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Trusts & Estates Glossary: F
FAILURE OF ISSUE:
Failure, by nonexistence or death, of lineal descendants (children, grandchildren, and on down the line).
FAIR MARKET VALUE:
A price that would induce a Willing seller to sell and a Willing buyer to buy.
FAMILY ALLOWANCE:
The allowance out of the estate of the deceased person provided for by statute and made by the court to provide for the family during the period the estate is in process of settlement.
FEE:
(1) Fixed amount which a trust institution receives as compensation for its services; to be distinguished from allowance, charge, and commission. (2) An estate of inheritance in real property, sometimes referred to as an estate in fee or fee simple estate.
FEE SIMPLE:
An estate of inheritance without limitation to any particular class of heirs and with no restrictions upon alienation; sometimes known as fee simple absolute; the largest interest or estate in real property a person may own.
FIDUCIARY:
An individual or a trust institution charged with the duty of acting for the benefit of another party as to matters coming within the scope of the relationship between them. The relationship between a guardian and his ward, an agent and his principal, an attorney and his client, one partner and another partner, a trustee and a beneficiary, each is an example of fiduciary relationship.
FIDUCIARY RETURN:
An income tax return prepared by a fiduciary on behalf of a trust or estate, as distinguished from an "individual return."
FORMULA CLAUSE:
The provision of a Will or trust agreement stating a formula whereby the executor or trustee can determine the federal estate tax value of property; usually employed in connection with the marital deduction under the Revenue Act of 1954.
FOUNDATION:
A permanent body of property established by contributions from one source (as the Carnegie Foundation) or from many sources (as the Cleveland Foundation) for charitable, educational, religious, or other benevolent uses or purposes.
FREEHOLD ESTATE:
A legal estate in land, commonly referred to as an estate of inheritance. There are three freehold estates: fee simple, fee tail, and life estate.
FRONT-END REVERSION:
A contingent reversion in a grantor retained income trust which permits the grantor’s estate to recover the trust property if the grantor dies within a period commencing at the start of the income term but ending before the specified income period ends.
FULLY REGISTERED:
A term generally applied to bonds which are registered as to principal and income. In this form, a bond is not negotiable and interest is remitted by the disbursing agent to the registered owner.
FUND:
(1) Cash or currency; to be distinguished from other kinds of property. (2) As distinguished from a reserve, an asset or group of assets segregated for some specific purpose.
FUNDED INSURANCE TRUST:
An insurance trust in which, in addition to life insurance policies, cash and securities have been placed in trust to provide sufficient income for the payment of premiums and other charges on or assessments against the insurance policies.
FUTURE ESTATE OR INTEREST:
Any fixed estate or interest, except a reversion, wherein the right of possession and enjoyment is postponed until some future date or until the happening of some event. See also Remainder; Reversion.
