Estate Executors: Do You Know These Estate Definitions?
Estate Executor Definitions
Executor-a person named in a will to handle legal and financial matters. In Ontario also called an estate trustee with a will. May be referred to as a fiduciary or personal representative. (The term executor is used in this guide.)
Fiduciary-a person who holds a position of trust. The law imposes duties on a fiduciary to protect the rights of others. Other terms for this include personal representative, estate trustee and executor.
Final Distribution-a proposal to distribute the estate residue among beneficiaries that is circulated for their approval.
Income Tax-at death, certain property is treated as income for income tax purposes. It is deemed disposed of at fair market value and taxed, even if gifted and no proceeds are received. Assets such as Registered Retirement Savings Plans (RSPs), Registered Income Funds (RIFs), investments and second homes can thus be treated as income.
Interim Distribution-a proposal to distribute part of the estate before the final distribution.
Joint Tenancy-a way to record ownership, e.g., on a deed or bank account. Joint tenants are owners with rights of survivorship.
Limitation Period-sets out the period of time during which legal claims for a cause of action can be raised. After the period expires (for example, six months after the death), a claim can no longer be raised.
Non-probate Assets-some assets or property pass on death to beneficiaries (designated beneficiaries on life insurance, for example) or operation of law (joint ownership). These assets are not governed by the terms of the will or probate.
Notarized Copy-a verified copy signed by a notary, who is usually a lawyer. This confirms that the copy is the same as the original document.
Power of Attorney-a legal document signed and witnessed to appoint an agent, proxy or attorney. Attorneys can be chosen to make decisions when the donor cannot do so. These cease to be valid upon a person’s death.
Probate-a process that proves who shares in and administers an estate. Probate, surrogate, chancery or estate courts have jurisdiction over estates when someone dies with or without a will. Probate is required to transfer the assets of the deceased.
Property-can be real property (real estate) or personal property (cars, cash). Some property passes through probate. Other non-probate property passes as part of a person’s estate on death without the need for probate.
Renounce-declining to act as executor because you choose not to assume the responsibility. This can be because of age, illness, lack of time or inability to act. Renouncing can be done by signing a form, filing it with the court and notifying the people named in the will to act as backup executors in your stead.
Resign-quitting your duties after you have begun to act as an executor, handling assets. You cannot quit or resign unless you have court permission. A replacement executor must be appointed by a court.
Taxes-no definition necessary! Estates are subject to various taxes that an individual didn’t pay while alive. These include provincial, probate and federal income taxes on RSPs, RIFs, business, investments and second homes.
Trustee-person appointed by a will to carry out the trust terms. Trustees are not necessarily executors or estate administrators or guardians. You can, though, give an executor the additional role of a trustee.
Trusts-legal relationships by which executors (or trustees) manage assets for the benefit of trust beneficiaries, such as minors. Can be created by a person’s will as a testamentary trust or during the person’s lifetime as an inter vivos, or living trust.
Will-a legal, testamentary document signed by a person to take effect only on death. Can be amended before death by a written codicil. Named executor(s) manage the estate, pay bills and distribute assets under the will.
All definitions in this post come from the glossary of my ebook, Executor Kung Fu.
Read my free ebook, Ed’s Executor Essentials for more basic information.Posted In: Executors On: March 1st, 2013