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A-B-C-D-E-F-G-H-I-JK-L-M-N-O-P-Q-R-S-T-U-V-W-XYZ

Specialized Glossaries:


Mortgage / Real Estate
Life Insurance
Estate Planning

Retirement / RSP / RIF
Mutual Funds
Credit / Financing

Abbreviations / Acronyms

Special Glossary of Estate Planning Terms

The purpose of a glossary is to provide brief definitions, while not necessarily legally accurate, are tailored to suit the meaning(s) given to the special terms you may come across in dealing with retirement matters. Additional meanings for the terms may be found in a dictionary.

Administrator:

An individual or trust company appointed by a proper court to administer the estate of a person who has died without leaving a valid will. If a woman is appointed, she is known as an administratrix.

Agent for the Executor:

An individual or trust company is retained by the executor and provides administrative services and advice.

Alternative appointment:

If the first executor is unwilling or unable to act, then the alternative is contacted to perform the duty.

Asset:

Something that is owned - a physical asset, such as a car or a house, or a financial asset, such as cash or a Savings Account, Guaranteed Investment Certificate, Stocks, Bonds, RRSPs , business interests, insurance polices etc.

Attribution Rule: Any taxable income or gain realized on an asset will be attributed back to the person who made the investment, regardless of who holds title to the asset.

Beneficiary:

One who is to receive the benefits of any type of contract.

Bequest:

A disposition of personal property by will.

Capital Gain:

A type of profit derived by selling an asset at a higher price than that at which it was purchased. One-half of the amount is taxable as income when received.

Capital Loss:

The loss that results when a capital asset is sold for less than its purchase price.

Cash Flow:

Net income for a stated period, plus any depreciation and amortization or other non-cash deductions.

Certificate of Appointment:

A document issued to an executor by the court, that confirms the executor's authority to administer a particular estate. This document is also know as Letters Probate or Grant of Probate.

Codicil:

An instrument in writing executed by a testator for adding to, altering, explaining or confirming a will previously made by the testator; executed with the same formalities as a will; and having the effect of bringing the date of the will forward to the date of codicil.

Commute Value:

The commuted value of a benefit refers to how much a benefit is worth today. Commuted values express the lump sum value of some sort of promised benefit, usually from a defined benefit pension plan. The commuted value takes into account the benefits, interest and mortality (if any).

Contingency: Making arrangement's for a unknown situation, may be positive or negative E.g. Contingency fund - Moines set aside as insurance for a possible future problem that can be solved with a cash payment.

Custodian/Guardian:

A person legally responsible for overseeing the care and affairs of a minor or an incompetent person. Another term used in this situation is Guardian.

Deemed Disposition:



Is when CCRA deems that you have disposed of all your assets on your death and that any capital gains would be then deemed realized and tax would therefore be due.

Donee:

A person or entity receiving a Gift (from a donor)or in relation to a power of attorney, the party whom Authority has been granted.

Donor:

A person or entity making a Gift (to the donee) or in relation to a power of attorney, the party whom authority has been granted.

Estate:

All assets owned by an individual at the time of death. The estate includes all funds, personal effects, interest in business enterprises, titles to property, real estate and chattels, and evidence of ownership, such as stocks bonds and mortgages owned, and notes receivable.

Estate Planning:

The orderly arrangement of one's financial affairs to maximize the value transferred at death to the people and institutions favored by the deceased, with minimum loss of value because of taxes and forced liquidation of assets.

   
Estate Freeze:

A legal procedure that limits the growth in value of the freezor's estate. This is done by diverting the growth to the subsequent generation.
   
Executor/Executrix: The person named in a will to manage the estate of the deceased according to the terms of the will. Without a Will the function is performed by and administrator.

Family Trust:

An inter vivos trust established with family members as beneficiaries:

Face Value:

The stated nominal value of a security, so called because it is usually the value printed on the face of the legal certificate.

Fair Market Value:

The price a willing buyer would pay a willing seller if neither was under any compulsion to buy or sell. The standard at which property is valued for deemed disposition.

Fiduciary:

An individual or institution occupying a position of trust. An executor, administrator or trustee, hence, "fiduciary" duties.

Guaranteed Term:

The length of time for which annuity payments are guaranteed. If the annuitant dies before the specified term, payments to the beneficiary will continue until the term ends. (Life Insurance)

Heir:

A person legally entitled to receive property from a deceased through inheritance.

Holograph will:

A last will and testament written completely in the persons own handwriting, signed at the end by the person writing the Will. Witnesses are not required for it to be considered legal.

Illiquid:

The description of a security for which it is difficult to find a buyer or seller.

Illiquid Investment:

An illiquid investment is any investment that may be difficult to sell quickly at a price close to its market value. Examples include Stock in private unlisted companies, commercial real estate and limited partnerships.

Inclusion Rate:

The rate (shown as a percentage) used to determine "taxable capital gains" and "net capital losses" If you have losses, you can use them to reduce gains in preceding years or in any future years.

Income Attribution:

Is the process specified under the Income Tax Act where certain investment income may be deemed taxable to a person other than the recipient, if the investment income was the result of certain transaction between family members.

Income Averaging Annuity:

A special type of annuity to spread the impact of income tax on certain types of taxable lump sum receipts.

Income Splitting:

The process of diverting taxable income from an individual in a high tax bracket to one in a lower tax bracket.

Inter Vivos:

From the Latin for "between living persons," usually refers to a trust established during the lifetime of the person setting up the trust (the "settlor"), as opposed to a "testamentary" trust in a will which takes effect only at death.

Inter Vivos Trust:

A trust created while the person making the trust is still alive.

Intestacy Laws:

The provincial laws governing distribution of the assets of a person who dies without a will.

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.

Issue (estate): All those who are descended from common ancestors. The first generation are normally referred to as children.

Joint and Last Survivor:

1) A type of annuity that pays benefits until both annuitant and the annuitant's spouse die.

2) The Banking industry will register a Guaranteed Investment Certificate with the same type of effect, the certificate is with the words "JTWRS" (Joint Tenants With Rights to Survivor) allows the full ownership the be transferred to the other registered person named on the note.

Joint Tenants with Right of Survivorship:

A type of account registration on a GIC, term deposit or joint bank account. On the death of one account holder, ownership of the account assets is transferred to the remaining holder or holders.

Letters of Administration:

A certificate confirming the authority set out in the will to administer a particular estate, issued to an administrator by the proper court.

Letters Probate:

A certificate of authority to administer a particular estate, issued to an executor by a proper court.

Liabilities:

What is owed by the deceased or the estate.

Life Annuity:

An annuity under which payments are guaranteed for the life of the annuitant.

Life Annuity (With a Guaranteed Term):

An annuity with a special clause that guarantees payments will continue for a specified period, even if the annuitant dies before the end of the term.

Living Will:

If you become incapacitated this document will preserves your wishes and act as your voice in medical decisions, if you are unable to speak for yourself as a result of medical reasons.

Mandate: A term used in Quebec that describes the function of a Power of attorney

Personal Net Worth:

Total assets minus total liabilities of an individual.

Personal Representative:

A general term applicable to a person, including an administrator or executor, having the legal right to represent a person including a deceased person.

Power of Attorney:

A legal document that gives signing authority for your affairs to a spouse or other trusted person over property and personal care issues.

Power of Attorney - Personal Care:

A legal document that gives signing authority for your personal care and health issues only to a spouse or other trusted person in case of accidental or other circumstances that leave your own unable to manage your own affairs.

Power of Attorney for property:

A legal document that gives signing authority for your affairs to a spouse or other trusted person in case of accidental or other circumstances that leave your own unable to manage your own affairs. This type of power of attorney applies to personal, financial and business transactions. If "enduring", the donee may continue to exercise authority during the subsequent incapacity of the bonor.

Probate:

The process used to make an orderly distribution and transfer of property from the deceased to a group of beneficiaries. The probate process is characterized by court supervision of property transfer, filling of claims against the estate by creditors and publication of a last will and testament.

Right of Survivorship: The right to succeed to the ownership or part ownership of property as the result of the death of an owner or part owner.

Settlor:

The person establishing and transferring assets to a trust, also known as the grantor.

Succession Duties:

A direct tax levied by some provinces (Quebec, Ontario, Manitoba and Saskatchewan) on value transferred at death on those who receive the property.

Succession Duty Releases:

Permission granted by a provincial succession duty department to transfer or dispose of assets before a full accounting has been made to the department for purposes of determining duty payable.

Succession Planning:

For a business is planning for the next generation of owner/managers to succeed the current owner/manager.

Spousal RRSP:

An RRSP where one spouse makes the contributions and claims the tax deductions, but where title to the plan proceeds is in the name of the other spouse.

Unused RRSP- Carried Forward:

If a taxpayer has not contributed the maximum allowable RRSP contribution during a year the excess (carry forward room) amount can be carried forward for up to six years. This increases the maximum allowable RRSP contribution for future years.

Tenant:

The holder of a leasehold estate (also called a lessee)

Tenants in common:

Two or more people who own the same piece of property, with the inherent condition that if one of the tenants die, his interest automatically passes on to his heirs.

Testamentary trust:

A trust created under the terms of a will and takes effect on the death of the testator.

Testate: Refers to a person who has died leaving a vailid will

Testator/Testatrix:

The person who is making a will in their own name.

Trust company:

A company formed under The Loan and Trust Act and operates as a private intermediary and also acts as a deposit-accepting institution which also makes loans.

Trust officer:

A person or an individual who works in the estate planning department of a trust company.

Trustee:

A person who administers assets held in trust for another person.

Trust:

A bequest or device which puts legal title and control of property in the hands of a party (trustee) for the benefit of another party (beneficiary).

Will Executing:

The process of making your will valid. Usually involves formalities in regard to signing by the testator and witnessing of that signature.

Will:

A legally enforceable declaration of a person's wishes relating to matters to be dealt with after his death and inoperative until his death. A will is revocable or can be amended by a codicil up to the time of death, and is applicable to the situation which exists at the time of death.

 

This Glossary of financial terms was created by Fiscal Agents Financial Information Services, Research Department. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, electronic, photocopying, recording, or otherwise, without the prior written permission of Fiscal Agents. Copyright Fiscal Agents © 2000. All Worldwide Rights Reserved. See Notes and Credits or see permissions page.





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