TERMINOLOGY

AUM (Assets Under Management)– AUM is the total market value of assets that an investment company or financial institution manages on behalf of its clients.

Beneficiary – Beneficiary isa person designated as the recipient of funds or other property under a will, trust, insurance policy, etc.

Distribution – Distributionisthe amount paid or credited to the beneficiaries or assignees of the trust or contract.

Endowment Care/Perpetual Care –A portion of the purchase price of your final resting place is contributed to anendowment/perpetual care trust fund. Income from the fund is used to provide regularcareand maintenance at the cemetery. The fund remains in trust in perpetuity.

Escrow– Escrow is a lower levelfiduciary relationship in which a person or institution (escrow agent) holds money or property for another person (grantor).

FDIC–Federal Deposit Insurance Corporation (FDIC) is a U.S. government corporation providing deposit insurance to depositors in member U.S. banks.

Grantor– Grantor isa person who creates the trust – also known as trustor or settlor. This term can be defined by state law for preneed trusts, with rights and responsibilities varying by state.

Income–Income isthe yield earned on an invested dollar (ex: interest, dividends and other ordinary income). In respect to preneed trusts, it is the amount earned on the funds contributed by the purchaser.

Irrevocable trust–An irrevocable trustcan’t be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets into the trust, it is often used interchangeably with earnings, or the amount earned on the funds contributed by the purchaser.

OCC (Office of the Comptroller of Currency)–The OCC charters, regulates, and supervises all national banks and federal savings associations as well as federal branches and agencies of foreign banks. The OCC is an independent bureau of the U.S. Department of the Treasury.

Perpetual care– See Endowment Care.

Planning Agreement–A Planning Agreement is known as the contract; this is the form that is completed and signed to preplan funeral and/or cemetery services. It documents the terms and conditions of the contract between the funeral firm and the purchaser, and contains many of the important legal requirements related to your preneed purchase.

Principal/ Corpus – Principal is the property that is held subject to the terms of the trust. In respect to preneed trusts, it is the amount contributed by the purchaser.

Purchaser – Purchaser is the individual who is paying for the preneed service and establishing a trust. This can be the same person as the Funeral Recipient or it can be a different person. If there are any tax implications related to the contract, they will apply to this individual. The purchaser has the ability to name a beneficiary, change the contract to irrevocable, or cancel the contract, where allowed by law.

QFT (Qualified Funeral Trust) –QFT is a domestic trust that meets all IRS requirements of a qualified funeral trust. Typically referred to as “the trust pays the tax”, and allows the trust funds to bear the burden of any tax implications of investment growth within the trust.

Rate of Return– The Rate of Return on a savings product, is the current annual percentage yield (APY). This varies by funding option and can be determined by contacting your ClearPoint Trust Administrator. The rate of return for mutual funds includes yield and capital gains and/or losses.

Recipient – Recipient is the individual who will receive the funeral/cemetery services upon their passing. This can also be referred to as the beneficiary of the funeral/cemetery plan.

Revocable trust– A Revocable trust is whereby provisions can be altered or canceled during the life of the trust by the grantor.

Seller – The Seller in a preneed funeral or cemetery contract, is typically the individual at the funeral home or cemetery who assists the family in completing the contract and/or making the selections for the preneed service.

Trustee – Trustee is an individual or trust institution that holds legal title to property for the benefit of someone else. Typical duties could include creating any state required reports, preparing tax statements/returns, and reviewing state regulations to keep the trust in compliance.