Glossary of Terms beginning with I

To be held in the same form forever.

By law not transferable.

An individual designated to receive income from a planned gift.

Money due to a decedent that wasn’t paid prior to death. Examples might be: a paycheck from work completed before death, unpaid commissions, interest earned but not paid before death, some account receivables.

Restricting periodic withdrawals from an endowment fund to the dividends and interest earned from the investments. Very seldom used – most charities do not like.

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. As inflation rises, every dollar will buy a smaller percentage of a good. For example, if the inflation rate is 2%, then a $1 pack of breath mints will cost $1.02 in a year.

An inheritance tax is a state tax that you pay when an individual receives money or property from the estate of a deceased person. Unlike the federal estate tax, the beneficiary of the property is responsible for paying the tax, not the estate. Only a few states impose an inheritance tax.

Property with no inherent physical characteristics, such as: royalties, annuity contracts

See also "Living Trust." A trust is an arrangement whereby property is held by a trust company or individual for the benefit of others. An inter vivos trust is set up and becomes effective during the lifetime of the person creating it.

Dying without a will.

Charges incurred for the external or internal management of assets. Our charity does not charge a management fee but we do pass through all charges applicable from our advisors.

An acronym for "Individual Retirement Account", IRA is a type of Qualified Retirement Plan - A retirement plan that qualifies for special tax treatment. Examples include Keoghs, 401(k)s, and 403(b)s. IRAs are similar to qualified retirement plans and are subject to many of the same IRA rules.

"Income in Respective of a Descendent" – Income to which a person is entitled at death that was neither received nor taxed during the person’s life. Examples of IRD include unpaid wages, deferred compensation, accrued interest on bonds, income from exercise of stock options, and qualified retirement plan distributions (including IRA’s). This is a big deal and you should know about it. There are opportunites for giving here and we as gift officers seldom focus on them.

A charitable contribution that the donor cannot take back, in return for which the donor may receive an income tax deduction.

A trust is an arrangement whereby property is held by a trust company or individual for the benefit of others.  An irrevocable trust cannot be revoked or modified once it is established. 

Published monthly by the Internal Revenue Service (IRS), this projected rate of return is used to determine the charitable deduction of all planned gifts except Pooled Income Funds (PIF’s). The lower the rate, the lower the charitable deduction. Also referred to as the AFR.

Everything you want to know about IRS charitable deductions

Children, grandchildren and others directly descending from a common ancestor. An adopted child is not issue, technically speaking.