Glossary – I

glossary

 

 

 

IADL
Instrumental Activities of Daily Living scale.

IAR
Investment Advisor Representative.

IC-DISC
Interest Charge Domestic International Sales Corporation.

ICC
Interstate Commerce Commission.

IDBT
Intentionally-Defective Grantor Trusts.

IDGT
Intentionally Defective Grantor Trust.

IDIT
Intentionally Deficient Irrevocable Trust.

IEAE
Income and Expenditure Accounts.

IEP
Initial Enrollment Period.

IEVS
. . .

IGT
Irrevocable Grantor Trust.

IHSS
In Home Supportive Services.

IIPPA
Insurance Information Privacy and Protection Act.

ILIT
Irrevocable Life Insurance Trust.

Illegitimate
Children born out-of-wedlock.

Imperative Power
Is one that the law treats the powerholder as having to exercise, usually because there is no default beneficiary. Failure may result in distribution to the permissible appointees in equal shares under an implied default provision. Also known as Power in trust.

Implied Default
Is the equitable disposition of power of appointment property as to which there is no effective default provision.

Implied Gifts
An equitable device to fill gaps in a disposition to accomplish what a court believes the maker of the document meant to provide.

Implied Trusts
Implied trusts are the result of the court’s equitable powers. Either a resulting trust or constructive trust.

In Hand Payment
Provisions require a trustee to make distribution directly to the beneficiary, constituting a form of spendthrift protection.

In Terrorem (Clause)
A clause in a will designed to deter anyone from contesting its provisions by providing that any devise to a contestant in the will is forfeited by such a contest.

Inaccuracy
Is a latent ambiguity that is an inaccurate description of only one asset, person, event, etc. See Equivocation and Misdescription.

Incapacity
Is the state of being unable to manage your own affairs, or lacking the mentality to validly execute a document.

Inchoate Dower
A wife’s interest in the lands of her husband during his life, which may become a right of actual dower upon his death.

Incidents of Ownership
Powers to control a life insurance policy. If a person holds incidents of ownership of a life insurance policy, the death benefits are considered as part of the decedent’s estate. Any rights or privileges that the insured has in a life insurance policy, such as the right to change the beneficiary of the policy or to access its cash value in any way.

Income In Respect of Decedent
Income that decedent was entitled to receive that was not properly includable in his or her taxable income before death. IRC §691.

Income Trust
An income trust is an investment that may hold equities, debt instruments, royalty interests or real properties. The trust can receive interest, royalty or lease payments from an operating entity carrying on a business, as well as dividends and a return of capital.

Incompetent
A person who has been legally declared by a court to be unable to handle his own affairs.

Inconsistency
In a subsequent instrument revokes the prior document to the extent the differences cannot be reconciled.

Incorporation By Reference
Where one document treating another document as if it was fully reproduced in the first.

Indemnify
To make a person whole by restoring that person to the same financial position that existed before the loss.

Indemnity Payment
Payment is based on a stated amount, regardless of the actual expenses incurred.

Independent Legal Significance
Implies that something else stands on its own – has its own independent legal significance – and is valid notwithstanding its indirect effect on a will.

Independent Practice Association
Is a separate legal entity that acts as a third party between the providers of health care and the Managed Care Organization. In an IPA, a large number of physicians will be covered by a single agreement. This gives the MCO an immediate and impressive market presence. For the MCO, working with an IPA is similar to dealing with a union.

Independent Trustee
A person named in a charitable trust to perform certain duties, especially if the trust owns an annuity policy or a hard-to-value asset such as real estate. An independent trustee is someone who is not related to the trust-maker, the trust-maker’s spouse, or to any other income beneficiary, and is not subordinate to or controlled by the trust-maker or these other individuals, such as an employeed.

Individual Retirement Accounts
Conventional-an individual retirement account in which account holder’s contributions are tax-deductible. Withdrawals are subject to income tax.
Roth-an individual retirement account in which account holder’s contributions are not deductible, but all withdrawals from the account are free of income taxes.

Informal Probate
A form of probate where the personal representative may liquidate assets and make distributions without prior approval by the court.

Informal Trust
See Payable-On-Death Account.

ING
Incomplete-gift NonGrantor trust.

Inheritance Tax
A tax on the receipt of an inheritance. California has no inheritance tax. California does receive a portion of the federal estate tax, but this sum is credited to the federal tax owed.

Installment Sale
Sale of an asset in exchange for an interest-bearing promissory note payable over 2 or more tax years.

Instrument
A generic term for a document by which an interest in property passes, including wills, deeds, trusts, etc.

Insurance
A contract that indemnifies another against loss, damage, or liability arising from an unknown event. Insurance is a social device for spreading the chance of financial loss among a large number of people.

Insurance Trust
Such trusts may own the policy of insurance or may be only the designated beneficiary of the deth proceeds of the policy, and may be funded or unfunded during the insured’s life. A valid nonprobate Will substitute.

Insuring Clause
The clause in a policy that specifies in brief the contract’s intent (promise). It is usually the initial (first) policy clause. In general, ir represents the insurer’s promise to pay under the conditions stipulated in the policy. The insuring clause performs these functions:

(1) Describes the general scope of coverage;
(2) Provides and definitions required;
(3) Sets forth the conditions under which benefits will be paid.

Intangible Personal Property
Personal property without physical form. Includes stock in a corporation, pension rights, patents, copyrights, etc.

Integration
Is the coordination of multiple pages of a single document, which may include those validly executed at different times, such as a Will and codicils to it.

Intent
Usually is associated with Will execution or revocation. It also may arise in construction (interpretation of document meaning) cases.

Inter Vivos Gift
An asset given away during life. To be a gift, the giver cannot retain any interest in the asset, nor can the giver maintain any control over it. Inter Vivos Gifts often given to reduce the size of the taxable estate.

Inter Vivos Trust
See Living Trust.

Interest
Interest or an interested witness means taking more under a document than if it was not signed or valid, such as because the witness is a beneficiary under the document.

International Will
A will which comports to the requirements a 1973 treaty and can be probated in any country which ratified the treaty.

Interpretation
Is the process by which a court seeks to translate or define what a document means. As opposed to construction, which is more about what the maker meant to say, this is about what it does in fact provide. Sometimes referred to as “reading the lines” instead of “reading between the lines.”

Intestate
The condition of dying without a valid will. One who dies without a valid will.

Intestate Property
Probate property not validly disposed of by a Will.

Intestate Succession
The method prescribed by law for the distribution of an intestate estate. Under California law property is distributed in the following priority: (1) spouse or domestic partner; (2) children; (3) parents; (4) siblings; (5) nieces and nephews; (6) next of kin. The laws of intestate succession may also be used when a valid will exists but a gift therein fails to properly identify a beneficiary.

Inventory
A list of all the estate assets that come in the hands of the executor or administrator of the estate. The inventory must be filed with the court within a prescribed period after the fiduciary is appointed.

Inventory and Appraisal
A list of all the assets owned by a conservatee at the time a conservator was appointed and an appraisal of their value on that date. The Inventory and Appraisal must be prepared by the conservator of the estate and filed with the court no later than 90 days after the conservator’s appointment.

IOLTA
Interest On Lawyer’s Trust Account.

IOT
Income Only Trust.

IP
Investment Policy.

IPA
Independent Practice Association.

IPS
Investment Policy Statement.

IR
Inclusion Ratio (Section 2641 of IRC).

IRA
Individual Retirement Annuities.

IRAIT
IRA Inheritance Trust.

IRC
Internal Revenue Code. Contained in U.S. Codes Title 26.

IRD
In Respect of Decedent. Income in Respect of a Decedent. Defined in IRC §691(a)(1).
Income In Respect of a Decedent is the name given to all types of taxable income earned, but not received by the decedent by the time of his or her death. IRD is NOT taxed on the final return of the decedent, instead, it goes on the return of the person or entity receiving the income. Sometimes this is the surviving spouse, sometimes the estate, sometimes some other beneficiary. Often you will have to add the item to the final 1040 of the decedent, and then nominee it off to the correct recipient, because the SSN on the document will be the decedent’s.

IRETA
Interest on Real Estate agent Trust Account. Used in Washington State.

Irrevocable
A trust which cannot be changed or cancelled.

Irrevocable Grantor Trust
Also called an intentional grantor trust or an intentionally defective grantor trust. An irrevocable trust is drafted so that the trust-maker is treated as the owner of the trust for income tax purposes, but not to such an extent that the trust assets are included in the estate of the trust-maker at death. In addition, the assets in the trust appreciate outside of the maker’s estate during the term of the trust.

Irrevocable Life Insurance Trust
ILIT. Sometimes called a wealth replacement trust. A trust which holds life insurance as a principal asset, the death proceeds of which are neither estate-taxed in the estate of the insured nor income-taxed to the beneficiaries of the trust.

Irrevocable Trust
A trust that the maker cannot change or amend after signing it. Irrevocable trusts with demand-right provisions are often used to qualify gifts for the gift tax annual exclusion. Also, if the trust-maker retains no rights in the trust and is not a beneficiary of the trust, the assets of the trust are excluded from the trust-maker’s gross estate for estate tax purposes, thus allowing the trust-maker to lower and, at times, eliminate federal estate taxes.

IRS
Internal Revenue Service.

ISM
In-kind Support and Maintenance.

Issue
All natural (or adopted) children, and all of their direct descendents down through the generations.

ITF
In Trust For.