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Trusts & Estates Glossary: A

ABATEMENT:
The reduction of a gift under will because of insufficiency of assets to satisfy all the gifts after the legal obligations of the estate (debts, taxes, charges, and claims) have been paid in full. The general rule is that all gifts of the same class shall abate proportionately, unless otherwise provided.

ABSOLUTE GIFT:
A gift of property by Will which carries with it possession of and complete dominion over the property; opposed to a conditional gift.

ACCELERATED REMAINDER:
The property which passes to the remainderman through the failure of the income or preceding beneficiary.

ACCELERATION:
The advancement of the interest where a trust is created for one beneficiary for life or for a term of years and for another in remainder, and the trust fails as to the interest for life or the term.

ACCOUNTING:
(1) The record of an account showing the transactions therein. (2) The submission of such a record to the court or to the beneficiaries of a trust or estate by the fiduciary.

ACCRETION:
The increase or extension of the boundaries, or the acquisition of land by the gradual or imperceptible action of natural forces as by the washing up of sand or soil from the sea or a river, or by a gradual recession of the water from the usual watermark.

ACCRUE:
As applied to a right, to come into existence as an enforceable claim, as, a cause of action has accrued when the right to sue has become vested and exercisable.

AMENDMENT:
An addition, deletion, or change in a legal document.

ANNUITANT:
The beneficiary of an annuity.

ANNUITY:
The amount payable according to contract annually or at other regular intervals for either a certain or an indefinite period, as for a stated number of years or for life.

ANTE-NUPTIAL AGREEMENT:
An agreement with respect to their property made before a marriage by the parties to the marriage.

APPLICABLE FEDERAL RATE:
The statutory interest rate that must be charged for most loans and installment agreements to avoid imputation of income under the Internal Revenue Code. The Treasury Department determines three applicable federal rates monthly based on the current market yields on outstanding obligations of the federal government having similar maturities. The federal short-term rate is applicable to transactions having terms of three years or less, the Federal mid-term rate is applicable to transactions having terms of three to nine years, and the federal long-term rate is to be used for transactions having terms in excess of nine years.

ATTRIBUTION:
For purposes of the Internal Revenue Code sections dealing with stock redemptions and stock ownership, attribution refers to particular situations in which one family member (or a trust or estate) is deemed to own stock held by another family member (or trust or estate). The attribution of ownership between family members or trusts or estates may have adverse consequences in a stock redemption and such relationships need to be examined carefully.

AUTHENTICATED COPY:
A copy of an instrument on which is an attestation in the manner required by law by an official authorized to make such certification, as by the certification and seal of a specified public official.

AUTHENTICATION:
Applied to bonds, the signing by the trustee of a certificate on a bond for the purpose of identifying it as being issued under a certain indenture, thus validating the bond.

AUTHORIZED INVESTMENT:
An investment that is authorized by the trust instrument; to be distinguished from legal investment.