Glossary – F

glossary

 

 

 

FAA
Federal Alcohol Administration. Federal Aviation Administration.

FAIR
Fair Access to Insurance Requirements.

Fair Market Value
Price that would be paid for property by a willing buyer from a willing seller both knowing all the pertinent facts which would effect value and neither under any compulsion to buy/sell.

Fam. C.
Family Code.

Family Allowance
Typically applies only for a limited duration, during probate administration of an estate, to provide support to surviving dependents.

Family Deductible
Is one large deductible that the entire covered family must meet before coverage begins.

Family Limited Partnership
Used to move wealth from one generation to another.

Family Pot Trust
aka Pot Trust. A trust for children in which the trustee decides how to spend money on each child, taking money out of the trust to meet each child’s specific needs. One important advantage of a pot trust over separate trusts is that it allows the trustee to provide for one child’s unforeseen need, such as a medical emergency. But a pot trust can also make the trustee’s life difficult by requiring choices about disbursing funds to the various children. Most pot trusts end when the youngest child reaches a certain age, usually 18 or 21.

Family Trust
Also called credit shelter, B, or bypass trust. In thye most basic plan, on the first spouse’s death, an amount of cash and property equal to the then applicable exclusion amount passes to a family trust so there is no estate tax on that amount. The family trust will often provide for income and discretionary distributions of principal to the surviving spouse; drafted so that when the surviving spouse dies, none of the trust assets are included in the surviving spouse’s estate. It can be set up in either a will or a living trust.

FAPT
Foreign Asset Protection Trusts.

FATCA
Foreign Account Tax Compliance Act.

FATF
Financial Action Task Force.

FBA
Foothills Bar Association.

FBAR
Foreign Bank and Financial Accounts.

FBO
Family Business Office. A company that manages investments and trusts for a single family.

FC
Family Code. Funding Coordinator.

FCA
False Claims Act.

FDIC
Federal Deposit Insurance Corporation.

Federal Estate Tax
See Estate Tax, supra.

Fiduciary
Anyone responsible for the custody or management of property belonging to others, such as an executor, administrator, trustee, guardian, or conservator.

Fiduciary Duty
The high degree of trust, responsibility, and objectiveness required of anyone acting as a fiduciary.

Fee Simple
An absolute estate in which the owner is entitled to the entire property, with unconditional power of disposition during his life.

Fee Tail
A freehold estate in which there is a fixed line of inheritable succession limited to the issue of the body of the grantee or devisee, and in which the regular and general succession of heirs at law is cut off. The failure of heritable issue results in ownership returning to grantor, a reversion.

Fee-for-Service
A payment system for health care in which the provider is paid for each service given. This phrase is associated with the traditional indemnity and reimbursement plans as well as the current major medical and medical expenses plans. It is also a method that managed care plans such as PPOs and POS use to pay the contracted providers for their services.

FEGLI
Federal Employee Group Life Insurance.

FEHBP
Federal Employees Health Benefits Program.

FERS
Federal Employee Retirement System.

Fertile Octogenarian
Is one of the fantastic presumptions under the Rule Against Perpetuities.

FET
Federal Estate Taxes.

FETE
Federal Estate Tax Exemption.

FEWA
Forensic Expert Witness Association.

FFL
Federal Firearms License.

FIA
Fiduciary Accounting Income.

FICA
Federal Insurance Contributions Act.

FICO
A corporation providing credit risk analysis.

Fictional Eraser
Is a technique by which a court may ignore words in a document that create an ambiguity, in an effort to properly interpret the document. Usually applied in latent ambiguities of the inaccuracy, and less often the mis-description, variety.

Fiduciary
A person owing a fiduciary duty to another. Includes, inter alia, personal representatives, executors, and administrators.

Fiduciary Duty
Highest duty of honesty and loyalty recognized by the law.

FIFO
First In First Out.

FILO
First In Last Out.

Final Account
The last account and report filed by a conservator of the estate after his or her administration of the conservatorship has ended by the conservatee’s death, by the conservator’s voluntary resignation approved by the court, by the conservator’s removal, or by termination of the conservatorship and restoration of the conservatee’s authority to handle his or her own affairs. See Account Current.

Financial Planning
The process of individuals and families understanding their money and their total financial pictures; and planning in advance so they can financially achieve their family legacy, charitable, business, tax, disability, and retirement planning goals. Financial planning bridges tax law, elder law, estate planning, investing, accounting, actuarial science, and life insurance.

FINRA
Financial Industry Regulatory Authority.

First Dollar Coverage
100% of claims are covered, beginning with the first dollar; no deductible.
Means there is no deductible in a health or medical insurance policy, and likely no coinsurance.

FIT
French Inheritance Tax.

Flexible Spending Arrangement
Commonly known as a flexible spending account, is one of many tax-advantaged financial accounts that can be set up through a cafeteria plan of an employer. An FSA allows an employee to set aside a portion of his/her earnings to pay for qualified expenses as established in the cafeteria plan: most often medical expenses, however can also be used for dependent care.

FSAs are tax-free accounts to pay for healthcare costs. They are not insurance. An employer can set up a FSA allowing an employee to put tax-free money into the account. The employee can use the money in the account to pay their deductible, co-pays, and other health care costs that their health plan does not cover. They can also pay for benefits not covered by the health plan, such as OTC meds, eyeglasses, or dental care.

Funds in the FSA must be spent during the year or it is lost. No withdrawal or rollover as with HSAs. Also, FSA funds may be spent on childcare, but this is not a valid expense from an HSA.

Flip CRUT
Flip Charitable Remainder Unitrust. Flip Unitrust.
It’s a special type of Charitable Remainder Trust, allowing you to defer the annual income payout until after the real property sel

Flip Unitrust
Flip Charitable Remainder Unitrust . An abbreviation for charitable remainder unitrust with flip provisions. A charitable remainder trust that starts out as a charitable remainder unitrust with net income makeup provisions but “flips” to a standard charitable remainder unitrust upon the occurrence of a certain predetermined event.

FLLC
Family Limited Liability Company.

FLLP
Family Limited Liability Partnership.

FLP
Family Limited Partnership. A limited partnership established under state law in which all the partners are family members or entities that are owned by family members. Typically used by the senior generation to facilitate the transfer of assets to younger family members, often at a discount (i.e., the value of the partnership interests are discounted from the value of the assets held by the partnership and represented by those partnership interests.

FLS
Firearms Law Summary.

FMLA
Family & Medical Leave Act.

FMV
Fair Market Value.

FO
Family Office.

FOBD
Family Owned Business Deduction.

Forced Election Estate Plan
Is the same as the Widow’s Election.

Forced Heir Share
Is another term for the elective share or a Pretermitted Heir share.

Forfeiture Provision
Is one form of spendthrift provision. Also known as a Cessure Provision.

Formalities
Are the rules for valid execution.

Four Corners
A way of referring to a document and taking cues only from what is contained in it to interpret its meaning.

FPDA
Flexible Premium Deferred Annuity.

FPL
Federal Poverty Level.

FPOA
Financial Power of Attorney.

Franchise
Franchise health plans provide health coverage for groups too small to be a true group. There is no master contract. Individual policies are issued instead of a group policy. May require proof of insurability, and premiums can be paid by the employer or share with the employee. Premiums for this type of plan are usually less than for an individual policy, but more than a group policy. No conversion is needed since the employees were already issued an individual plan.

Fraud
A knowing misrepresentation.

Fraud In The Execution
Relates to deceit regarding the terms or nature of a document.

Fraud In The Inducement
Relates to deception in the facts underlying the testator’s formulation of intent.

Fraudulent Conveyance (or Transfer)
A gift which is subject to attack by the donor’s creditors. Being renamed to Voidable Transfer Statutes.

Free Look
The free look provision allows a the insured a period of days to look over the policy and, if dissatisfied for any reason, return it for a full refund. It is commonly 10 days from the date the policy is delivered. This provision applies to individual health and disability policies. Disability income, Long-Term Care, Medicare Supplements, and any policy issued to persons 65 or older must offer a 30 day free look.

FSA
Flexible Spending Arrangement. Flexible Savings Account. Farm Service Agency (subsidy program).

FSI
Fellow of the Securities & Investment Institute.

FST
Fair Share Tax.

FT
Family Trust.

FTB
Franchise Tax Board (California).

FTE
Full-Time Equivalent.

Funded Trust
Means that the trust owns assets during the settlor’s life, usually to provide asset management and probate avoidance, and is a valid non-probate will substitute.

Funding
The process of placing assets into a trust.

FUTA
Federal Unemployment Tax Act.

Future Interest
An interest in property to which the owner is not (yet) entitled to present possession or enjoyment but who may be entitled to possession or enjoyment in the future.

FWIW
For What It’s Worth.