Estate Administration Stages ____________________________________________2
Contact Information ____________________________________________________ 17
Estate Information Record _____________________________________________ 21
Personal Trust Services ________________________________________________ 29
Glossary ________________________________________________________________ 31
This guide provides information regarding Estate Administration and is not intended to provide legal or tax advice. You should consult a lawyer for legal advice or an accountant for tax advice. Every effort has been made to provide current and accurate information; however, changes to Estate Administration are frequent and, therefore, may not be reflected in this guide.
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
3
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Manage Estate
Tax Returns
Final Distribution
Locate Will
1. Check safety deposit box, and/or lawyer, or home files or safe for original copy of Will. If unable to take original, make copy.
2. Review the Will to determine the executor, funeral instructions, special instructions regarding the disposition of the body and any other special directions which require immediate attention.
3. Was the Will prepared by a lawyer? 4. Does the Will have an affidavit of execution attached to it?
5. If intestate or whereabouts of the Will is unknown, advertise with the appropriate legal authorities within your province.
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Funeral
1. Is there a pre-planned funeral or pre-paid funeral? The named executor is authorized to plan the funeral.
2. Confer with the family regarding any directions in the Will.
3. Consider diplomatic discussions with the family to ensure the funeral expenses are not excessive and to have family wishes
accommodated.
4. In most instances, the financial institution that the deceased had their account with will let funeral expenses be paid from that account. Check with them first to confirm their rules and procedures.
5. The executor should ensure that they request a minimum of eight (8) Death Certificates from the funeral home.
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Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Manage Estate
Tax Returns
Final Distribution
Family Conference
1. Review the Will and explain the general steps to be followed in the administration.
2. Discuss the different duties and liabilities of the executor and estate solicitor – explain how their fees are calculated.
3. Complete the personal interview checklist.
4. Obtain details of assets/liabilities as known by the family. The executor may obtain information from financial institutions or from the deceased’s last tax return. 5. Take possession of security certificates, deeds, insurance policies, title documents, any other important papers and other assets for safekeeping if necessary.
6. Determine if the spouse will have sufficient support or if there are any dependant children issues.
7. Determine if there are any Adult Interdependant partners or common law partners.
8. Discuss how the personal assets, eg. jewellery, household furniture, etc., will be divided. Ensure there is a fair and equal system.
9. If executor is out of province or the deceased had assets outside of Alberta, discuss extra administrative expenses, bond requirement and tax issues.
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Inventory Assets & Liabilities
1. Determine which assets and liabilities are in the deceased’s name and will form part of his/her estate.2. Take immediate steps to preserve assets.
– Review insurance on real estate and vehicles and increase if underinsured
– Obtain vacancy permit for vacant real estate and arrange periodic inspection to meet insurance company requirements – Continue operation of any private company, or take other steps as necessary to protect this type of asset
– Transfer any automobiles to the beneficiaries as soon as possible – minimize their use until transfer is completed
– Notify banks, etc. to “freeze” any accounts in the deceased’s name. They will require a copy of the Death Certificate
– Deal with any wasting asset such as perishable goods
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Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Manage Estate
Tax Returns
Final Distribution
Inventory Assets & Liabilities
(cont’d)
3. Make initial contact with non- family members who may provide information on assets.
4. Take inventory of contents of safe deposit box.
5. Notify appropriate government departments (see Contact
Information).
6. Notify anyone who deceased had contact with of his/her death. 7. Cancel subscriptions, club
memberships and re-direct mail. Request refunds where applicable. 8. Notify utility companies of death and cancel when residence is sold or vacated.
9. Write initial letters to banks, trust companies, credit unions regarding estate asset information.
10. Write to insurance companies confirming insurance and annuities and notify company if there is an insurance clause in the will.
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Inventory Assets & Liabilities
(cont’d)
11. Write to stock brokerage, transfer agents and dividend or interest disbursing agents to confirm holdings of bonds, debentures, and shares, and request interest and/or dividend cheques be sent to the executor. Request requirements to effect transfer. Same letter to government departments regarding government bonds.
12. Write letters requesting details re: – securities held for deceased by stock brokerages
– cash and other property held by hospital, nursing home, funeral home, etc.
– interests in other estates or trusts – to mortgagors confirming details of mortgage, including principal balance owing at date of death. Give instructions to forward future payments to executor. Review insurance coverage and ensure the estate is shown as first beneficiary
9
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Manage Estate
Tax Returns
Final Distribution
Inventory Assets & Liabilities
(cont’d)
13. Cancel credit cards and other charge accounts and obtain details of balances at date of death. Contest any claim if appropriate.
14. Obtain details of loans and mortgages from financial institutions and confirm if loan/ mortgage is life insured.
15. Advertise for creditors in newspapers as appropriate.
16. Determine if estate is bound by any lease or other agreement.
17. Contact stock brokers regarding margin account.
18. Make other enquiries as may be required to seek out creditors. 19. Make a working copy of state inventory. Record cost value and market value where appropriate. 20. Include any promissory notes or loans from any of the children in the list of assets.
21. Value assets – record values on working copy
a. real estate by real estate appraiser b. stocks from stock exchange listing or brokerage office (note any declared dividends)
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Inventory Assets & Liabilities
(cont’d)
c. bonds and debenture from
financial page listings or brokerage office listings (include accrued interest in value)
d. household goods and furniture e. insurance paid to the estate where the deceased paid all, or part of the premium
f. commuted value of pensions, annuities, etc.
g. miscellaneous assets such as autos, jewellery, coins, stamps, etc., by a qualified person
h. value mortgages - real estate and chattel - and diarize registration of chattel mortgage
11
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Manage Estate
Tax Returns
Final Distribution
Probate
1. Meet with lawyer to obtain probate. Probate is a judicial process in which a court certifies the Will as being the legal document that deals with the deceased’s assets as listed in the probate document. No executor should proceed without this document as it gives them their authority. Without the probate document, the executor will have difficulty dealing with the estate assets. In order to transfer title and deal with stocks and bonds, probate is mandatory. Most financial
institutions also demand probate before they will allow anyone to access the deceased’s account. 2. Discuss lawyer’s fees and obtain an engagement letter from them.
3. Request several notarial copies of the Grant of Probate to deal with assets.
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Manage Estate
1. Open an estate account at a financial institution.
2. Close out bank accounts (when closing out the bank accounts, it is wise to request that they identify all entries that went through the accounts after the date of death but before closing), collect insurance, promissory notes and any other monies due.
3. Check with accountant regarding final RRSP contribution.
4. Obtain tax advice before liquidating assets.
5. Look after personal effects.
Distribute according to deceased’s wishes. Arrange for estate auction if necessary.
6. Remove assets from safety deposit box, close box and obtain refund if any due.
7. Collect and convert estate assets as required. Keep excess funds fully invested.
8. Pay estate bills.
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Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Manage Estate
Tax Returns
Final Distribution
Manage Estate
(cont’d)10. Make partial distribution to residual beneficiaries and obtain a receipt. Withhold a sufficient reserve against all final liabilities and fees as executor is liable for any shortfall. 11. Set up and manage trusts as per terms of the Will.
12. Maintain accounting records of all estate transactions.
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Tax Returns
1. The following are required to complete the tax returns: – Will
– Copy of Probate – Death Certificate
– Past tax returns (two years if possible)
– Bank account statements
– Information on deferred assets such as RRSP, RRIF, vacation/ business/farm assets, investments – Employment income
– Pension income
– Deductions such as charitable, medical, political, etc.
2. A final return must be filed by April 30th, following the year of death, or six months after the date of death, whichever is later. A final return includes income up to the date of death. Various elective returns can also be filed to report this income in the most advantageous way.
3. A trust return includes income after the date of death and is due 90 days
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Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Manage Estate
Tax Returns
Final Distribution
Tax Returns
(cont’d)4. Ensure income tax and death tax returns are filed in jurisdictions outside of Canada if the deceased was a resident outside of Canada. 5. A clearance certificate should be
obtained from CRA after the above have been completed. This clears the deceased’s representative to distribute the assets of the estate without personal tax liability.
Death
Locate Will
Funeral
Family Conference
Inventory Assets and
Liabilities
Probate
Final Distribution
1. Determine executor’s compensation. 2. Deduct other final costs.
3. Prepare final account and schedule of distribution, including the executor’s compensation to be approved by the beneficiaries. 4. Prepare beneficiary release form. The release states that the
beneficiary(ies) will make no further claims on the estate.
5. Distribute remaining assets after beneficiary(ies) have signed release form and approved executor compensation.
17
Pensions
Human Resources Development Canada
Income Security Programs Main Floor
Canada Place Building #155A, 9700 Jasper Avenue Edmonton, Alberta T5J 4K3 1-800-277-9914
(Old Age Security, Guaranteed Income Supplement, Spouses Allowance, Widowed Spouse Allowance and Canada Pension Plan)
Alberta Widow’s Pension Program (AB Seniors Info Line) 1-800-642-3853 Company/Union Pension Plan Information
_____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________
Health
Probate Forms
Alberta Health Care Insurance Plan Alberta Queen’s Printer
10025 Jasper Avenue Main Floor, Park Plaza
Box 1360 10611 - 98 Avenue
Edmonton, Alberta T5J 2N3 Edmonton, Alberta T5K 2P7
(780) 427-1432 (780) 427-4952
Alberta Blue Cross Plan
10009 - 108 Street
Edmonton, Alberta T5J 3C5 (780) 428-1110
Company/Union Health Plan Information
_____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________
Income Tax
Revenue Canada Taxation
Canada Place 9700 Jasper Avenue
Edmonton, Alberta T5J 4C8 1-800-959-8281
GST Refund Cheques Cancellation
Revenue Canada
66 Stapon Road
Winnipeg, Manitoba R3C 3N3
Other Government Offices
Vital Statistics Health & Welfare Canada
3rd Floor Brownlee Building Room 155, Canada Place 10365-97 Street 9700 Jasper Avenue
Edmonton, Alberta T5J 3W7 Edmonton, Alberta T5J 4C2 (780) 427-7013 1-800-277-9914
Government issued Death Certificates are available from Edmonton Registry Agents. Phone (780) 422-2362 for the agent nearest you. Do not go to Vital Statistics office.
Public Trustee Office Alberta Senior’s Special Needs Assistance
4th Floor Brownlee Building Box 3100
10365-97 Street Edmonton, Alberta T5J 4W3 Edmonton, Alberta T5J 3Z8 (780) 427-7876
19
Social Insurance Registration
P.O. Box 7000
Bathurst, New Brunswick E2A 4T1 1-800-206-7218
Canadian Citizenship and Immigration
1-888-242-2100
Motor Vehicle Registry
(780) 427-7013
Worker’s Compensation Board
1-866-922-9221
Financial Contacts
Credit Union _________________________________________________________________________ Car Insurance _______________________________________________________________________ Home Insurance _____________________________________________________________________ Lawyer _____________________________________________________________________________ Accountant _________________________________________________________________________ Insurance Agent ____________________________________________________________________ Financial Advisor ____________________________________________________________________ Canada Post 1-800-267-1177Canadian Passport Office
1-800-567-6868
Canada Firearms Centre
1-800-731-4000
Land Titles Registry
(780) 427-2742
Alberta Government (Information)
Canada Post
1-800-267-1177
Canadian Passport Office
1-800-567-6868
Canada Firearms Centre
1-800-731-4000
Land Titles Registry
(780) 427-2742
Alberta Government (Information)
310-0000
Other
Utilities/subscriptions ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________21
Date: ___________________________________
Deceased
Deceased’s Name ___________________________________________________________________ Any Alias Name _____________________________________________________________________ Last Residence Address _____________________________________________________________ _____________________________________________________________________________________ Date of Birth _________________________ Place of Birth ______________________________ Date of Death ________________________ Place of Death _____________________________ Habitual Province of Residence ______________________________________________________ The Deceased Died
■
Testate■
IntestateImmediate Family
Spouse’s Name _______________________________ Spouse’s Birth date _________________ Spouse’s Address ____________________________________________________________________ ______________________________________________________________________________________ Child (1)
Name ________________________________________ Birth date __________________________ Address ______________________________________________________________________________ ______________________________________________________________________________________
Child (2)
Name ________________________________________ Birth date __________________________ Address ______________________________________________________________________________ ______________________________________________________________________________________
Child (3)
Name ___________________________________________ Birth date _______________________ Address ______________________________________________________________________________
Child (4)
Name __________________________________________ Birth date ________________________ Address ______________________________________________________________________________ ______________________________________________________________________________________ If more children, attach another sheet if necessary.
Former Spouse?
■
Yes■
NoName ________________________________________________________________________________ Date of Death/Divorce ________________________________________________________________ Matrimonial Property Notice Required?
■
Yes■
NoDeceased Children
■
Yes■
NoName ___________________________________________ Date of Death ___________________ Died Leaving Child/ren
■
Yes■
No23
Codicil
Date of Codicil ______________________________________________________________________ Name of First Witness _______________________________________________________________ Name of Second Witness _____________________________________________________________
Executors
Name _______________________________________________________________________________ Address _____________________________________________________________________________ Telephone ____________________ Cell _________________ Fax _______________________ Status Name in Will/First to Apply ____________________________________________________ Relationship to Deceased ____________________________________________________________ Any Person With An Equal Right to Apply _____________________________________________ Renunciations Required From ________________________________________________________ Name _______________________________________________________________________________ Address _____________________________________________________________________________ Telephone ____________________ Cell _________________ Fax _______________________ Status Name in Will/First to Apply ____________________________________________________ Relationship to Deceased ____________________________________________________________ Any Person With An Equal Right to Apply _____________________________________________ Renunciations Required From ________________________________________________________
Beneficiaries
Name ________________________________________________________________________________ Relationship __________________________________________________________________________ Complete Address ____________________________________________________________________ ______________________________________________________________________________________ Nature of Gift ________________________________________________________________________ Paragraph of Will _____________________________________________________________________ Name ________________________________________________________________________________ Relationship __________________________________________________________________________ Complete Address ____________________________________________________________________ ______________________________________________________________________________________ Nature of Gift ________________________________________________________________________ Paragraph of Will _____________________________________________________________________ Name ________________________________________________________________________________ Relationship __________________________________________________________________________ Complete Address ____________________________________________________________________25
Beneficiaries
(con’t) Name ________________________________________________________________________________ Relationship __________________________________________________________________________ Complete Address ____________________________________________________________________ ______________________________________________________________________________________ Nature of Gift ________________________________________________________________________ Paragraph of Will _____________________________________________________________________ Name ________________________________________________________________________________ Relationship __________________________________________________________________________ Complete Address ____________________________________________________________________ ______________________________________________________________________________________ Nature of Gift ________________________________________________________________________ Paragraph of Will _____________________________________________________________________ Name ________________________________________________________________________________ Relationship __________________________________________________________________________ Complete Address ____________________________________________________________________ ______________________________________________________________________________________ Nature of Gift ________________________________________________________________________ Paragraph of Will _____________________________________________________________________ Any Void Gifts______________________________________________________________________________________ ______________________________________________________________________________________
Inventory
Land & Buildings Value
______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________
Mines & Mineral Interest Value
______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________
Bank Accounts and G.I.C.s Value
______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ Shares Value ______________________________________________________________________________________ ______________________________________________________________________________________
27
Inventory
(con’t) Pensions Value ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ Has Canada Pension Plan been applied for?■
yes■
noWho will apply _______________________________________________________________________ Household Goods, Collections, Jewellery, Personal Effects, Value
Vehicles, Furniture, Recreational Vehicles
______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________
Business Interests Value
______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________
Farming Interests Value
______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________
Inventory
(con’t) Receivables Value ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________Other Property Value
______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________ Liabilities Value ______________________________________________________________________________________ ______________________________________________________________________________________ ______________________________________________________________________________________
Other Information
29
For Your Information... Trustees - these are your responsibilities!
Unlike an Executor, whose responsibilities always arise from a Will, the role of Trustee can result from being named in either a Trust Agreement or a Will.
It is difficult to provide a complete listing of Trustee responsibilities as they are linked to the governing document; however, the following will help Trustees understand what is expected of them:
• review the governing document (i.e. the Trust Agreement or the Will)
• develop and maintain a collaborative relationship with co-trustees, if applicable • administer the trust and exercise discretionary power according to the terms of the
governing document
• collect income and make investments*
• evaluate assets and determine when encroachment on capital and/or income are necessary
• maintain impartiality and balance the interests of the various beneficiaries (i.e. income beneficiaries v. capital beneficiaries)
• protect assets: - Insure property - Safeguard valuables
- Protect business interests, if applicable • account:
- Prepare an initial asset/liability statement - Keep complete and accurate accounting records
- Send asset/liability statements to beneficiaries and, if necessary, to the Public Guardian & Trustee
- Send final report to beneficiaries
• settle any disputes that may arise amongst beneficiaries • initiate or continue legal actions
• file all income tax returns
• obtain CRA Final Clearance Certificate
The responsibilities of a Trustee are many and varied. The more complex a trust‘s holding, the more important it is to have an experienced Trustee who will be able to avoid potentially costly and short-sighted mistakes.
Certain trusts may be in existence for a long period of time, i.e. a trust for very young beneficiaries where the funds will not be released until they have reached adulthood. The long-term, on-going management and administration of such trusts may require significant time commitment, difficult decisions and a heavy administrative load. A trustee may be personally liable for errors or omissions arising from the sale, investment or encroachment of trust property, a failure to file income tax return and/or properly distribute the assets. Even when an agent is hired to handle the administration of the trust on behalf of the trustee, the trustee is still ultimately responsible.
* Trustees should be cognizant of the investment authority granted in the governing document and, if applicable, be familiar with the Trustee Act for the jurisdiction of the trust before developing an investment policy for the trust. Equally important is documenting the rationale behind the strategy and retaining evidence underlying the investment decisions, particularly if the trustee is acting under the “prudent investor rule”. Trustees may be held accountable to the beneficiaries, even years in the future, if the investment strategy they employed was not successful.
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Administration
The care and management of an estate by an executor, and administrator, trustee, or a guardian.
The work performed by a personal representative regarding the collection of assets of a deceased person, settlement of all debts and liabilities, and distribution of the remainder, to those persons beneficially entitled. Similarly, the work performed by trustees, guardians and committees.
Administration Bond
A bond filed with the Court by an administrator or a non-resident executor.
Affidavit of Execution
A statement by a witness to the execution of a legal document. The statement is sworn under oath and states that the witness was present at the time and saw the document executed.
Ancillary Letters Probate
The form of court grant to authorize an executor to deal with an estate located in a jurisdiction other than the jurisdiction in which the Letters Probate was granted to the executor. For example, if an executor received his grant of Letters Probate in the New York State, to deal with real estate located in Ontario, Ontario law would require the executor to obtain an Ontario grant of Ancillary Letters Probate.
Beneficiary
1. The person for whose benefit a trust is created.
2. The person to whom the amount of an insurance policy or annuity is payable. 3. Generally used to mean one who receives any benefit under a Will. (See Trust).
Capital
In a trust or estate context, the fund, or corpus, that is used to yield income.
Charitable Trusts
Trusts which have as their primary object one or more of the following purposes: the relief of poverty; the advancement of education; the advancement of religion; or for other purposes beneficial to the community, not falling under any of the preceding heads. Charitable trusts are not subject to the rule against perpetuities, do not fail for uncertainty, and are exempt from income tax if certain requirements are met.
Codicil
An instrument in writing executed by a testator for adding to, altering, explaining, or confirming a Will previously made by him; executed with the same formalities as a Will; and having the effect of bringing the date of the Will forward to the date of the codicil.
Contingent Interest
A future interest in real or personal property that is dependent upon the occurrence of some future event which is itself not assured. The interest may never come into existence at some future time (distinguish from vested interest).
Corporate Trustee
A trust company serving as trustee.
Court Passing
The submission by the executor, trustee, committee, etc. to the court having jurisdiction, of his estate’s accounts for examination and formal approval by the court of the financial transactions involving estate assets, as well as compensation.
Devise
The gift of Real Estate through the Will.
Encroachment
The term has two meanings. It may refer to the discretionary payment of capital funds to a beneficiary or an unauthorized intrusion of a fixture over another’s land.
Estate
The right, title, or interest which a person has in any property; to be distinguished from the property itself, which is the subject matter of the interest. In a more limited sense
33
Fiduciary
The relationship which exists between two persons where one is legally obliged to exercise rights and obligations for the benefit of the other, eg. a trustee.
An individual or a trust company under a lawful duty to act for the benefit of another party as to matters coming within the scope of the relationship between them. A guardian and his ward, an agent and his principal, an attorney and his client, one partner and another partner, a trustee and a beneficiary, are all examples of fiduciary relationships.
Guardian
An individual appointed by a court to care for the minor person or an incompetent.
Holograph Will
A Will entirely in the handwriting of the testator, signed by him or her with no attesting witness.
Income Beneficiary
The beneficiary of a trust who is entitled to receive income or revenue, eg. a life tenant.
Incompetent
One who is legally incapable of managing his affairs because of mental (not physical) deficiency.
In Specie
In kind; such as ‘distribute in specie’, being to distribute the actual articles or securities.
Insurance Trust
An agreement between an insured and his trustee, whereby insurance policy proceeds are paid directly to the trustee for investment and distribution to designated beneficiaries as directed in the trust agreement. Insurance proceeds paid to a properly established Insurance Trust are not subject to creditors’ claims.
Inter Vivos
The passing of property between living persons, used in such terms as: ‘trust inter vivos’ or ‘inter vivos trust’ or ‘gift inter vivos’.
Intestacy
The state or condition of dying without leaving a valid Will, or having a valid Will which does not effectively dispose of the whole of the estate (the latter being referred to as a ‘partial intestacy’).
Intestate
Not having made and left a valid Will. The term is also used to refer to a person who dies without leaving a valid Will.
Irrevocable Trust
A trust which can not be revoked by the settlor.
Joint Tenancy
The holding of property by two or more persons, each having an equal interest, in such a manner that, upon the death of one joint owner, the survivor or survivors take the entire property. By operation of law in a joint tenancy, four unities must exist: unity of interest, unity of title, unity of time and unity of possession.
Legacy
A disposition of money or personal property by Will, the same as a bequest. A person receiving such a gift is called a legatee. Contrast with ‘devise’. There are three types of legacy: specific, demonstrative, and general.
Letters of Administration
Court grant of authority to administer an estate of a person who did not have a valid will (distinguish from Letters Probate).
35
Life Tenant
One who has a life estate in real property limited in duration to his own life or for another person’s life or for an indefinite period bounded by a lifetime.
Original Investment
The initial amount deposited into the trust.
Passing of Accounts
Submission by an executor of his accounts to the appropriate court for approval.
Personal Effects
Goods of a personal nature, such as clothes and jewellry, which have more or less intimate relation to the owner.
Personal Property
All property other than real property.
Personal Representative
A general term applicable to the person having the right to represent a deceased person, including an executor or administrator.
Power of Attorney
A document, witnessed and acknowledged, authorizing the person named therein to act as an agent for the person signing the document. If the agent (also called the attorney) is authorized to act for his principal in all matters, he has a general power of attorney; if he only has authority over certain specified things, he has a special (or limited) power of attorney. In financial transactions, the power of attorney is usually special. If worded properly, the power of attorney may survive any subsequent mental incapacity of the donor of the power of attorney.
Public Trustee
A government official appointed to supervise the administration of assets due to an unborn, an infant, or, in some cases, an incompetent.
Residue
The estate property which remains after the testator has made provision out of his estate for debts and for specific, demonstrative, and general gifts.
Reversion
The residue interest in an estate left to the grantor or his heirs after the termination of a particular estate. The term may also refer to the estate left to the grantor during the continuance of a particular estate. The reversion remains with the grantor as opposed to the remainder which goes to another.
Revocable Trust
A trust which is by its terms, may be terminated by the settlor or by another person and the property in trust is recalled to the settlor or someone else (contrast — irrevocable trust).
Right of Survivorship
The feature of joint tenancies whereby upon the death of one joint tenant, his interest will pass to the surviving joint tenant(s).
Settlor
A person who creates a trust inter vivos. Also called donor, grantor (compare — testator).
Spendthrift Trust Provision
A trust instrument (or provision in a trust instrument) creating a trust fund for the benefit of one who spends money improvidently, secure against both the beneficiary and his creditors by providing only periodic income to the beneficiary and being capable of voluntary alienation by the beneficiary or his creditors (also known as a protective trust).
Specie
Distribution of assets “in kind” as opposed to converting to cash. See In Specie.
Tenancy in Common
37
Testamentary Trust
A trust established by the terms of a Will.
Testator
A man who makes or has made and left a valid Will at his death (compare to settlor).
Testatrix
A woman who makes or has made and left a valid Will at her death.
Trust
A fiduciary relationship created by someone (called the ‘Settlor’) transferring property to another person (called the ‘Trustee’) as the holder of the legal title to the property (the trust property) subject to an equitable obligation to keep or use the property for the benefit of another (the beneficiary who is called the ‘Cestui Que Trust’).
Trustee
An individual or trust company that holds the legal title to property to administer the asset for the benefit of someone else, who is the beneficial owner.
Trustee Investments
The property in which trust funds are invested in by the trustee; a broad term which includes all kinds of property, not securities alone (contrast between original investment). The term is also used to refer to the restricted type of investments authorized by statute for trustees.
Undue Influence
An improper urgency of persuasion which one person exerts over another person to the point where that other person is prevented from exercising his own free will and is induced to do or forbear from doing an act which he would not do or would do if left to act freely.
Vested Interest
It is a right or title, as to present or future possession of property that is in existence.
Will
A legally enforceable declaration of a person’s wishes regarding matters to be attended to after his death and inoperative until his death. A Will usually, but not always, relates to the testator’s property, is revocable (or amendable by means of a codicil) up to the time of his death, and is applicable to the situation which exists at the time of his death.
If, after reading this booklet, you still have questions and would like to meet our Estate and Trust Officers for further clarification and assistance, please call 496-2000 or toll-free 1-877-496-2151 and ask for our Estate and Trust Department.
