Within every expert milieu there is a specific jargon that occurs and oftentimes terms that are sort of wordy are lowered down to the initials that represent them.
These acronyms are often then utilized as “words” in their own right, however those who are not acquainted with the field might not acknowledge them. Estate planning is no different in this regard, and below you will find a couple of acronyms that you will inevitably stumble upon when you are checking out the topic.
In the field of estate planning the initials QPRT mean “qualified personal house trust.” These trusts are helpful tools for individuals who require to eliminate the value of their houses from their estates to decrease their estate tax liability. You put your home in the QPRT and name your heir as the recipient of the trust. You can then reside in the home complimentary of rent for a time period that you elucidate in the initial agreement, so absolutely nothing tangible changes in your life but your home is no longer part of your estate for tax purposes.
POD and TOD Accounts
The initials POD mean “pay on death,” and similarly, TOD means “transfer on death. You can open among these accounts at your bank and name a recipient. When you die the possessions become property of your named beneficiary directly and the transaction does not have to go through probate.
For estate planning lawyers the acronym POA represents the legal instrument called a “power of attorney.” When you carry out a power of attorney you are empowering someone to act in your behalf, and this person is described as your attorney-in-fact.
An Individual Retirement Account is an “specific retirement account,” and the typical kinds of IRAs that retirement planning lawyers recommend can consist of conventional IRAs, Roth IRAs, SIMPLE IRAs, SEP IRAs, and self-directed IRAs.