B

B Trust

Deceased’s portion of an A-B Trust.  It is also called a By-Pass Trust or Credit Shelter Trust.

BAF

Broad Art Foundation.

BAR

Bureau of Automotive Repair.

Bargain Sale

A sale in which the property owner sells the property to a qualified charity for less than the fair market value.  The difference between the fair market value and the sale price is the “bargain” and is considered a gift to the charity.

Basic Hospital Expense

Coverage divided into two parts. One part covers cost of room and board; the second covers miscellaneous expenses such as X-rays, lab fees, dressings, use of operating room, etc.

Basic Medical Expense

Coverage for the cost of physicians exclusive of surgery.

Basic Surgical

Coverage for the costs of physicians for surgical procedures, including costs of anesthesiologist and post-operative care.

Basis

Generally, the cost of a property.  Basis  can be increased by capital improvements or decreased by depreciation.  Basis is used to compute taxable gain on the sale, exchange, or other disposition.

BATFE

Bureau of Alcohol, Tobacco, Firearms and Explosives.

BBB

Better Business Bureau.

BCBS

Blue Cross Blue Shield.

BCP

Bank Check Plan.  Means of paying insurance premiums.

BCRA

Better Care Reconciliation Act of 2017.

BDGT

Beneficiary Defective Grantor Trust.

BDIT

Beneficiary Defective Inheritor’s Trust.

Beneficial Interest

Is the entitlement of a trust beneficiary.

Beneficiary

A person or entity receiving benefits under a legal document.

Bequeath

Legal term used to leave a beneficiary personal property in the will.

Bequest

Personal property left in a will.  See Legacy.

BERT

Buildup Equity Retirement Trust.

BIC

Benefits Identification Card(s).

Binders

Also known as covering notes, binders provide temporary insurance, pending the issuance of an insurance contract.  They expire when the insurance policy is issued.  The policy must issue within 90 days, but an extension of an additional 60 days is permitted.  Therefore a binder can only be valid for a maximum of 150 days.

BK

BanKruptcy.

BLAG

Bipartisan Legal Advisory Group of the U.S. House of Representatives.

Blanket Policy

Is an insurance policy designed to cover members of a certain group taking part in a specific shared activity.  The difference between a blanket policy and a group policy is that, under a blanket policy, the individuals are automatically covered and do not receive a certificate of insurance, nor are they identified by name or social security number.  It is used for groups whose members change frequently.

Blended Family

Family with children not all sharing the same parents.

Blue Cross & Blue Shield Association

The “Blues” are a service provider organization that offer a type of association of independent providers that licenses individual and group plans to offer health benefits under the Blues brand.  Blues associations are franchises scattered throughout the nation and are both for-profit and nonprofit health care organizations providing prepaid health benefits.  Members are called subscribers and pay a monthly fee, and Blues offer individual and group plans.

Blending Exercise

Of a power of appointment commingles the power-holder’s own assets with the appointive assets.

Blockbuster Will

Is a concept not yet accepted that a will should be able to make changes to the disposition of non-probate property, such as to change the beneficiary of life insurance.

Blocked Account

A special kind of bank account often set up in a conservatorship.  A withdrawal can’t be made from a blocked account

unless a court has authorized it. Judges sometimes require a conservator to establish blocked accounts to hold all or part

of a conservatee’s cash assets. A conservator may also, with the permission of the court, elect to set up a blocked account.  This is often done to reduce the size and cost of a bond, as money in a blocked account is not counted in setting the amount of the bond.

BMG

Browning Machine Gun.

BOE

Business Overhead Expense.  Board of Equalization.

BOFD

Breach of Fiduciary Duty.

Bona Fides

Good faith.

Bond

Document guaranteeing that a certain amount of money will be paid to a beneficiary in the event a fiduciary does not carry out his/her/its legal duties or ethical responsibilities.

Broker, Insurance

Not appointed by an insurance company, a broker represents the buyer of insurance.  Brokers may charge their clients, the insured, a broker fee.

BSA

Buy-Sell Agreement.

Bus & P C

Business & Professions Code.

Business Succession Plan

The succession plan details the steps for implementing the business owner’s chosen exit strategy allowing the smooth transfer of control and ownership of the business in the event of death, disability, or retirement of the owner.

Buy-Sell Agreement

A buy–sell agreement, also known as a buyout agreement, is a binding agreement between co-owners of a business that governs what happens if a co-owner dies or is otherwise forced to leave the business, or chooses to leave the business.[1] It may be thought of as a sort of premarital agreement between business partners/shareholders or is sometimes called a “business will”. An insured buy–sell agreement, (triggered buyout is funded with life insurance on the participating owner’s lives) is often recommended by business succession specialists and financial planners to ensure the buy–sell arrangement is well-funded and to guarantee there will be money when the buy–sell event is triggered.[2]

A buy–sell agreement consists of several legally binding clauses in a business partnership or operating agreement or a separate, freestanding agreement, and controls the following business decisions:

  • Who can buy a departing partner’s or shareholder’s share of the business (this may include outsiders or be limited to other partners/shareholders);
  • What events will trigger a buyout, (the most common events that trigger a buyout are: death, disability, retirement, or an owner leaving the company) and;
  • What price will be paid for a partner’s or shareholder’s interest in the partnership and so on.

Buy-sell agreement can be in the form of a cross-purchase plan or a repurchase (entity or stock-redemption) plan. For greater neutrality and effectiveness of the buy–sell arrangement, the service of a corporate trustee is recommended.

By-Pass Trust

The B trust of an A-B Trust arrangement, which holds all or part of the deceased spouse’s estate during the lifetime of the surviving spouse.  Trust created for the benefit of the spouse of the settlor or trustor.  The assets in the bypass trust are excluded from the taxable or probate estate of the spouse.  The trust typically provides that the surviving spouse is entitled to all of the income for life and may empower the surviving spouse to appoint the property to others.  Also known as a family trust.