asian banks, but bought by investors all over the world. Cocos help banks deal with heavy losses because in times of stress they convert to equity or are written down. They become risky in sudden and unexpected ways." Paul J. Davies, Investors Diving Into Risky Bank Bonds, WSJ, Dec. 26, 2017 (Apple News link). • See Matt Wirz & Caitlin McCabe, Credit Suisse Bond-Wipeout Threatens $250 Billion Market, WSJ, March 20, 2023 (Apple News link) ("Deal would write down more than $17 billion of the bank's riskiest bonds. . . . The complete write-off by Credit Suisse, one of the largest issuers in the AT1 market, will likely hurt investor appetite for the bonds . . . Ultimately, AT1 bonds will become more expensive for banks to issue, reducing their ability to make new loans . . . .").
The amount an employer and employees (including self-employed individuals) pay into a retirement plan.
convenience of employer rule
An exception to the general rule that an employee pays taxes in the jurisdiction in which the employee physically performs services. Under the "convenience of employer rule," if an employee works from home through the employer's necessity, then the employee will be taxed in the employee's home location; but if the employee works from home for the employee's own convenience, then the employee's wages for those workdays are classified as if the employee was working from the employer's physical office. See N.Y. Dept. of Tax. & Finance TSB-M-06(5)I. • The "convenience of the employer rule" can cause an employee to be taxed in the state where an employer's physical office is located even though the employee is a non-resident of the taxing state and does not physically work in that state.
A decline of a widely-followed index, such as the Dow or S&P 500, of at least 10% from a recent low. C.f. bear market, bull market.
Corrects a prior deed in a chain of title, such as a name that is misspelled.
cost of living
"Cost of living is a measure of how expensive it is to live in a particular place at a particular time based on how much things like rent, gas, and food cost." Jeremy Salvucci, What Is Cost of Living? Definition, Examples & Importance, TheStreet, June 13, 2022 (Apple News link).
A tribunal presided over by a judge.
In feudal England, a lord's manorial court for free tenants. C.f. Court Customary.
In feudal England, a lord's manorial court for villein tenants. C.f. Court Baron.
covenant of seisin
Edward T. Reilly, The Covenant of Seisin, St. John's Law Review, Vol. 10, Dec. 1935:
[A]mong many things, the usual warranty deed embraces an undertaking on the part of the grantor that he is seised as owner, at the time of the grant, of the land which the deed purports to convey. This assurance to the purchaser that the covenantor is possessed of the very estate in quantity and quality which his conveyance intends to transfer is called the "covenant of or for seisin."
The covenant need be couched in no particular terms; it need merely be but a stipulation or declaration that the grantor is seised of an estate of the quantum which he undertakes to convey. The New York short form of deed, culled mainly from the fuller language of former deeds, simply words this covenant for title as follows: "That the party of the first part is seised of said premises in fee simple * * *." . . .
covenant for seisin
See covenant of seisin.
CPLR § 408
In New York, "[d]iscovery in special proceedings is not as broad as in other civil proceedings. CPLR 408 governs discovery in special proceedings and requires leave of court for any disclosure with certain exceptions . . . ." Matter of K.Z. v. P.M., 29 Misc. 3d 572, 2010 NY Slip Op 20335 (Family Court Orange Co. 2010). • Failing to obtain leave of court for disclosure can be used to challenge a discovery subpoena in special proceedings (such as landlord and tenant summary proceedings). Example: "In reply to Respondent Soto's opposition that Petitioner did not satisfy the elements necessary for leave to obtain discovery pursuant to CPLR §408, Petitioner's counsel affirms, inter alia, that the subpoena is a trial subpoena, not a discovery subpoena." Harbor Tech LLC v. Correa, 73 Misc.3s 1211(A), 2021 N.Y.Slip Op. 50995(U) (Kings Co. Civil Court Oct. 14, 2020, Stoller, J.).
(1) For trusts, see settlor.
(2) NY EPTL 1-2.2 defines a creator as "a person who makes a disposition of property."
The risk that a borrower will default on a loan.
Switzerland's second-largest bank by assets; based in Zurich. • Caitlin McCabe & Josh Mitchell, Why Is Credit Suisse in Trouble? The Banking Turmoil Explained, WSJ, March 16, 2023 (Apple News link):
Zurich-based Credit Suisse [pronounced Credit Swees] traces its history back to 1856, when it was founded to finance the expansion of Swiss railroads. Today, it stands as Switzerland’s second-largest bank by assets, trailing UBS Group.
The bank’s main business is managing money and creating investment products for wealthy clients around the world. . . .
"[Paul Singer] says crypto is 'completely lacking in any value. It is not a substitute for gold, but it has taken away some of the demand side for gold.' He adds: 'There are thousands of cryptocurrencies. That's why they're worth zero. Anybody can make one. All they are is nothing with a marketing pitch--literally nothing.'" James Freeman, Paul Singer, the Man Who Saw the Economic Crisis Coming, WSJ, April 7, 2023 (Apple NEws link) ("He warned about subprime mortgages before 2008, Dodd-Frank in 2010, and inflation in 2020. After Silicon Valley Bank, what does he think is next?)". C.f. gold.
A bond's alphanumeric identifier. • You can search using the CUSIP number on Trace, the Financial Industry Regulatory Agency's price-reporting system.
In feudal times, a direct tax levied throughout England.
See decentralized apps.
Existing in fact; having effect even though not legally recognized. C.f. de jure.
Existing according to law. C.f. de facto.
The proceeds of a life insurance policy that are paid out tax-free to designated beneficiaries (or to the policy owner's estate).
death-put redemption clause in a certificate of deposit
A feature in a certificate of deposit that allows a decedent's estate to redeem the CD at face value in the event the holder of the CD dies before the CD's maturity date. • See Hani Sarji, What is a Death-Put Feature of a Certificate of Deposit?, Wills, Trusts, Estates, April 3, 2022.
(1) A term that applies either to an estate tax or an inheritance tax. • This use of the term is politically neutral.
(2) The pejorative label for the "estate tax" given by its opponents.
When statutory requirements are met, a way for a trustee to modify an otherwise irrevocable trust by transferring assets to a new trust. See NY EPTL 10-6.6.
An individual who has died.
Software that allows users to access decentralized finance platforms. • Decentralized apps are popularly called "dapps."
Paul Vigna, DeFi Is Helping to Fuel the Crypto Market Boom -- and Its Recent Volatility, WSJ, June 3, 2021 (Apple News link):
Short for decentralized finance, DeFi is an umbrella term for financial services offered on public blockchains. Like traditional banks, DeFi applications allow users to borrow, lend, earn interest, and trade assets and derivatives, among other things. The collection of services is often used by people seeking to borrow against their crypto holdings to place even larger bets.
There are two key differences from mainstream banks: All services are for digital currencies instead of government-issued ones such as the dollar and the euro, and there is no intermediary or centralized system through which transactions are processed.
. . .
DeFi is still an immature and highly risky market. In some cases, those running the apps are anonymous, making it harder for users to determine which platforms are reliable. The services aren't regulated or insured, so if a platform fails there is no recourse.
Another risk is security. . . .
The phase in life when someone retires and must live off of their retirement savings without running out of money. • See Stephen Chen, Why Retirement Decumulation Is The New Accumulation, Forbes, Sept. 30, 2019 ("It’s much more complex than the accumulation of assets.").
A document that conveys title to real property.
defective grantor trust
See intentionally defective grantor trust.
defendant in error
Part of a manor either kept by a lord in his own hands or farmed for his own profit.
In medieval England, after the Norman conquest, the principle that except for the king, every person holds land under some lord. • See tenure.
designated Roth contribution
A type of employee retirement contribution where a portion of an employee’s salary is withheld after-tax and transferred into an employer-sponsored retirement plan — 401(k), 403(b), or governmental 457(b) plans. • Unlike pre-tax elective contributions, designated Roth contributions are currently includible in gross income but tax-free when distributed. If a plan permits designated Roth contributions, it must also offer pre-tax elective deferral contributions. • C.f. elective deferral contribution.
The right to transfer property at death by a will.
Traditionally, the transfer of any property at death by a written document called a "will." Today, the term is limited to transfers of real property by will. • NY SCPA § 103(12) defines the word devise when used as a noun as "a transfer of real property by will," and it defines devise when used as a verb (i.e., "to devise") as "to transfer real property by will."
A person who receives real property under a will. • See NY SCPA § 103(13).
To reject a gift or a share in or payment of an estate. • New York uses the term "renunciation" instead of disclaimer. • A disclaimer is neither an assignment nor a release. In a disclaimer, the donee refuses something. In an assignment or release, the donee accepts something before transferring it.
discretionary power of appointment
A power of appointment that permits the donee to exercise or not exercise it. NY EPTL 10-3.4(c).
NY EPTL 1-2.4 defines a disposition as "a transfer of property by a person during his lifetime or by will. Under this definition, property received from an intestate decedent is not received through a disposition because it is received neither through a lifetime transfer nor by will. Also, a court held that a surviving spouse's withdrawal from a bank account that was owned jointly with the decedent spouse is not an abatement of estate assets because it is not a disposition -- the transfer was made by the surviving spouse, not the decedent. Mason v Mason, 657 N.Y.S.2d 214 (App. Div. 3d Dep't 1997).
A survey of England that William the Conqueror ordered in 1086. It is England's earliest surviving public record. • "One explanation for the name of the book is that the records were deemed by the populace to be as conclusive as the day of judgment." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 31 n.13 (7th ed. 2020). • "The primary purpose of the survey was fiscal in nature. William desired precise, up-to-date information as to contributions made by each estate to the Danegeld, a direct tax levied throughout the country. Additionally, he sought an accurate and complete picture of the redistribution of English lands that had taken place in the 20 years since the Norman invasion." Id. at 6. • You can search the Domesday Book at https://www.nationalarchives.gov.uk/domesday/
(1) Respecting powers of appointment: "the person who creates or reserves a power." EPTL 10-2.2(a).
(2) Respecting trusts: See settlor.
"[T]he art of expressing in a will the known desires of the testator." Jule E. Stocker, Jonathan J. Rikoon, Pamela R. Champine, & Janine Racanelli, Practising Law Institute: Stocker and Rikoon on Drawing Wills and Trusts (2011) (explaining, "We occasionally use less current terms for their nuances: 'draftsmanship' connotes more art than 'drafting' even though it includes a reference to the time when all drafters were draftsmen.").
durable power of attorney
A power of attorney that remains in effect even when the principal becomes incapacitated.
"[A]ny building or structure or portion thereof which is occupied in whole or in part as the home, residence or sleeping place of one or more human beings." NY MDL § 4(4)). • See multiple dwelling.
A trust that remains in place for multiple generations.
Someone who dispossesses another.
elective deferral contribution
A type of employee retirement contribution where a portion of an employee’s salary is withheld pre-tax and transferred into an employer-sponsored retirement plan — 401(k), 403(b), or SIMPLE IRA plans. • The employee contribution is generally a percentage of the employee’s compensation, but some plans permit the employee to contribute a specific dollar amount each pay period. • Also called “salary reduction contribution.” C.f. designated Roth contribution.
eligible designated beneficiary
For years after 2020, with respect to inherited IRA accounts and retirement plans, a spouse or minor child of the deceased account holder, disabled or chronically ill individual, or an individual who is more than 10 years younger than the IRA owner or plan participant. An eligible designated beneficiary can take distributions over the longer of their own life expectancy and the employee's remaining life expectancy, or follow the 10-year rule (if the account owner died before that owner's required beginning date). Retirement Topics - Beneficiary, irs.gov.
Savings that someone uses only when certain events occur. • "For an emergency fund, experts suggest saving at least three to six months' worth of living expenses. This includes essentials such as housing, utilities, food, health care and transportation. For example, if your average monthly expenses are $3,000, you'd want to save at least $9,000 to $18,000." Kelly Ernst, How much money should I put in a high-yield savings account?, CBS News, March 16, 2023 (Apple News link).
In feudal times, to give land. • Responding to the 1166 questionnaire by Henry II asking about the number of knights enfeoffed on the tenant's land and the number required by his service, the return of the Archbishop of York wrote, "[O]ur predecessors enfeoffed more knights than they owed to the king, and they did this, not for the necessities of the royal service, but because they wished to provide for their relatives and servants.” Douglas and Greenaway, 2 English Historical Documents 907 (Oxford Univ.Press, 1953), quoted in Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 5 n.9 (7th ed. 2020) (affiliate link).
equity risk premium
"[E]ssentially the premium return that investing in stocks should provide versus a risk-free rate like the yield on U.S. Treasuries." Nicholas Jasinski, Saving the Banks Isn't Quantitative Easing, Barron's, March 20, 2023 (Apple News link).
The consequence of someone dying without an estate plan and without an heir: The decedent's estate goes to the government. • In medieval times, the decedent's estate would escheat to the overlord. Today, it escheats to the state where the property is located. • See Estate of Clark, 271 A.D. 691, 696, 68 N.Y.S.2d 487 (App. Div. 4th Dep't 1947) ("[T]itle vests in the State at once, upon the death of a decedent, intestate and without heirs or distributees.").
ESG is an acronym that stands for "environmental, social, and corporate governance." • See Tamara Keith, Biden has vetoed his first bill. Here's how that compares to other presidents, NPR, March 20, 2023 (Apple News link) ("the veto blocks a measure that was aimed at reversing a Biden administration rule for pension managers. The rule allows them to make investment decisions taking into consideration environmental, social and corporate governance (ESG) factors.").
(1) All of the assets that someone owns. • An "estate" can have a different scope depending on the context, including probate estate, non-probate estate, gross estate for purposes of the federal estate tax. • NY EPTL 1-2.6(b) codifies this meaning of "estate": "The aggregate of property which a person owns."
(2) The interest a person has in property. • EPTL 1-2.6(a) codifies another meaning for "estate": "The interest which a person has in property."
(3) The estate of a decedent. • EPTL 11-1.1(a) ("Fiduciaries' powers") defines the term "estate" for purposes of EPTL 11-1.1 to mean "the estate of a decedent," "unless the context or subject matter otherwise requires."
Planning for the accumulation, preservation, protection, decumulation, and transmission of wealth. • Estate planning is an umbrella term that encompasses different types of planning, including planning for incapacity, retirement, charitable gifting, paying for long-term care, the transmission of wealth in a family during life and upon death, and tax minimization. Estate planning is distinguishable from estate administration, a process which effectuates the plan. • A good estate plan must anticipate its successful administration. A comprehensive estate plan looks at "wealth" broadly to include not only an individual's assets, but also values. • Estate planning professionals include financial advisors, accountants, lawyers, and fiduciaries. • "Reframe your thoughts about estate planning. It is not only morbid thoughts of dying. Estate planning should be as much planning for life: retirement, illness, disability, young kids, college, etc. . . . Estate planning means retirement, insurance, and other planning." Martin Shenkman, New Year's Estate Planning Resolutions, Forbes, Dec. 28, 2022 (Apple News link).
An estate tax is imposed on the estate of a decedent for the privilege of transferring property at death. • The IRS defines the estate tax as "a tax on your right to transfer property at your death." C.f. inheritance tax.
Someone (an individual or corporation) named by a testator in a last will and testament to carry out the testator's directions. • Someone who manages a decedent's testamentary estate by probating the decedent's will, marshaling the decedent's assets, notifying creditors and persons interested in the estate's assets, paying outstanding debts, and distributing the decedent's remaining assets according to the terms of the will. • NY SCPA 103(20) defines "executor" as "[a]ny person to whom letters testamentary have been issued." • Powers of Sale in an Executor in Pennsylvania: "An executor is the person, or, in modern times, frequently a corporation, named to carry out the directions of a man's last will and testament. A testament relates solely to personal property, and a will to real estate, and the latter operates as a devise of the legal title and needs no executor. The office of an executor, therefore, pertains properly to the administration of the personal estate, and the executor has no authority over the real estate, except under a special provision to that effect contained in the will, or by virtue of an Act of Assembly." • See fiduciary.
fair market value
"[T]he price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts." Reg. § 20.2031-1(b).
FDIC-insured sweep program
"FDIC-insured sweep programs are offered by brokerage firms. These programs 'sweep' client cash into FDIC-insured bank accounts. In some cases, clients’ deposits are fanned out across multiple banks to provide higher levels of FDIC protection. Like bank accounts, yield can vary across programs, with some programs offering highly competitive yields." Adam Grealish, Five Places to Put Cash Rather Than in the Bank, Kiplinger, May 1, 2023 (Apple News link).
In feudalism, a vassal's sworn loyalty and allegiance to a lord. • Fealty was an incident of tenure.
See volatility index.
In feudal times, land granted in return for military service. Also called a "fief."
The social structure of medieval Europe. It was pyramidal with the king at the top and peasants who tilled the soil at the bottom; everyone in between was both a lord over someone and a tenant under someone. The basis of rights and duties was typically status, not contract.
(1) New York EPTL 1-2.7 defines a fiduciary as "[a] person who meets the description, in this part, of a 'personal representative' or who is designated by the creator or by the court to act as an assignee for the benefit of creditors, or a committee, conservator, curator, custodian, guardian, trustee or donee of a power during minority." • NY EPTL 1-2.13 defines a personal representative as "a person who has received letters to administer the estate of a decedent. The term does not include an assignee for the benefit of creditors, or a committee, conservator, curator, custodian, guardian, trustee or donee of a power during minority."
(2) New York SCPA 103(21) defines a fiduciary as any of the following: (1) An administrator[*], (2) administrator c.t.a.[*], (3) administrator d.b.n.[*], (4) ancillary administrator[*], (5) ancillary administrator c.t.a.[*], (6) ancillary executor[*], (7) ancillary guardian[*], (8) executor[*], (9) guardian[*], (10) preliminary executor[*], (11) temporary administrator[*], (12) testamentary trustee [*], (13) the donee of a power during minority, (14) a voluntary administrator, (15) a public administrator acting as administrator, (16) a public administrator[*], (17) a county treasurer[*], and (18) a lifetime trustee. In this list, "[*]" signals two things: (1) NY SCPA 103(21) requires letters to be issued to that person before they are considered a "fiduciary." (2) That person is also an "executor" under NY SCPA 103(20), which defines "executor" as "[a]ny person to whom letters testamentary have been issued."
(3) Section (a) of NY EPTL 11-1.1 ("Fiduciaries' powers") defines the term "fiduciary" for the purposes of the section to mean, "administrators, executors, administrators d.b.n., administrators c.t.a.d.b.n., administrators c.t.a., ancillary executors, ancillary administrators c.t.a and trustees of express trusts, including a corporate as a well as a natural person acting as fiduciary, and a successor or substitute fiduciary, whether designated in a trust instrument of otherwise."
(4) Section 3 of NY SCPA 1306 ("Powers") deems a voluntary administration a fiduciary, but with limited powers:
For the purposes of this article, a voluntary administrator shall be deemed to be a fiduciary of the estate until another fiduciary is appointed, and except as herein provided, the voluntary administrator shall have the rights, powers and duties with respect to personal property of an administrator duly appointed for the estate. The voluntary shall have no power to enforce a claim for the wrongful death of or a claim for personal injury to the decedent.
Upon the appointment and qualification of another fiduciary of the estate, the powers of the voluntary administrator shall cease.
Writ of execution directing a marshal or sheriff to seize and sell a debtor's property to satisfy a money judgment. • For example, Sands v. Codwise, 5 Johns. 536 (NY Court for Correction of Errors 1808), states (emphasis added), "When he stopped payment . . . judgment was entered up against him . . . . A fieri facias was soon after issued on the said judgment, which was levied on the household furniture, and other personal property of Comfort Sands, and on his dwelling-house in Pine Street, and another dwelling-house in Cedar Street. In November, 1798, the sheriff sold the personal property taken on the execution, at public auction, to the appellant . . . ."
Last; not necessarily free from error. • "There is no doubt that if there were a super-Supreme Court, a substantial proportion of our reversals of state courts would also be reversed. We are not ﬁnal because we are infallible, but we are infallible only because we are ﬁnal." Brown v. Allen, 344 U.S. 443, 540 (1953) (Jackson, J., concurring).
A tax that imposes the same tax rate on all taxpayers, regardless of whether the taxpayers are lower-income or higher-income. C.f. progressive tax, regressive tax.
four unities test
For a joint tenancy, as described by Blackstone: "the unity of interest, the unity of title, the unity of time and the unity of possession; or in other words, joint tenants have one and the same interest, accruing by one and the same conveyance, commencing at one and the same time, and held by one and the same possession." 2 Bl.Comm. 180, qtd in Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 290 (7th ed. 2020) (explaining, "The requirement of unity of possession does not mean actual possession. There may be a joint tenancy in a future interest, such as a remainder. A unity of right to possession is sufficient.").
In feudalism, a tenure that arose from a gift of lands to a church or religious official (not a lay person), in return for religious (not secular) services, such as saying prayers. •"Frankalmoin" means "free alms."
In feudalism, tenure where the services were definite and certain and were worthy of a free man; the services were not dependent on the lord as to amount or quantity. • Free tenure had four main divisions: (1) Tenure by knight service, (2) serjeanty, (3) frankalmoin, and (4) free and common socage. • Free tenants were protected by the king's courts (not just the lord's court) and had the benefit of real actions. • C.f. unfree tenure.
In feudal times, a man who was free and might hold land but who owed some services to his lord. C.f. slave.
An estate in land to which the holder is or may be entitled to possession in the future. C.f. present interest. See reversion.
In feudal times, a tenure that prevailed in the county of Kent and had special rules, including that on the death of an owner, land descended to all of his sons equally. C.f. burgage tenure, primogeniture.
A pointed and total denial of everything in a complaint or a paragraph of a complaint. • Example of a general denial in an answer: "Defendant denies all the allegations of the complaint." • In New York, it is "[i]mproper for [a] lawyer to interpose general denial knowing that his client has no valid defense." Opinion #469 - 6/7/77 (64-77), New York State Bar Association.
general power of appointment
The power to vest a trust's principal in oneself.
Generally, a transfer that skips the estate tax for a generation.
generation-skipping transfer tax (GSTT)
A tax on wealth transfers that skip one or more generations. • The GSTT was originally enacted in 1976. But in the Tax Reform Act of 1986, the Reagan administration repealed the 1976 version, and enacted a new version, effective October 23, 1986.
An activity that earns income through a digital platform (an app or website), including driving a car for booked rides or deliveries; renting out property or part of it; running errands or completing tasks; selling goods online, renting equipment; providing creative or professional services; and providing temporary, on-demand, or freelance work. See Manage Taxes for Your Gig Work, irs.gov; The Gig Issue, Millie, Fall 2022 (Apple News link).
According to Paul Singer: "'. . . it is the only 'real' money and has occupied that status for literally thousands of years.'" James Freeman, Paul Singer, the Man Who Saw the Economic Crisis Coming, WSJ, April 7, 2023 (Apple NEws link). C.f. cryptocurrency.
Rules, laws, or procedures that groups or entities adopt to provide a structure for communication, decision-making, accountability, and conflict resolution.
In feudal times, a type of serjeanty tenure held directly of the king and requiring an honorary ceremonial service. • "[W]ardship was incident to grand serjeanty, but not to petit serjeanty . . . ." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 31 n.24 (7th ed. 2020).
(1) For trusts, see settlor.
(2) For deeds, the person conveying title.
A trust in which the grantor of the trust is treated as the "owner" of all or part of the trust for income tax purposes, and all taxes are passed through to the grantor as if the trust did not exist. C.f. non-grantor trust.
The total amount of money an employee earns before any payroll deductions are subtracted. C.f. net pay.
guardian by nature
"At the common law, where there was no guardian in socage, the father was guardian by nature to his heir apparent, until he arrived to the age of 21; this guardianship gave a control of the person only, and not of the estate, real or personal, of the infant. . . . A guardian by nature has no control over the real or personal estate of his infant children." Combs v. Jackson, 2 Wend. 153 (N.Y. 1828).
In a deed, a clause that describes the estate granted. It starts with the words, "to have and to hold." • For example, a habendum clause for a fee simple title states, "to have and to hold the premises herein granted unto the party of the second part, the heirs or successors and assigns of the party of the second part forever."
health care proxy
A legal document that gives someone (known as the health care agent) the legal authority to make medical decisions on the principal's behalf after a severe injury or illness.
A person who may inherit under the default intestacy statutes in the absence of an estate plan. • Heirs are determined when someone dies. See the definitions of "laughing" heir, collateral heirs, escheat, lineal ancestors, and lineal descendants.
A will that is handwritten. See, e.g., North Dakota Supreme Court: Holographic Will Not Valid When Material Portions Not Proven To Be In Decedent’s Handwriting, Probate Stars, Jan. 11, 2022.
In medieval times, a ceremony in which a vassal knelt before a lord, acknowledged himself to be his lord's man, and swore allegiance to the lord. Frequently, the lord made a grant of land to the vassal or gave the vassal an annuity. • Homage was an incident to tenure by knight service, but it became obsolete when knight service changed from actual military service to a monetary obligation. See fealty, feudalism.
In medieval times, a larger baronial estate of a lord, which was comprised of numerous smaller estates that were held by different people. • "As many as 80 English estates, situated in different regions, were combined to compose a single lord’s honour. In the course of the Norman settlement, several thousand smaller estates were compressed into fewer than 200 major honours. The lords of these honours were the men who, with William, established the new English state." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 2 (7th ed. 2020) (affiliate link). • See Norman Conquest.
Having one's body turned into soil after death. • In 2019, Washington was the first state to legalize human composting. Other states that allow it are California, Colorado, Oregon, New York, and Vermont. See James FitzGerald, New York approves composting of human bodies, BBC News (Apple News link).
A self-settled domestic asset protection trust where the grantor is not one of the initial beneficiaries, but the trust has someone acting in a non-fiduciary capacity who is given a limited right to add new beneficiaries--one of which is the trust's settlor. See DAPT, self-settled trust.
"I love you" will
A last will and testament in which the testator bequeaths to the surviving spouse everything that the testator owns and can pass by probate. • An "I love you" will might be simple, but it has downsides. See Hani Sarji, "I Love You" Will Might Not Show Love to Surviving Spouse, Wills, Trusts, Estates, Feb. 12, 2022.
ICE U.S. Dollar Index
Launched in 1985, this index "measures the currency [i.e., the dollar] against a basket of its biggest trading partners . . . ." Chelsey Dulaney, Megumi Fujikawa & Rebecca Feng, Dollar's Rise Spells Trouble for Global Economies, WSJ, Sept. 18, 2022 (Apple News link).
Illinois Senior Citizens Real Estate Tax Deferral Program
What is the Senior Citizens Real Estate Tax Deferral Program?, Illinois Revenue:
The Senior Citizens Real Estate Tax Deferral Program provides tax relief for qualified senior citizens by allowing them to defer all or part of their property tax and special assessment payments on their principal residence. The deferral is similar to a loan against the property's fair market value. Deferred amounts are borrowed from the state, who then pays the tax bill to the County Collector's Office. Interest on the amount paid by the State accumulates and a lien is placed on the property for all deferred tax payments and interest. (320 ILCS 30/1 et. seq.).
An acronym for irrevocable life insurance trust.
incidents of tenure
In feudal times, implied rights granted to a lord and implied obligations imposed on a tenant that were additional to the particular services required of a tenant to the lord. These rights arose from the feudal relationship, not from any express agreement by the tenant. • See tenure.
income-driven repayment (IRD) plan
A plan that allows student-borrowers to repay their student loans as a percentage of income, instead of a standard monthly payment that is based on the amount borrowed and the interest rate.
Prices rise; the value of money decreases.
"[T]he rate of change in prices." James Broughel, Why Raising Taxes Is A Misguided Approach To Inflation Control, Forbes, March 24, 2023 (Apple News link).
informal settlement of an estate
See non-judicial settlement of an estate.
Property that passes at death under intestacy statutes to the owner's heirs absent a will.
An inheritance tax is imposed on each beneficiary of an estate for the privilege of receiving property from the dead. C.f. estate tax.
Title that an insurance company will be willing to ensure, even though there might be a defect (such as an ancient mortgage). C.f. marketable title.
intentionally defective grantor trust (IDGT)
A trust that is treated as owned by its creator for income-tax purposes and by the beneficiaries for wealth-transfer tax purposes. See grantor trust, [non-grantor trust](#non-grantor trust).
Among other things.
Internal Revenue Code (IRC)
The federal tax statutes in the United States. • "Tax statutes had different iterations before they were officially codified in 1874. The tax code was formally titled the Internal Revenue Code in 1939, and Congress made revisions in 1954 and 1986." TheStreet Staff, What Is the Internal Revenue Code? Definition & History, TheStreet, Jan. 31, 2023 (Apple News link).
Internet Tax Freedom Act (ITFA)
Christine Kim, Weekly SSRN Article Review And Roundup: Kim Reviews The Internet Tax Freedom Act At 25 By Hellerstein & Appleby, TaxProf Blog, April 28, 2023:
The ITFA was enacted in 1998 to temporarily suspend the enactment of new state and local taxes on Internet access in order to encourage electronic commerce. Congress also created a committee to study the issues raised by such taxes, and to give legislative recommendations. After failing to adopt federal legislation and extending the ITFA four times, Congress finally made the act permanent in 2016.
The ITFA prohibits three types of taxes: (1) taxes on internet access; (2) discriminatory taxes on electronic commerce; and (3) multiple taxes on electronic commerce. . . . [T]he technology, business models, and charges associated with access to and use of the internet have evolved dramatically since the ITFA’s original enactment.
. . .
[T]he best solution would be for Congress to repeal or amend the ITFA to tackle the current digital economy. Otherwise, . . . ITFA could continue to lead to distortion and litigation over states' reasonable ability to tax the digital economy . . . . [T]he underlying rule the ITFA imposes is not "fit for service" and so all litigating about it is a waste of time and resources no matter the result.
The law that applies when someone dies without a will, with a will that is successfully challenged, or with a will that does not dispose of all of the decedent's probate estate.
Someone who dies without a will. C.f. testate.
inverted yield curve
"[Y]ields are higher on short term debt than long-term bonds . . . ." James Freeman, Paul Singer, the Man Who Saw the Economic Crisis Coming, WSJ, April 7, 2023 (Apple News link). • "An unusual situation in the bond market right now is that interest rates are higher for short-term debt than they are for long term debt. For Treasurys, that means that bills due in six months yield 4.9%, with the return declining to 3.3% in 10 years before edging bak up to 3.66% in 20 years. this is called an inverted yield curve, and it predicts interest rates will decline, possibly along with economic growth, in coming years. The curve for corporates is less sharply inverted . . . ." Mitchell Martin, How Bond Laddering Can Keep You From Having An SVB Portfolio, Forbes, April 8, 2023 (Apple News link).
Involuntary alienation occurs when a person gives up title to property against their will. • Involuntary alienation can happen because of adverse possession, bankruptcy, condemnation under eminent domain, or foreclosure.
joint tenancy with right of survivorship
A type of concurrent ownership that carries the right of survivorship, which means the property automatically goes to the surviving owner by operation of law, rather than descending to the decedent-owners' heirs or being transferred by the decedent-owner's will. • The interests in a joint tenancy must vest at the same time, title must be acquired through the same instrument (deed), the interests must be equal, and each tenant must have the right to possess the entire property subject to the rights of the co-tenant.
"[H]igh-yield debt with doubled-digit changes of impairment." Mitchell Martin, How Bond Laddering Can Keep You From Having An SVB Portfolio, Forbes, April 8, 2023 (Apple News link).
"Employers' propensity to hold on to workers even as the economy slows . . . ." Abha Bhattarai & Lauren Kaori Gurley, Labor market adds 236,000 jobs in March, powering economy on, Washington Post, April 7, 2023 (Apple News link).
laddered bond portfolio
"[A] portfolio of bonds that mature at regular periods over a period of, say, one to 10 years and provide a defined income stream over that period of time. As each bond matures, the returned principal can be reinvested for the future, avoiding market losses and smoothing the effects of interest-rate changes." Mitchell Martin, How Bond Laddering Can Keep You From Having An SVB Portfolio Nightmare, Forbes, April 8, 2023 (Apple News link). • "'Laddered portfolios hold short, medium, and longer bonds,' says Holmes Osborne of Osborne Global Investors in Odessa, Missouri. 'Since interest rates are difficult to predict, a laddered portfolio can cover investors in multiple scenarios.' . . . 'A laddered bond portfolio is one in which you invest in an assortment of bonds with staggered maturities,' says Robert R. Johnson, Professor at the Heider College of Business at Creighton University in Charlottesville, Virginia. 'For example, you can structure a bond portfolio where 10 percent of all the bonds mature each year. The bonds would not all mature in the same interest rate environment. If rates rise, the value of the portfolio may fall, but you do not need to sell the bonds that haven’t matured. If you need the cash, the maturing bonds offer a ready source. If you do not need the cash, you can reinvest the proceeds of the maturing bonds at the new (higher) interest rates.'" Chris Carosa, How A Laddered Bond Portfolio Can Mitigate Reinvestment Risk, Forbes, Dec. 13, 2022 (Apple News link).
A distant relative of a decedent (such as a distant cousin in a foreign country), who is said to be "laughing" because the relative rejoices at receiving an inheritance, instead of feeling remorse at the loss of the decedent.
legal obligations of an estate
An estate's debts, taxes, charges, and claims.
SCPA 103(24) defines "letters" as a category that includes (1) letters of administration, (2) letters of administration c.t.a., (3) letters of administration d.b.n., (4) limited letters of administration, (5) ancillary letters of administration, (6) ancillary letters of guardianship, (7) ancillary letters testamentary, letters of guardianship, (8) letters of temporary administration, (9) letters testamentary, (10) preliminary letters testamentary, and (11) letters of trusteeship." It further states, "A testamentary trustee who has qualified without the issuance of letters shall be deemed for the purposes of this act to have received letters of trusteeship." • SCPA 103(20) (defining an executor) and SCPA 103(2) (defining a fiduciary) mention "letters." • See executor, fiduciary.
life estate pur autre vie
A life estate for the life of another.
A trust created while the settlor is alive. C.f. testamentary trust.
Parents, grandparents, and great-grandparents.
Sons, daughters, grandchildren, great-grandchildren, etc.
A way of avoiding a tax that is intentionally provided by Congress or discovered by creative lawyers.
In feudal England, the owner of a manor. • "Not only did the lord supervise the agricultural economy of the manor, but he also, through the manorial courts over which he presided in person or through his bailiff, adjudicated controversies among his tenants and regulated much of their daily lives." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 13 (7th ed. 2020). • The lord had free tenants who held land in socage or by knight service. The lord retained the remaining lands (demesne lands), which the villeins worked. • A lord presided over two courts: the Court Baron (for free tenants) and the Court Customary (for villein tenants).
In feudal times: An estate or unit of lordship, varying in size. • "The manor was an agricultural, governmental, and fiscal unit, usually co-extensive in territory with the ancient village, composed of lands held by the lord and by tenants of different classes. " Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 13 (7th ed. 2020). • See lord.
In feudal times, a court presided over by a lord (or the lord's bailiff) that adjudicated disputes among tenants. • The lord presided over two manorial courts: The Court Baron for free tenants, and the Court Customary for villein tenants. • Villein tenants had recourse only in the manorial courts, not the royal courts.
marginal tax rate
"A marginal tax rate is a tax rate based on the last dollar of taxable income. . . . The U.S. and many countries use such a tax bracket system in which a different tax rate is applied to different levels of taxable income. As a person’s income increases, so does the marginal tax rate. . . . Marginal tax rates do not take into account payments for Social Security and Medicare. Those are deducted separately." TheStreet Staff, What Is a Marginal Tax Rate? Definition & Example, TheStreet, May 24, 2023 (Apple News link).
market value of a bond
The amount at which a bond is currently trading. • A bond's market value falls when interest rates rise. See Jonathan Weil, Risking Interest Rates Hit Banks' Bond Holdings, WSJ, Nov. 11, 2022 (Apple News link). • C.f. book value of a bond.
Title that has no defects. C.f. insurable title.
In a statute or a contract, a term that indicates that performance is discretionary (not mandatory). • NY SCPA 103(38) gives this definition for "may": "When used in this act, in relation to an act to be performed by the court, means in the discretion of the court."
For purposes of the rule against perpetuities: An identifiable person who is alive at the time that an interest in trust is created.
A mediator is a professional, neutral person who is trained to help litigants come to an agreement about their dispute without the need for a judge to decide it.
"It is a universal rule that when the purpose of a trust has been fully accomplished, the title or estate of the trustee is at an end, and if he is also entitled to the beneficial estate, the two estates meeting in the same person are merged, and he becomes vested in his own right with the entire interest in the property." Blood v. Kane, 130 N.Y. 514 (1892). • Merger can occur in the context of trusts. New York allows a settlor to be both the sole trustee and a beneficiary provided there is at least one other beneficiary, EPTL 7-1.1; but when the settlor is both the sole trustee and the sole beneficiary, merger occurs -- the trust is defeated and title to the trust estate vests in the settlor's personal name. The ability for the settlor to name even just one remainder beneficiary that takes after the settlor dies facilitates the creation of revocable lifetime trusts. EPTL 7-1.1 (when trusts interest not to merge) provides: "A trust is not merged or invalid because a person, including but not limited to the creator of the trust, is or may become the sole trustee and the sole holder of the present beneficial interest therein, whether such interest be vested or contingent, present or future, and whether created by express provision of the instrument or as a result of reversion to the creator's estate." • Merger can also occur in the context of wills with respect to personal property passing under the will after a sole executor, who is also sole devisee and legatee, pays the estate's creditors, or after the such executor assents to the executor's own legacy. Blood v. Kane informs: "The trust estate of a sole executor, who is also the sole devisee and legatee, is solely for the benefit of the testator's creditors, and when they are paid the trust estate sinks into and is merged with the beneficial interest, and the sole devisee and legatee becomes vested with the legal title of all of the testator's estate."
Profits from real property received by someone who is in wrongful possession. • A real property owner who succeeds in a common-law action of ejectment can bring a lawsuit seeking the profits from the use of the land while it was wrongfully occupied and the costs of ejectment. This action is known as an "action for mesne profits," "action of trespass for mesne profits," or "action for the recovery of mesne profits." See, e.g., Combs v. Jackson, 2 Wend. 153 (N.Y. 1828).
In feudal times, land holding from a lord in exchange for a military service to that lord, which was an obligation of a tenant to supply a specified quota of knights to the lord or to make a monetary payment to hire knights. • Also termed, "tenure by knight service." • See tenure. C.f. serjeanty tenure.
money market fund
money market mutual fund (MMMF)
A type of mutual fund that tries to keep its net asset value at a stable $1.00 per share (using special pricing and valuation conventions) and generates interest income, but it is not FDIC-insured. • "Unlike a 'money market deposit account' at a bank, money market funds are not federally insured," but they have "relatively low risks compared to other mutual funds and most other investments and historically has had lower returns. Money market funds invest in high quality, short-term debt securities and pay dividends that generally reflect short-term interest rates. Many investors use money market funds to store cash or as an alternative to investing in the stock market." Money Market Fund, investor.gov.
mortgage insurance premium
A recurring monthly payment that borrowers must pay when obtaining a Federal Housing Administration mortgage. "Because FHA mortgages allow for down payments as low as 3.5% for borrowers with a credit score as low as 580, mortgage insurance is required for all FHA home loans." Victoria Araj, What Is A Mortgage Insurance Premium (MIP)?, Quick Loans, Aug. 5, 2020. C.f. private mortgage insurance.
mortgage protection insurance
Insurance to pay a mortgage or any remaining debts after the insured dies. It "is simply a small term life insurance policy," explains Kelly Maxwell in Mortgage Protection Insurance For Seniors (2022 Update), Seniors Mutual, Aug. 23, 2022. The age limit for mortgage protection insurance is age 80.
"Mothers in the workforce experience additional disadvantage compared to women who are not mothers, including a per-child wage penalty. The 'motherhood penalty' may account for a significant proportion of the gender gap in pay, as the pay gap between mothers and non-mothers could in fact be larger than the pay gap between men and women. Mothers also face additional disadvantages compared to childless women and men." Gender Action Portal, Getting a Job: Is There a Motherhood Penalty?, Harvard Kennedy School: Women and Public Policy Program; see Mary Beth Ferrante, What Your Working Parents Aren't Telling You -- And Why Not Knowing Is Costing You, Forbes, Feb. 2, 2023 (Apple News link) ("Society has normalized the belief that when it comes to being a good employee, having a child or being a caregiver is more of a mark against us than proof of our abilities. This perception is often disproportionately placed on women as evidenced by the 'motherhood penalty' and its series of disadvantages.").
NY MDL § 4(7) defines a "multiple dwelling" as "a dwelling which is either rented, leased, let or hired out, to be occupied, or is occupied as the residence or home of three or more families living independently of each other. On and after July first, nineteen hundred fifty-five, a 'multiple dwelling' shall also include residential quarters for members of personnel of any hospital staff which are not located in any building used primarily for hospital use provided, however, that any building which was erected, altered or converted prior to July first, nineteen hundred fifty-five, to be occupied by such members or personnel is so occupied on such date shall not be subject to the requirements of this chapter only so long as it continues to be so occupied provided there are local laws applicable to such building and such building is in compliance with such local laws. A 'multiple dwelling' shall not be deemed to include a hospital, convent, monastery, asylum or public institution, or a fireproof building used wholly for commercial purposes except for not more than one janitor's apartment and not more than one penthouse occupied by not more than two families. For the purposes of this chapter "multiple dwellings" are divided into two classes: 'class A' and 'class B.'" • See dwelling.
Burial "in which a body is buried without a coffin or with a biodegradable coffin." James FitzGerald, New York approves composting of human bodies, BBC News (Apple News link). • Natural burials are permitted in the United Kingdom. Id.
See nota bene.
net asset value
The bottom-line value of a fund's assets divided by the number of outstanding shares.
An employee's earnings after payroll deductions are subtracted from gross pay. C.f. gross pay.
New Domesday Book
A survey of land ownership in Great Britain conducted in 1874, nearly 800 years after the first. See Domesday Book.
See nonfungible tokens.
In a deed, a statement that says that a property is being conveyed for "One dollar and other good or valuable consideration." Often, deeds with nominal consideration also read, "Ten dollars and other good or valuable consideration." • In New York, reciting nominal consideration is common because a deed must provide evidence of consideration, but it does not have to recite the actual amount of consideration involved.
non dat qui non habet
The principle that an individual may convey no better title to an item of property than that which the individual possesses. • "It is the primary rule of common law, which possesses substantially universal applicability, that an individual may convey no better title to an item of property than that which he himself possesses. This is compressed in legal terminology to the familiar phrase 'non dat qui non habet'." In re Goodchild, 160 Misc. 738 (N.Y. Surrogate's Ct., Kings. Co. 1936).
A trust that is taxed as a separate taxpayer. because the grantor is not deemed to be the owner of the trust corpus for tax purposes. C.f. grantor trust.
non-judicial settlement of an estate
"The informal or non-judicial settlement of an estate permits the executor or administrator to wind-up the administration of the estate, make final distribution, and be released from liability for his actions by agreement with the parties, with no or only limited involvement by the court. . . . The term "informal" is generally taken to refer to the manner in which the account is settled. It may also refer to the account itself. Because an informal settlement does not contemplate judicial review or approval of the account, there is no requirement that the account be in any particular form. Indeed, the account need not even be filed with the court." Susan B. Reuben, Informal Settlement of Estates, NYSBA course book, Fall 2020.
"NFTs are bitcoin-like tokens connected to a digital work of art or other real-world item and sold as a unique digital item." Paul Vigna, DeFi Is Helping to Fuel the Crypto Market Boom -- and Its Recent Volatility, WSJ, June 3, 2021 (Apple News link).
The Normans' defeat of the Saxons in 1066, which changed England's ruling class and system of land holding. • The Norman Conquest introduced military tenure into England.
Latin for "mark well" or "take note." • An indication that what follows is particularly important. • Abbreviated as "N.B."
A part of a judicial opinion that is not necessary to deciding the case at hand. It is not binding on subsequent cases, but is considered persuasive. • Example: "The question was considered by Judge Grover in Juliand v. Rathbone (39 N.Y. 369), but it was not necessary to decide it as the judgment was necessarily as given, whether the court held the one way or the other on the point now under consideration. The remarks of the learned judge upon that branch of the case did not necessarily embody the views of the court and may be regarded as obiter, and the judgment as passing upon the other ground suggested by him." Brennan v. Willson, 71 N.Y. 502 (1877).
"[A] person, other than a tenant or a member of a tenant's immediate family, occupying a premises with the consent of the tenant or tenants." NY RPL § 235-f.
An equitable exception the Statute of Frauds by which courts enforce oral contrast relating to real estate. • Pattelli v. Bell, 187 Misc.2d 275, 721 N.Y.S.2d 734 (Supreme Ct., Richmond Co. 2001):
Part performance "is based on principles of equity, and, specifically, recognition of the fact that it would be a fraud to allow one party to a real estate transaction to escape performance after permitting the other party to perform in reliance on the agreement" (Messner Vetere Berger McNamee Schmetterer Euro RSCG v Aegis Group, 93 NY2d 229, 235; see General Obligations Law § 5-703 ). Part performance alone is not enough. "There must be performance 'unequivocally referable' to the agreement, performance which alone and without the aid of words of promise is unintelligible or at least extraordinary unless as an incident of ownership, assured, if not existing" (Burns v McCormick, 233 NY 230, 232). "What is done must itself supply the key to what is promised. It is not enough that what is promised may give significance to what is done" (id.).
An unincorporated organization with two or more members.
pass-through entity tax (PTET)
Allows partnerships and S corporations to elect annually to pay state and local taxes through the entity and for the partners and shareholders to receive a personal income tax credit equivalent to the tax that the entity paid. See N.Y. Tax Law §§ 860, 861. • Some states, such as New York, enacted the PTET as a response to the state and local tax cap of $10,000 that the Tax Cut and Jobs Act of 2017 imposed. • On April 9, 2022, New York City became the first city in the United States to enact a PTET (retroactive to January 1, 2022). N.Y. Tax Law Article 24-B.
A trust in which the trustee has no duties. C.f. active trust.
An inheritance from one's father or ancestor of the father. • Example: "On some undisclosed previous date each [infant] had received as a legacy from a grandmother two $1,000 bonds . . . . [Because of a wrongful transfer of the legacy by the father of infants, the] court is . . . confronted with the unwelcome alternative of determining either that the patrimony of the infants is lost to them, or that the respondent, who admittedly paid value and had no notice of the facts hereinbefore recited, must refund the proceeds or value of the securities." In re Goodchild, 160 Misc. 738 (N.Y. Surrogate's Ct., Kings. Co. 1936) (emphasis added).
"[A] budgeting mechanism . . . short for 'pay-as-you-go', that says new legislation or executive orders affecting revenues and spending on Medicare, social security and other key programs must be budget-neutral." Guardian staff and agency, Biden, McCarthy agree to raise US debt ceiling - what's in the deal?, The Guardian, May 28, 2023 (Apple News link).
In feudal times, a type of serjeanty tenure that "involved services of a humbler nature" than grand serjeanty, "such as providing military supplies or other articles of small value." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 11 (7th ed. 2020). • "[W]ardship" was incident to grand serjeanty, but not to petit serjeanty . . . ." Id. at 31 n.24.
A formal, written application to a court requesting a judicial decision.
plaintiff in error
postponed power of appointment
A power of appointment that "is exercisable by the donee only after the expiration of a stated time or after the occurrence or non-occurrence of a specified event.” EPTL 10-3.3(d).
"A power is the authority to do any act in relation to property (EPTL 10-2.1). . . . A power is not an estate or interest in land, but an authorization to create an estate in land. The power may be given to a party with no beneficial interest in the land (Root v. Stuyvesant, 18 Wend 257). The power includes the power to revoke the previous estate (Chamber v. Kelsey, supra.)." Estate of Edwards, NYLJ Feb. 18, 2020 at 30, col. 2 (Sur. Ct. Kings County 2000, Sur. Feinberg).
power of appointment
The right to designate who will possess or enjoy property.
power of attorney
A document in which one person (the principal) empowers one or people (the agent) to make specified financial decisions on the principal's behalf.
Non-binding language in a will or trust, such as "I wish," "I hope," or "I desire."
To die before.
An estate in land to which the holder is currently entitled to possession. C.f. future interest.
Planning that focuses on preserving assets for the duration of an individual's retirement, with the possibility of benefiting loved ones during life or upon death. • For example, a financial advisor might create a wealth preservation plan that allows an individual to live off retirement assets while making annual gifts to children. See estate planning.
The common-law rule that land descended to the oldest son on the owner's death. C.f. burgage tenure, gavelkind tenure.
private mortgage insurance
A recurring monthly payment that borrowers must pay when obtaining a conventional mortgage, but only when they are making a down payment smaller than 20% of a home's value. C.f. mortgage insurance premium.
private trust company
"A private trust company, also known as a family trust company, is an entity formed and authorized under state law to act as a fiduciary for a single family, and it is prohibited from transacting business with the general public. Family members are typically defined under state law by their degree of kinship to a designated relative, such as patriarch or a matriarch. Depending on applicable state law, a private trust company can be formed as a limited liability company or a corporation." Jim Weller, The Private Trust Company Solution, LISI Webinar, June 13, 2023.
The process by which a will is given effect after death.
A tax that imposes a larger share of the tax burden on those who have more or earn more. It imposes lower tax rates on lower-income taxpayers and higher tax rates on higher-income taxpayers. See TheStreet Staff, What Is a Progressive Tax? Definition & Example, May 24, 2023 (Apple News link) ("A progressive tax structure allows low-income earners to pay a smaller proportion of their income as tax compared to high-income individuals, who are taxed at progressively higher rates."). C.f. flat tax, regressive tax.
To that extent. • Example: "[T]he wearing apparel remained a part of the assets of the estate and, having been turned over to and accepted by the objectant, must be deemed a pro tanto satisfaction of her distributive rights, with the resultant reduction of the sum to which she is entitled to $ 126.99." Estate of Williams, 295 N.Y.S. 56 (Sur. Ct., Kings Co. 1937) (emphasis added).
An acronym that stands for "pass-through entity tax".
A record created by a government in the normal course of its business.
A financial contract that gives an investor the ability to sell an asset for a set price. • A put is a bet that the asset will trade lower. So, it is considered a bearish contract. • C.f. call.
"Quantitative easing expands the money supply—when the Fed purchases Treasuries and other securities directly from banks and on the open market, it creates money out of thin air to do it. That new cash ends up on bank balance sheets, which they can then use to increase lending to businesses and consumers. The greater availability of credit contributes to lower interest rates, more economic activity, and higher asset prices." Nicholas Jasinski, Saving the Banks Isn't Quantitative Easing, Barron's, March 20, 2023 (Apple News link). • "Since the 2008 crisis, the fed and other central banks have undertaken various rounds of 'quantitative easing' -- creating money to buy government bonds and other assets. The artificial demand for such assets holds down interest rates, which enables political authorities to spend lavishly, run massive deficits and take countries deeper into debt." James Freeman, Paul Singer, the Man Who Saw the Economic Crisis Coming, WSJ, April 7, 2023 (Apple NEws link). • "The Fed has taken some of [Silicon Valley Bank's] losses onto its own balance sheet, and that is in effect a resumption of quantitative easing. There will be more money printed at just the time the Fed was meant to be fighting inflation." Matthew Lynn, Bank collapse spells higher inflation, Money Week, March 2023 (Apple New link).
The rationale of a decision; the legal basis of a decision.
Receipt and Release Agreement
A legal document that contains a summary of the events of an estate administration from the date of death to the closing of the account and that is reviewed and signed by the interested parties at the time the estate was closed, who acknowledge receipt of all property to which each party is entitled, and who agree "to release the executor from all liability with respect to the administration of the estate, to indemnify the executor against any expenses or claims which may at any time be asserted against the executor, and to refund to the executor any amount of such party's total distribution which is either needed to so indemnify the executor or later discovered to be an overpayment to such party." Susan B. Reuben, Informal Settlement of Estates, NYSBA course book, Fall 2020. • This document is sometimes called a "Receipt, Release, Refunding and Indemnification Agreement" or "Agreement Settling Account."
Receipt, Release, Refunding and Indemnification Agreement
See Receipt and Release Agreement.
"[A] recession is a general decline in a country's production of goods and services, measured usually as two consecutive quarters of shrinking growth as determined by the National Bureau of Economic Research." Caitlin Ostroff, The Dow Is Officially in a Bear Market. Here's What to Know., WSJ, Sept. 26, 2022 (Apple News link).
A tax that imposes higher tax rates as income decreases. C.f. flat tax, progressive tax.
In feudal times, a sum paid by a deceased tenant's heir to the lord for the privilege of succeeding to the decedent's lands. • The relief "functioned as a sort of feudal inheritance tax. Inheritance was a privilege to be paid for, not an unconditional right." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 16 (7th ed. 2020). • "Payment of the relief by the heir of a subtenant entitled the heir to immediate possession, but on the death of a tenant-in-chief, the king, by royal prerogative, was entitled to first seisin (primer seisin) of all the deceased tenant's lands, not only those held directly of the king, but also those held of mesne lords. Only after an official inquest to determine heirship, the doing of homage, and the payment of the relief was the heir admitted to seisin or possession." Id. Relief was an incident of tenure.
remedy of distress
In medieval England, a lord who was not provided a service owed by a tenant had the right to seize any chattels found on the land.
"[T]he monthly or weekly amount charged in consideration for the use and occupation of a dwelling pursuant to a written or oral rental agreement." NY RPAPL § 702.
required beginning date
The first date the original retirement account owner was required to begin taking required minimum distributions.
required minimum distribution (RMD)
For certain retirement accounts, the amount an individual must take.
A future interest in property that is retained when a transferor conveys a lesser estate than the transferor had. • A revision arises automatically by operation of law. • When a transfer is made by a will, the heirs of the transferor-testator retain the reversion because they are substituted by law for the decedent.
"[R]isk management is just wealth management through another lens." Joel Schoenmeyer, Early Takeaways from SVB (Post 2), LinkedIn, March 15, 2023.
Tools that financial advisors use to determine a client's tolerance for risk and assign labels, such as, "highly conservative" or "moderately aggressive." Some advisors use tools like Riskalyze, FinaMetrica, and DataPoints. Others are wary of such tools. See Morey Stettner, Risk-tolerance surveys often miss what financial advisers really need to know about you, MarketWatch, Feb. 2, 2023 (Apple News link).
rule against perpetuities
The rule against perpetuities serves as a backstop to prevent dynasty trusts from eroding the estate and gift tax base. The common law rule against perpetuities is that an interest in trust is void unless it is certain to vest, if at all, no later than 21 years after the end of a “measuring life” (i.e., an identifiable person who is alive at the time the interest is created). See Hani Sarji, 🔑Even Under Common-Law Rule Against Perpetuities, Trusts Can Last for Over a Century, Wills, Trusts, Estates, Feb. 11, 2022.
salary reduction contribution
See elective deferral contribution.
scoring a bill
An estimate of the economic impact of a tax bill. Scoring examines: (1) What a bill would cost taxpayers; (2) how much money will come out of the Federal Treasury; and (3) in the case of a tax bill, how much the bill would generate or reduce income to the Federal Treasury. The Congressional Budget Office (CBO), a non-partisan office, does the scoring. See Sen. Chuck Grassley, Ask Chuck: What does it mean to “score” a bill?, YouTube, Sept. 15, 2009.
In feudal times, the possession of land.
A trust in which the grantor and the trustee are the same person.
A trust in which the grantor retains a beneficial interest (i.e., is a beneficiary).
In feudal times, land holding from a lord in exchange for a personal, non-military service to that lord. • "Serjeanty" is derived from the medieval Latin word, "serientia," which means "service." • The king's administrative and household officials (such as the marshal, steward, butler, and chamberlain) provided serjeanty tenure, a non-military service. See tenure. C.f. military tenure.
In feudal times, a duty, obligation, or monetary fee provided by a tenant to a lord. • The service was fixed at the creation of a tenure. • Some services were military in nature (see [military tenure](#military tenure)); others were non-military in nature (see serjeanty tenure).
An agreement between litigants about a case.
A person who creates a trust. Also called, "creator," "donor," "grantor," or "trustor."
See shorting a stock.
shorting a stock
Betting that the price of a stock will decrease. • In a short sale, an investor sells borrowed shares, hoping to buy them back at a lower price. • See Joanna Tan, Elon Musk says he confronted Bill Gates about shorting Tesla, CNBC, April 23, 2022 (Apple News link).
Silicon Valley Bank
A California-based, regional bank serving U.S. venture capitalists and technology startups that rapidly collapsed in March 2023, which was the second-biggest bank failure in U.S. history in terms of assets, leading the Federal Deposit Insurance Corp. to take control of the bank by creating a new entity, the Deposit Insurance National Bank of Santa Clara, which received all of SVB's deposits. The reason for SVB's collapse is because it purchased Treasury bonds and mortgage-backed bonds when interest rates were at historic lows, but these securities declined in value when interest rates rose. Instead of holding on to the bonds, as it intended, SVB was forced to face up to the losses when it was flooded with withdrawal requests in March 2023: Clients tried to withdraw $42 billion on March 9. See Rachel Louise Ensign, Corrie Driebusch & Meghan Bobrowsky, Silicon Valley Bank Closed by Regulators, FDIC Takes Control, WSJ, March 10, 2023 (Apple News link); Peter Santilli & James Benedict, Silicon Valley Bank's Meltdown Visualized, WSJ, March 11, 2023 (Apple News link).
For purposes of the generation-skipping transfer tax, a transferee who is two or more generations younger than the transferor. IRC § 2613. Examples: (1) In a transfer from grandparent to a grandchild, the grandchild is a skip person. (2) In a transfer from a great-uncle to a great-niece, the great-niece is a skip person.
In feudal times, a person who was the property of a lord and had no lands. C.f. freeman.
In feudalism, "the great residual tenure. A free tenant who did not hold by military service, serjeanty, or frankalmoin was deemed to hold in socage. . . . It was destined to become . . . the one surviving form of tenure."Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 12 (7th ed. 2020).
An acronym that stands for spousal access lifetime trust.
The auction house owned by French telecom billionaire Patrick Drahi.
A verdict by which the jury resolves specific fact questions, which are submitted to them by the judge.
A clause in a trust that protects a beneficiary's interest from the claims of creditors.
Periods of high prices and slow growth.
Statute of Frauds
A rule that invalidates oral agreements respecting real property. • "The alleged oral agreement is one for an interest in real property and thus falls within the purview of the Statute of Frauds which holds that '[a]n oral agreement to convey an estate or interest in real property, other than a lease for a term not exceeding on year, is nugatory and unenforceable,' and '[a] party to the agreement may legally and rightfully refuse to recognize or perform it' (*Woolley v Stewart, 222 NY 347, 350-351; see, General Obligations Law § 5-703)." Pattelli v. Bell, 187 Misc.2d 275, 721 N.Y.S.2d 734 (Supreme Ct., Richmond Co. 2001).
Statute of Wills (1540)
A law in England that allowed land to be devised. • Prior to the Statute of Wills, land descended to the eldest son, and landowners who wanted to deviate from primogeniture turned to uses.
Statute Quia Emptores (1290)
(1) "[G]ranted to 'every freeman'' the right to alienate without paying a fine to his lord. This statute was construed as not affecting the rights of the king, such that tenants in capite continued to be subject to fines for alienation until 1660, with the adoption of legislation abrogating most of the incidents of tenure." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 18 (7th ed. 2020).
(2) Prohibited the grant of land in frankalmoin by anyone other than the king, unless they obtained the king's permission.
Another term for the laws of intestacy (or laws of descent and distribution). • Each state has enacted statutes that provide a default distribution scheme (i.e., a default estate plan) that approximates the disposition of assets that a typical person would make upon death.
When a public company repurchases its own stock. • A stock buyback can increase the stock's price and increase earnings-per-share. • Proponents of stock buybacks argue that they benefit all owners of the company; opponents of stock buybacks argue that stock buybacks are a form of market manipulation ("nothing but paper manipulation," decries Elizabeth Warren), cannibalize innovation, and misuse capital (capital is used to push stock prices up rather than for a capital expenditure, such as a new factory, or dividends). See Will Daniel, Tactic Facilitates 'Stock Manipulation' and Hurts the Economy, Wealth Advisor, April 11, 2023.
subpoena ad testificandum
An order to a witness to appear in court and give testimony.
subpoena duces tecum
An order to a subpoenaed party to appear in court and bring specified documents. • "A subpoena duces tecum for use at a hearing is not the equivalent of an order of disclosure, but an order to the subpoenaed party to have the documents in court so that the court may make appropriate direction with respect to the use of such documents. People ex rel. Hickox v. Hickox, 64 AD2d 412, 413-14 (1st Dept. 1978)." Harbor Tech LLC v. Correa, 73 Misc.3s 1211(A), 2021 N.Y.Slip Op. 50995(U) (Kings Co. Civil Court Oct. 14, 2020, Stoller, J.).
In a power of attorney: One or more people whom the principal can designate who will serve as the agent in the event any initial or predecessor agent resigns, dies, becomes incapacitated, is not qualified to serve, or declines to serve. NY GOL 5-1508(2).
Someone who can take over as trustee and manage the trust's assets when the acting trustee dies, becomes incapacitated, resigns, or is removed.
"[A] state of confusion occurring later in the afternoon and night often found in individuals with dementia or Alzheimer’s." Kelly Mould, Opinion: Cognitive Decline: how to spot it, what to do, MarketWatch, Jan. 21, 2023 (Apple News link).
surrender and admittance
In feudal England, land held in copyhold tenure could be transferred only by surrender and admittance, rather than the common-law methods of feoffment and grant that were available to tenants hold by free tenure. The copyhold tenant could, by custom, surrender the land to the lord of the manor and designate another person as the tenant; and the lord was bound to admit this person into the tenancy. See villein.
The executor where there are two or more executors, and one or more die.
A mutual fund that gradually adjusts asset allocation over time into more conservative categories as it approaches a target retirement age.
tax bracket system
"The U.S. and many countries use . . . a tax bracket system in which a different tax rate is applied to different levels of taxable income." TheStreet Staff, What Is a Marginal Tax Rate? Definition & Example, TheStreet, May 24, 2023 (Apple News link).
Reduces taxes dollar-for-dollar.
Reduces taxable income.
tax installment agreement
A long-term monthly payment plan through the IRS. If you owe $50,000 or less for tax, penalties, and interest; then you can set up an installment plan online. For larger amounts, you must call the IRS.
Adjusted gross income minus the greater of the standard deduction or itemized deductions. • When computing income taxes, taxpayers apply income tax rates to taxable income.
A tax strategy that uses losses to offset profits.
Creating and implementing a plan to minimize taxes. • Tax preparation is essentially forward-looking. C.f. tax preparation.
Reporting income and deductions on a tax return. • Tax preparation is essentially backward-looking. C.f. tax planning.
The percent by which a tax base is multiplied to determine a taxpayer's tax liability. See, e.g., IRC §§ 1 (federal income tax), 2001 (federal estate and gift taxes), 3101 (federal employment tax), and 4001 (federal excise taxes).
tenancy by the entirety
A special joint ownership for married couples based on the idea that a married couple is one person. Each spouse owns the whole, not a share of the whole. Creating it requires the four unities of time, title, interest, and possession. Its key feature is a right of survivorship, which is indestructible. This means that upon the first spouses' death, the surviving spouse remains seized of the entire property. The right of survivorship is indestructible because a spouse cannot bring a partition action to sever and terminate the tenancy by entirety, and one spouse cannot defeat the other spouse's right of survivorship. • In New York, a tenancy by the entirety applies only to real property and COOPs. EPTL 6-2.1(4). It is the default estate when such property is transferred to a married couple. EPLT 6-2.2(b), (c). The deed does not need to recite the intent or interests of the parties. See Bartholomew v. Marshall, 257 A.D. 1060, 13 N.Y.S.2d 568 (3rd Dep't 1939) (where property was conveyed to husband, wife, and child "without further words showing the intention of the parties," finding that "[w]hen real property is conveyed to a husband and wife and third person, the husband and wife have one moiety as tenants by the entirety, and the third person is a tenant in common with them of the other."). • The notion of two people, each owning the whole individual, as if they were one person is difficult to grasp and counterintuitive. In a dissenting opinion, Chief Justice Weintraub stated, "The estate by entirety is a remnant of other times. It rests upon the fiction of a oneness of husband and wife. Neither owns a separate distinct interest in fee; rather each and both as an entity own the entire interest. Neither takes anything by survivorship; there is nothing to pass because the survivor always had the entirety. To me the conception is quite incomprehensible." King v. Greene, 30 N.J. 395, 413, 153 A.2d 49, 60 (1959). • A tenancy by the entirety "is incompatible with community property system's basic theory of a conjugal partnership in acquisitions and gains and, therefore, was never recognized in the eight community property states." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 303 (7th ed. 2020).
In feudal times, a person holding land directly under the king. In Latin, the term is "tenant in capite."
tenancy in partnership
"[A]s the name indicates, a unique form of co-ownership by which specific partnership assets, both real and personal, are held by partners. The concept of tenancy in partnership is a creation of the Unif. Partnership Act, § 25. The Act has been adopted in all states. See 6 U.L.A. 7 (Supp.1987)." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 309 n.1 (7th ed. 2020).
tenant in capite
tenant in demesne
In feudalism, an individual who actually occupied land and "had property rights consisting of a general right to possess, use, and enjoy the land." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 7 (7th ed. 2020).
In feudalism, peasants who tilled the soil. Tenants paravail formed the broad base of the pyramidal feudal social structure.
In feudal times land holding from a lord in exchange for a service to that lord. • Tenure was classified either as unfree or free.
tenure by divine service
In feudalism, a type of frankalmoin tenure that required specific religious acts (such as saying mass for the grantor a specific number of times a year) by the religious grantee.
tenure by knight service
See military tenure.
Traditionally, an instrument disposing personal property. • Historically, a testament related solely to personal property and a will to real estate.
Ways of passing property at death other than a will. • Testamentary substitutes include lifetime trusts, joint ownership with a right of survivorship, and assets that have a beneficiary designation filled out (such as life insurance and retirement plan designations).
A trust that is created under a will and takes effect after the testator dies. C.f. lifetime trust.
Someone who dies with a will. C.f. intestate.
Someone who writes a will.
the great wealth transfer
"[W]hen Baby Boomers will pass on more than $70 trillion in wealth to younger generations." Allison L. Lee, I Wish I May, I Wish I Might: Estate Planning's Gentle Nudge, Kiplinger, March 22, 2023 (Apple News link). • Cerulli Anticipates $84 Trillion in Wealth Transfers Through 2045, Cerulli Associates, Jan. 20, 2022.
The New Domesday Book
A survey of Great Britain conducted in 1874. • See Domesday Book.
the observer effect
“[T]he fact that observing a situation or phenomenon necessarily changes it,” Ken Baclawski, The Observer Effect.
the TINA effect for stocks
A market in which bond yields are so low that stocks are the only investment choice. • "Tina" stands for "there is no alternative." Investing in just stocks instead of allocating funds between stocks and bonds is considered suboptimal. See Investopedia, TINA: There Is No Alternative. • For example, the "TINA effect" occurred in August 2019 when 60% of the stocks in the S&P 500 (1.7%) and most individual sectors offered dividend yields that exceeded the yield on 10-year U.S Treasury notes (1.640%). See Michael Wursthorn, Falling Bond Yields Make Equities Hard to Ignore, WSJ, Aug. 13, 2019 (Apple News link). • In April 2022, market conditions (falling stock prices and rising bond yields) signaled the end of the TINA effect. See Dion Rabouin, Wall Street Finds New Value in Cash as Global Fears Weigh on Markets, WSJ, April 25, 2022 (Apple News link).
Thrift Savings Plan (TSP)
A retirement plan for employees of the United States government, including members of the uniformed services. See https://www.tsp.gov/
Respecting real property: "The word 'title' has two meanings: 1) the right to ownership of real property, and 2) evidence of ownership by a deed." Terrence Dunn & Ira H. Goldfarb, Title to Real Property, New York City Bar: Legal Referral Service, July 2017. • "A properly-conveyed deed should be recorded to provide notice to the world of ownership. Title to real property can be held by one person or by multiple people. Title can also be held by a trust or a business entity. When title is held by more than one owner, there are three ways to hold title to the same property: Tenants in common . . . Joint tenants . . . Tenants by the entirety . . . ." Id.
Insurance that protects owners of real property and mortgage lenders against future claims for past defects in a chain of title regarding a specific piece of property. • Title insurance covers defects in a property's title that show up on a title report, such as an open mortgage, a governmental lien, or an open mortgage. • Title insurance does not cover (1) the value of the property (so, it doesn't insure that someone is getting a good deal for the purchase price), (2) the use of the property (e.g., commercial or residential), (3) the zoning of the property (e.g., high density zoning v. low density zoning), (4) the ability to obtain permits from municipalities, (5) hazardous materials (i.e., environmental issues), and (6) issues regarding the land (e.g., damage caused by activities on adjacent properties).
A written analysis of the status of title to real property.
total value locked
"[M]easures assets deposited as collateral on DeFi platforms." Paul Vigna, DeFi Is Helping to Fuel the Crypto Market Boom -- and Its Recent Volatility, WSJ, June 3, 2021 (Apple News link). See decentralized finance.
See U.S. Treasuries.
trial by judge
See bench trial.
A legal device in which a settlor transfers the legal title of assets to one or more trustees, who manage and distribute the assets to one or more beneficiaries.
One or more people named in a trust to act in a non-fiduciary capacity to ensure the trustee is adhering to the trust settlor’s intent and wishes.
In a third-party trust, a person (i.e., an individual or a financial institution) who accepts the transfer of assets from a settlor and agrees to manage and distribute the assets to the trust's beneficiaries pursuant to the terms of the trust agreement. In a trust where the settlor is the sole trustee, an individual who makes a written declaration to manage and distribute assets (that the individual transferred to the trust) to the trust's beneficiaries (who the individual named). • Trustees are fiduciaries, which means they are held to a higher standard when discharging their duties. • A trust can name one or more trustee. • When a trust has more than one trustee, the trust should state whether they have the same or different duties, and whether they can act jointly or separately.
In feudalism, tenure where the services depended on the will on the lord and were of a servile nature. • Unfree tenants could assert legal remedies against those disturbing their possession only in each tenant's lord's court (not in the king's courts). C.f. free tenure.
An asset that has appreciated in value but has yet to be sold.
An asset that has gone down in value but has yet to be sold.
Bonds issued directly by the U.S. government. • They are "[g]enerally considered one of the safes assets on the planet." Adam Grealish, Five Places to Put Cash Rather Than in the Bank, Kiplinger, May 1, 2023 (Apple News link).
In feudalism, an individual who swore fealty to a lord.
The place of a trial.
A declaration swearing that the pleadings or statements made in a document are true. NY CPLR 3020 defines a verification as a “statement under oath that the pleading is true to the knowledge of the deponent, except as to matters alleged on information and belief, and as to those matters he believes it to be true.”
When a beneficiary meets all of the conditions that are necessary for an interest in trust to take effect. • An unborn beneficiary's interest is always unvested because being born is one of the conditions that are necessary for vesting. • C.f. abeyance.
In thirteenth century England, someone who was a serf, not a slave. A villein had no rights against the villein's lord (other than protection) but had the rights of a free man against third persons. A villein could not leave the manor, which the villein worked for the lord. The villein had a humble dwelling on the manor. The villein's rights were protected only in the manorial courts, not the royal courts. • In fourteenth century England, a villein gradually changed into someone who was a free man whose land holding was fixed by manorial customs and no longer dependent on the lord's will. • This customary tenure eventually became known as "copyhold tenure" because the title to land was recorded on the rolls of the manorial court, and a copy of the rolls was delivered to the tenant. Land held by "copyhold tenure" was transferable only by surrender and admittance, not by the common-law methods of feoffment and grant that were available to free tenants. "The tenant could, by custom, surrender the lands to the lord of the manor to the use of another person designated by the tenant, and the lord was bound to admit such person into the tenancy. The surrender and admittance were recorded on the rolls of the manorial court, and a copy of the rolls were delivered to the new tenant as evidence of his title. Hence, the tenant was said to hold by a copy of court roll, and the form of holding was labeled copyhold tenure." Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 14 (7th ed. 2020). • The Law of Property Act, 1922, abolished copyhold tenure, as of January 1, 1926, and converted it into free and common socage.
Incident to one's office; stemming from one's office. • "All real estate no disposed of by the will descends to the heirs, and many difficult questions of construction formerly arose in deciding whether the title was devised by the will to the executor or whether he had merely a naked power to sell land, the title to which was in the heir or devisee. So also it was frequently important to determine whether the power of sale was a power incident to the office of executor, a power virtute officii, or whether it was a collateral trust." Powers of Sale in an Executor in Pennsylvania.
See volatility index.
"The VIX 'fear' index, a measure of stock market volatility that shoots up when investors grow anxious . . . ." Michael Hiltzik, Column: The Fed's anti-inflation work is almost done, with an assist from the banking crisis, Los Angeles Times, March 22, 2023 (Apple News link).
warrant of eviction
The legal document allowing an eviction to occur.
In feudal times, when certain tenants (such as those who held by tenure by knight service) died with minor children, the lord became the guardian of both the person and lands of the heir.
Selling or trading securities (such as stocks) at a loss, and then buying substantially identical securities within 30 days before or after the date of the sale.
A doctrine that limits a life tenant's use of land.
The transmission of wealth to others during life (by an outright gift or transfer to a trust) or upon death (by a will, trust, will substitute, or operation of law).
Estate tax, gift tax, and generation-skipping transfer tax.
(1) Someone who actively focuses on issues of justice (racial and social), the environment, or other societal issues. • "The idea that patriarchy, white supremacy, transphobia, homophobia, Islamophobia, and other ills inexorably saturate our lived realities and that the highest good is to uncover and oppose them is, I think, a central component of 'wokeness' as both its proponents and critics understand it." Thomas Chatterton Williams, You Can't Define Woke, Atlantic, March 17, 2023 (Apple News link).
(2) An adjective that some Republican politicians use to bash any policy that they oppose, specifically one they think is "liberal." It's an appeal to bias as a means to avoid substantive conversation about the particulars of an issue. See, e.g., Sahil Kapur, Josh Hawley labels Silicon Valley Bank 'too woke to fail', NBC News, March 2023 (Apple News link) ("Republicans like Florida Gov. Ron DeSantis and House Oversight Chair James Comer of Kentucky claimed that the bank was too focused on policies around diversity and its consideration of environmental and social factors in investments — known as ESG."); Doyle McManus, Column: Silicon Valley Bank's collapse may be a blessing in disguise, Los Angeles Times, March 19, 2023 (Apple News link) ("Republican politicians provided a dose of comedy, blaming SVB’s financial blunders on the imaginary menace of “woke banking.” There’s no evidence that the bankers’ political leanings, "woke" or otherwise, affected their balance sheet."). • Hani's opinion: Politicians who forestall conversation by using such adjectives get an A+ for rabble-rousing and an F for analysis. For example, to suggest that regulators took over SVB because it is too "woke" overlooks the underlying economics, which Jonathan Weil discusses in his prescient article, Rising Interest Rates Hit Banks' Bond Holdings (WSJ, 11/11/2022, Apple News link), several months before the collapse of SVB: "SVB Financial Group, the parent of Silicon Valley Bank, said the market value of its held-to-maturity bonds was $15.9 billion less than their balance-sheet value, as of Sept. 30. That gap was slightly more than SVB’s $15.8 billion of total equity." See Thomas Chatterton Williams, You Can't Define Woke, Atlantic, March 17, 2023 (Apple News link) ("I have argued for years now that 'woke' is not a viable descriptor for anyone who is critical of the many serious excesses of the left yet remains invested in reaching beyond their own echo chamber. The word is more confusing than useful, and we should make good-faith efforts to avoid using it.").
Traditionally, an instrument disposing real property. • Historically, a testament related solely to personal property and a will to real estate. • A will operates as a devise and needs no executor.
words of limitation
At common law, words in a conveyance that indicate the estate that has been created. • For example, in the grant "to A and his heirs," the words "and his heirs" are words of limitation. C.f. words of purchase.
words of purchase
At common law, words in a conveyance that identify the grantee. • For example, in the grant "to A and his heirs," "A" is the only word of purchase because it identifies the recipient of the property. C.f. words of limitation.
Lawyer and writer. Husband, father of daughter, son, brother to one brother and two sisters, uncle to eight nieces and nephews, and great uncle. Has two dogs and two cats. Loves technology and music.
Leave a Comment