Also called tax basis, cost basis is the original cost of acquiring a property (usually its purchase price plus any commissions or fees), for tax purposes. It is primarily used for computing capital gain or loss from the transfer of property and is described either in terms of the dollar amount spent or the per share price paid to acquire property. For gifts, a beneficiary’s cost basis is the same as that of the original holder who gave the gift.
Counter wills, also called mutual or reciprocal wills, are separate wills between two people that have identical or similar provisions leaving each person’s property to the other or to a third person. The agreement in a compact for mutual wills is that each person will dispose of his or her property in a certain way.
A credit shelter trust (also called an AB trust or a bypass trust) is a technique which allows married couples to avoid estate taxes on transfers of wealth to third parties up to a certain amount.
Creditor’s claim (sometimes referred to as a proof of claim) is a filing with a bankruptcy or probate court to establish a debt owed to that individual or organization. The claim usually gives specific details of the debt, how it came about, and includes evidence of the debt, but the contents will vary based on the jurisdiction and context.
The phrase “cum testamento annexo” is Latin for “with the will annexed.” The phrase is usually used to describe an administrator of an estate. An administrator cum testamento annexo is an administrator of an estate in which there is a will. See administrator with will annexed.
Curtesy is an outdated term that refers to the portion of an estate a husband is entitled to upon the passing of their spouse. If a person passes intestate, the surviving husband would be entitled normally to a life-estate to all of their spouse’s estate only if they had a child together while married.
The cy pres doctrine is used by courts to distribute charitable gifts when the intended beneficiary of the gift is unavailable or the bequest is no longer feasible. The term “cy pres” essentially means “as near as possible.” Rather than invalidate the charitable gift, the court can select a new beneficiary that closely corresponds to the original intent of the donor.
A death beneficiary is the person who is conferred a benefit upon the death of another, usually through a will or trust.
[Last reviewed in September of 2022 by the Wex Definitions Team]
