F

“[T]he price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.” Reg. § 20.2031-1(b).

Manage wealth for the very rich. • “Family offices are privately owned entities established by affluent families to manage their wealth, plan for their families’ financial future, engage in investment opportunities and provide other services to family members. Family offices can be formally structured or operated informally.” Family Office, Day Pitney LLP. • “[M]ultifamily offices are typically only available to families with significant balance sheets—usually $10 million or more.” Thomas J. Frank Jr., Family, Friends Aren’t Always the Best Successor Trustees. Here Are 3 Alternatives., Barron’s, Oct. 16, 2023 (Apple News link).

When someone has saved at least 25 time times their annual expenses (which is the traditional benchmark for financial independence, and spends more than the average American, which is about $61,000 per year, according to Census data. See Tanza Loudenback, What is Fat FIRE vs. Lean FIRE? 2 different ways to retire early, Business Insider, Nov. 12, 2020 (Apple News link). • “The [FIRE] movement even has offshoots, with some focusing on extreme frugality and others on building a large retirement fund or keeping a part-time job. . . . Those who like to spend more–above six figures–are part of Fat FIRE.” Laila Maidan & Kathleen Elkins, FIRE Movement: Early retirees discuss limitation, need to resume working, Business Insider, Sept. 13, 2023 (Apple News link). • See financial independence and FIRE movement; c.f. Barista FIRE and Lean FIRE.

“FDIC-insured sweep programs are offered by brokerage firms. These programs ‘sweep’ client cash into FDIC-insured bank accounts. In some cases, clients’ deposits are fanned out across multiple banks to provide higher levels of FDIC protection. Like bank accounts, yield can vary across programs, with some programs offering highly competitive yields.” Adam Grealish, Five Places to Put Cash Rather Than in the Bank, Kiplinger, May 1, 2023 (Apple News link).

In feudalism, a vassal’s sworn loyalty and allegiance to a lord. • Fealty was an incident of tenure.

See volatility index.

In feudal times land granted in return for military service. Also called a “fief.”

Advisers who “have limited their role strictly to that of fiduciary by virtue of compensation that forgoes commissions for selling financial products.” Alisa Wolfson, Fiduciary vs. financial adviser: What’s the difference?, MarketWatch, June 26, 2023.

The social structure of medieval Europe. It was pyramidal with the king at the top and peasants who tilled the soil at the bottom; everyone in between was both a lord over someone and a tenant under someone. The basis of rights and duties was typically status, not contract.

“The term ‘fiduciary’ means ‘any person who occupies a position of peculiar confidence towards another.’” Sarah Patel Pacheco, Fiduciary Litigation: Avoiding (or Minimizing) the Traps, Tribulations, and Trials, 5 Est. Plan. & Cmty. Prop. L.J. 95 (2012), citing Montague v. Brassell, 443 S.W.2d 703, 713 (Tex. Civ. App.-Beaumont 1969, writ ref’d n.r.e.) (quoting Cartwright v. Minton, 318 S.W.3d 449, 453 (Tex. Civ. App.-Eastland 1958, writ ref’d n.r.e.). See executor, trustee.

Notes on the definition of “fiduciary” in New York:

(1) NY EPTL 1-2.7 defines a fiduciary as “[a] person who meets the description, in this part, of a ‘personal representative’ or who is designated by the creator or by the court to act as an assignee for the benefit of creditors, or a committee, conservator, curator, custodian, guardian, trustee or donee of a power during minority.” • NY EPTL 1-2.13 defines a personal representative as “a person who has received letters to administer the estate of a decedent. The term does not include an assignee for the benefit of creditors, or a committee, conservator, curator, custodian, guardian, trustee or donee of a power during minority.”

(2) Section (a) of NY EPTL 11-1.1 (“Fiduciaries’ powers”) defines the term “fiduciary” for the purposes of the section to mean, “administrators, executors, administrators d.b.n., administrators c.t.a.d.b.n., administrators c.t.a., ancillary executors, ancillary administrators c.t.a and trustees of express trusts, including a corporate as a well as a natural person acting as fiduciary, and a successor or substitute fiduciary, whether designated in a trust instrument of otherwise.”

(3) Section (3) of NY EPTL 11-A-1.2 (“Definitions) defines a “fiduciary” as “a personal representative or trustee. The term includes an executor, administrator, successor personal representative, and a person performing substantially the same function.”

(4) NY SCPA 103(21) defines a fiduciary as any of the following: (1) An administrator[*], (2) administrator c.t.a.[*], (3) administrator d.b.n.[*], (4) ancillary administrator[*], (5) ancillary administrator c.t.a.[*], (6) ancillary executor[*], (7) ancillary guardian[*], (8) executor[*], (9) guardian[*], (10) preliminary executor[*], (11) temporary administrator[*], (12) testamentary trustee [*], (13) the donee of a power during minority, (14) a voluntary administrator, (15) a public administrator acting as administrator, (16) a public administrator[*], (17) a county treasurer[*], and (18) a lifetime trustee. In this list, “[*]” signals two things: (1) NY SCPA 103(21) requires letters to be issued to that person before they are considered a “fiduciary.” (2) That person is also an “executor” under NY SCPA 103(20), which defines “executor” as “[a]ny person to whom letters testamentary have been issued.”

(5) Section 3 of NY SCPA 1306 (“Powers”) deems a voluntary administrator a fiduciary, but with limited powers:

For the purposes of this article, a voluntary administrator shall be deemed to be a fiduciary of the estate until another fiduciary is appointed, and except as herein provided, the voluntary administrator shall have the rights, powers and duties with respect to personal property of an administrator duly appointed for the estate. The voluntary shall have no power to enforce a claim for the wrongful death of or a claim for personal injury to the decedent.

Upon the appointment and qualification of another fiduciary of the estate, the powers of the voluntary administrator shall cease.

(6) GOL § 5-1501(2)(a) states, in relevant part, “An agent acting under a power of attorney has a fiduciary relationship with the principal.” • GOL § 5-1505(2)(a), states, in relevant part, “An agent acting under a power of attorney has a fiduciary relationship with the principal.”

 

For a trust: Fiduciary accounting is the process of reporting and distributing the income and principal of the trust to the beneficiaries according to the terms of the trust document. Fiduciary accounting follows the rules and principles of the Uniform Principal and Income Act (UPIA) or the local trust law that governs the trust. Fiduciary accounting is mainly concerned with fulfilling the fiduciary duties of the trustee and ensuring that the trust assets are properly managed and distributed according to the trust document. C.f. tax accounting.

Duties that the law places on fiduciaries to compel them to act in the best interests of beneficiaries. • “[T]he beneficiary, not the trustee, bears the risk and receives the rewards of the trustee’s bad or good management. If the trust property is invested wisely and produces handsome returns, the beneficiary, not the trustee, reaps most of the gains. If the trust property is invested poorly or is stolen by the trustee or others, the beneficiary, not the trustee, suffers the immediate consequences of the depletion in the trust fund. Putting aside reputational concerns and feelings of moral obligation (which is not to say that these considerations are unimportant), the problem is that trustee lacks a direct financial incentive to act with loyalty and care in managing the trust fund. The primary doctrinal answer to this problem . . . is the fiduciary obligation. The fiduciary obligation in trust law comprises duties of loyalty, prudence, and a host of subsidiary rules that reinforce the dudes of loyalty and prudence.” Jesse Dukeminier et. al., Wills, Trusts, and Estates 771 (7th ed. 2005). • “Empowering the trustee to transact freely in the financial markets has shifted the locus of protection for beneficiaries from powers law to fiduciary law. Whereas disempowerment [under old rules] prevented the trustee from acting, modern trustees’ powers law confers vast managerial discretion. Discretion entails the risk of harm as well as the opportunity to enhance the trust assets. To safeguard beneficiaries against abuse of this discretion, trust fiduciary law has developed as the functional replacement for the former scheme of trustee disability. Fiduciary law imposes two broad standards, loyalty and care, that regulate the exercise of the discretion that modern trustees’ powers law bestows. . . . Trust fiduciary law regulates the trustee’s exercise of discretion. Be it in trust law or in other fields of fiduciary obligation (for example, corporations, agency, or partnership), fiduciary duties are default norms imposed in juridical relations that feature ‘scope for the exercise of discretion.’ Fiduciary duties mean to ‘induce the fiduciary to use his power beneficently.’” John H. Langbein, The Contractarian Basis of the Law of Trusts, 105 Yale L.J. 625 (1995).

Writ of execution directing a marshal or sheriff to seize and sell a debtor’s property to satisfy a money judgment. • For example, Sands v. Codwise, 5 Johns. 536 (NY Court for Correction of Errors 1808), states (emphasis added), “When he stopped payment . . . judgment was entered up against him . . . . A fieri facias was soon after issued on the said judgment, which was levied on the household furniture, and other personal property of Comfort Sands, and on his dwelling-house in Pine Street, and another dwelling-house in Cedar Street. In November, 1798, the sheriff sold the personal property taken on the execution, at public auction, to the appellant . . . .”

A state of intellectual isolation resulting from personalized searches and algorithmic curation, where users are exposed primarily to information that aligns with their existing beliefs.

Last; not necessarily free from error. • “There is no doubt that if there were a super-Supreme Court, a substantial proportion of our reversals of state courts would also be reversed. We are not final because we are infallible, but we are infallible only because we are final.” Brown v. Allen, 344 U.S. 443, 540 (1953) (Jackson, J., concurring).

See burial insurance.

A final decision or order of a court that resolves a dispute and determines the obligations of the parties. C.f. order.

“[A] broad title that applies to several occupations that provide financial advising either by offering help with retirement, investments and budgeting or managing finances including taxes, estate planning, debt management and more. Financial advisers create and implement strategies to manage and balance portfolios.” Alisa Wolfson, Fiduciary vs. financial adviser: What’s the difference?, MarketWatch, June 26, 2023.

Someone who teaches clients about financial planning but who does not give specific investment advice.

“[A] general term that can by used by anyone . . . who does financial planning, investment managment or financial coaching . . . .” Alisa Wolfson, Fiduciary vs. financial adviser: What’s the difference?, MarketWatch, June 26, 2023.

“Any situation where a senior person is being financially victimized can be classified as financial elder abuse, said Jaime Levine, executive director of Elder Law and Advocacy, a San Diego nonprofit law firm.” Carolyn Said, What Dianne Feinstein’s Family feud can teach about the warning signs of elder financial abuse, San Francisco Chronicle, Aug. 17, 2023 (Apple News link).

Having at least 25 times annual expenses saved. See Tanza Loudenback, What is Fat FIRE vs. Lean FIRE? 2 different ways to retire early, Business Insider, Nov. 12, 2020 (Apple News link).

“[A]ny type of strategizing around the financial aspects of your financial life. These areas range from the basics such as budgeting to more complex areas such as saving and investing for retirement as well as estate planning for the distribution of your assets. In short, if it involves finances, then there’s a way to plan for it and optimize the outcome.” James Royal, What is financial planning? Learn how to get started, Bankrate, June 27, 2023 (reviewing financial planning issues: budgeting, debt reduction, retirement planning, wealth management, tax planning, insurance planning, and estate planning).

“FIRE” stands for “financial independence/retire early.” “The formula is simple: A person needs to save up and invest 25 times their annual spending in order to become financially independence, assuming they plan to withdraw 4% of their nest egg each year thereafter.” Tanza Loudenback, What is Fat FIRE vs. Lean FIRE? 2 different ways to retire early, Business Insider, Nov. 12, 2020 (Apple News link). “At that point, they no longer need to rely on a regular paycheck, to afford their lifestyle and they have the freedom to retire early.” • “The FIRE movement’s origins can be traced tot he 1992 book ‘Your Money or Your life,’ coauthored by a duo who had themselves achieved financial independence before their forties, and which is considered a bible for how to do the same.” Laila Maidan & Kathleen Elkins, FIRE Movement: Early retirees discuss limitation, need to resume working, Business Insider, Sept. 13, 2023 (Apple News link). • There are three main categories of FIRE: traditional FIRE (which is defined here), Lean FIRE, and Fat FIRE; but there are now additional categories, including Coast FIRE. Id. • See financial independence.

Risk “factors that touch the fortunes only of the individual firm.” John H. Langbein, The Uniform Prudent Investor Act and the Future of Trust Investing, 81 Iowa L. Rev. 641, 647 (1996). C.f. industry risk and market risk.

“[S]ecurities purchased earlier that likely have the most capital gains are sold. Normally, this would result in higher capital gains, but . . . that in a year where you have no additional income, selling assets with the highest profits could be advantageous. If your brokerage account allows you to sell by lots, you can select which shares to sell based on the capital gains they have accumulated . . . .” Laila Maidan, How to pay 0% capital gains tax on up to $123,250 of income, Business Insider, June 22, 2024 (Apple News link). C.f. last-in, first-out (LIFO) method.

A tax that imposes the same tax rate on all taxpayers, regardless of whether the taxpayers are lower-income or higher-income. C.f. progressive tax, regressive tax.

“Flood zones are land areas identified by the Federal Emergency Management Agency (FEMA) on Flood Insurance Rate Maps (FIRMs). Each flood zone describes a land area in terms of its risk of flooding. FEMA’s FIRMs are created through an extensive mapping process and take into account many factors, including the types and strength of storms that historically have affected the area and the onshore and offshore topography. . . . FEMA flood zones are used to determine flood insurance rates as well as flood resistant construction requirements.” Climate Resiliency Initiatives - Frequently Asked Questions, NYC Department of City Planning.

See typeface.

 A federal income tax form for employers that pay employees and withhold federal and FICA (social security and Medicare) taxation. See About Form 941, Employer’s Quarterly Federal Tax Return, IRS.

For a joint tenancy, as described by Blackstone: “the unity of interest, the unity of title, the unity of time and the unity of possession; or in other words, joint tenants have one and the same interest, accruing by one and the same conveyance, commencing at one and the same time, and held by one and the same possession.” 2 Bl.Comm. 180, qtd in Cornelius J. Moynihan & Sheldon F. Kurtz, Introduction to the Law of Real Property 290 (7th ed. 2020) (explaining, “The requirement of unity of possession does not mean actual possession. There may be a joint tenancy in a future interest, such as a remainder. A unity of right to possession is sufficient.”).

In feudalism, a tenure that arose from a gift of lands to a church or religious official (not a lay person), in return for religious (not secular) services, such as saying prayers. •“Frankalmoin” means “free alms.”

In feudalism, tenure where the services were definite and certain and were worthy of a free man; the services were not dependent on the lord as to amount or quantity. • Free tenure had four main divisions: (1) Tenure by knight service, (2) serjeanty, (3) frankalmoin, and (4) free and common socage. • Free tenants were protected by the king’s courts (not just the lord’s court) and had the benefit of real actions. • C.f. unfree tenure.

In feudal times a man who was free and might hold land but who owed some services to his lord. C.f. slave.

See burial insurance.

An estate in land to which the holder is or may be entitled to possession in the future. • The federal gift tax regulations define a future interest as any interest in property “limited to commence in use, possession, or enjoyment at some future date or time.” Reg. § 25.2503–3(a). • C.f. present interest. See reversion.