A bankruptcy estate is a separate and distinct taxable entity from the individual debtor, created when an individual debtor files for bankruptcy under Chapter 7 or 11. When an individual files for bankruptcy under these chapters of the bankruptcy code, a separate estate is created consisting of property held by the debtor as of the beginning of the case. Under some circumstances, this estate also consists of property acquired by the debtor and the estate after commencement of the case.

A charitable lead annuity trust is one form of a charitable lead trust. The overarching term “charitable lead trust” refers to an arrangement in which property income or investment income is given to a charity while the grantor is living, but the principal passes to other designated parties upon the grantor’s death.

In a charitable lead annuity trust, the trust pays a fixed percentage of the initial value of its assets to the charity for the charitable term.

A charitable lead unitrust is one form of a charitable lead trust. The overarching term “charitable lead trust” refers to an arrangement in which property income or investment income is given to a charity while the grantor is living, but the principal passes to other designated parties upon the grantor’s death.

In a charitable lead unitrust, the trust pays a percentage of the value of its assets, determined annually, to a charity for the charitable term.

A charitable remainder annuity trust is one form of a charitable remainder trust. The overarching term “charitable remainder trust” refers to an arrangement in which property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living.

In a charitable remainder annuity trust, the trust pays a fixed dollar amount to charity annually.

A charitable remainder unitrust is one form of a charitable remainder trust. The overarching term “charitable remainder trust” refers to an arrangement in which property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living.

In a charitable remainder unitrust, the trust pays a fixed percentage of its value to charity annually.

A conservatorship is a trust created as the result of a legal process in which the court appoints an individual or organization to make financial decisions for another person who is determined to be financially incapable of making those decisions. A person under conservatorship is a conservatee, or protected person.

A custodianship is a trust set up for a minor or incapacitated person.

Escrow is a legal arrangement whereby an asset (often money, but sometimes other property such as art, a deed of title, website, or software source code) is delivered to a third party (called an escrow agent) to be held in trust pending a contingency or the fulfillment of a condition or conditions in a contract. When the set condition or conditions are met, the escrow agent delivers the asset to the proper recipient; otherwise the escrow agent is bound by his or her fiduciary duty to maintain the escrow account.

The Federal National Mortgage Association (FNMA), commonly known as “Fannie Mae,” is a financial services company serving the home mortgage industry. The company offers banks and other mortgage lenders financing, credit guarantees, technology, and services so lenders can make more home loans to more customers. It is a private, shareholder-owned company formed with a charter from Congress that requires it to support the housing finance system.

The Government National Mortgage Association (GNMA), commonly known as “Ginnie Mae,” was created by the federal government as a wholly owned corporation within the U.S. Department of Housing and Urban Development (HUD). Its main purpose is to provide financial assistance to low or moderate income homebuyers by promoting mortgage credit.

GNMA pools channel funds from the securities market into the mortgage market and help increase the supply of credit available for housing. The investors receive a monthly pass-through of principle and interest payments on the pooled mortgages.

A guardian is a person who has the legal authority (and the corresponding duty) to care for the personal and property interests of another person, called a ward. Usually, a person has the status of guardian because the ward is incapable of caring for his or her own interests due to infancy, incapacity, or disability. Generally, the parents of a minor child are the legal guardians of that child and can designate who shall become the child’s legal guardian in the event of their death.

In an irrevocable trust the grantor has no control of the trust (the trust cannot be repealed or annulled) and the trust will pay tax.

A pooled income fund is one form of a charitable remainder trust. The overarching term “charitable remainder trust” refers to an arrangement in which property or money is donated to a charity, but the donor (called the grantor) continues to use the property and/or receive income from it while living.

In a charitable pooled income fund, the donor transfers assets (usually cash) to a trustee, and those assets are commingled and invested in a “pooled” fund with other donors’ gifts. The donor receives a portion of the total income from the fund annually. When the donor dies, his or her remainder interest in the fund is conveyed to the charity.

A qualified funeral trust (QFT) is a grantor trust, where the grantor purchases funeral services prior to death, and the applicable funeral home files one income tax return for all separate trusts. The trust is treated as a non-grantor trust if the following conditions are met:

• The trustee makes an election under IRC section 677(a)(3)
• Each trust is treated separately for tax rates
• The contributions are invested for funeral services of the stated person only.

A receivership is a legal or equitable proceeding in which a receiver is appointed for an insolvent corporation, partnership, or individual to preserve its assets for the benefit of affected parties.

A revocable trust is a trust that may be altered or terminated during the grantor’s lifetime. Since the trust may be altered at any time until the grantor’s death, it is considered part of the grantor’s estate and is subject to taxation. The property is passed on to the beneficiaries only after the grantor’s death, and the revocable trust then becomes irrevocable.

A designated settlement fund or qualified settlement fund is a trust or fund established under IRC Sec 468B. This code section permits a defendant to deposit money or property into a trust or fund and receive a full and complete release of liability.

A trust is a legal entity created under state law and taxed under federal law in which one party holds assets for the benefit of another. A trust is required to file a Form 1041 (U.S. Income Tax Return for Estates and Trusts) to report its income, deductions, gains, and losses.