John Wm Bryant

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Glossary of Terms

Annual Exclusion
The annual gift tax exclusion for 2002 is $11,000. This is the amount of money or property that an individual may give to any other person per year without incurring any gift tax liability. For married couples who properly consent to split gifts, the exclusion is $22,000 per year, per couple.

Basis
The basis in a particular asset or property is generally the cost of the property. It is used to compute the taxable gain on the sale or exchange of property. Basis can be increased by such items as capital improvements or decreased by items such as depreciation. Generally property that is included in a decedent's taxable estate, receives a "step-up" in basis upon the death of the decedent.

Estate Tax
The estate tax is an excise tax levied on the privilege of transferring wealth at death. The estate tax is the obligation of the estate not the beneficiaries of the estate. Because of this, there may be an advantage to making gift during your lifetime, since the person making the gift is responsible for paying any gift tax. The estate tax rate starts at 37% and quickly rises to 50%. The rate is progressive as follows (Remember, the estate tax exemption allows a credit against the estate tax ):

Estate Tax Exemption
The exemption is the amount of property that you may give away during your life or upon your death without having to pay any estate tax. In the year 2002, you are allowed an estate tax credit equal to the tax that would be charged against a transfer of property worth $1,000,000 (assuming that individual is a U.S. citizen). This amount is indexed to increase as follows:

Year	Estate Tax Exemption	Top Estate Tax Rate
2002	$1,000,000	50%
2003	$1,000,000	49%
2004	$1,500,000	48%
2005	$1,500,000	47%
2006	$2,000,000	46%
2007	$2,000,000	45%
2008	$2,000,000	45%
2009	$3,500,000	45%
2010	Estate Tax Repeal	0% on all estates
2011	$1,000,000 returns	50%
2012	$1,000,000	50%

Generation Skipping Transfer Tax (GSTT)
The GSTT is a federal transfer tax assessed on property transferred from one generation to another generation which is more than one generation removed from the person who transferred the property.

Guardian
Another very important function of a Will is to name a Guardian for a minor child. Without a guardian provision in a Will, a relative or friend would likely come forward to be that child's guardian. However there can be disputes if more than one individual seeks the appointment. By appointing a guardian for your minor child, you can clearly express who you think is the best individual or couple to raise you child or children.

Probate
Probate is the court procedure that oversees the transfer of property according to the decedent's will.

Will
A Will is a legal document containing the instructions for the disposition of one's assets after death.