Weatherby & Associates, PC

Taxable distribution
Distribution of income or principal from a trust to a beneficiary assigned to a generation at least two below that of the grantor, if there remains at least one trust beneficiary assigned to a generation not more than one below that of the grantor.

Taxable termination
Termination of an interest of a trust beneficiary who is assigned to a generation not more than one generation below that of the grantor, if that termination causes the trust to vest in one or more beneficiaries who are assigned to generations at least two below that of the grantor.

Tenancy by the entirety
A type of concurrent ownership between spouses in which each spouse owns an undivided interest in the whole, with a right of survivorship, and which can be terminated only by the consent of both spouses or the termination of the marital relationship.

Tenancy in common
A type of concurrent ownership of property whereby each party owns an undivided fractional interest in the property, with no right of survivorship. The factional interests need not be equal.

Term life insurance
A type of life insurance that provides a death benefit and generally has no cash values.

Three-party gift/leaseback
A gift/leaseback in which the donor gives property to the donee, and then the donor's corporation leases it back from the donee.

Two-party gift/leaseback
A gift/leaseback in which the donor leases the property directly from the donee.

Trusteeship
This is the greatest level of legal delegation of control. Here, the Trustee is provided with the actual legal title of property – for the benefit of another – with the most extensive powers and the most discretion with respect to exercising those powers. Trustees are held to the highest duty of care and loyalty and are required to exercise their powers only in the best interests of the beneficiaries.

Their role is defined and guided by the Trust documents and, if the Trust is silent on an issue, but the extensive Common Law traditions and statutory authority generally will provide direction where the Trust document does not. Trusts attempt to anticipate the future, sometimes for several generations, and must be flexible and not rigid to avoid falling apart – and failing to achieve their original intent – when facing the challenges of the future. Consequently, the need for sound thinking, practical experience, reasoned drafting and the right kind of firm is paramount.