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Administrator:
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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.
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Agent for the Executor:
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An
individual or trust company is retained by the executor and
provides administrative services and advice.
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Alternative appointment:
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If
the first executor is unwilling or unable to act, then the
alternative is contacted to perform the duty.
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Asset:
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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.
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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. |
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Beneficiary:
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One who is to receive the benefits of any type of contract.
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Bequest:
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A
disposition of personal property by will.
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Capital
Gain:
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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.
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Capital
Loss:
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The loss that results when a capital asset is sold for less
than its purchase price.
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Cash
Flow:
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Net
income for a stated period, plus any depreciation and amortization
or other non-cash deductions.
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Certificate
of Appointment:
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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.
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Codicil:
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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.
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Commute
Value:
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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).
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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.
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Custodian/Guardian:
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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.
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Deemed
Disposition:
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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. |
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Donee:
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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.
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Donor:
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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.
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Estate:
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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.
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Estate
Planning:
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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.
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Estate
Freeze:
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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. |
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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. |
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Family
Trust:
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An
inter vivos trust established with family members as beneficiaries:
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Face
Value:
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The stated nominal value of a security, so called because
it is usually the value printed on the face of the legal certificate.
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Fair
Market Value:
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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.
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Fiduciary:
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An
individual or institution occupying a position of trust. An
executor, administrator or trustee, hence, "fiduciary"
duties.
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Guaranteed
Term:
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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)
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Heir:
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A
person legally entitled to receive property from a deceased
through inheritance.
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Holograph
will:
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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.
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Illiquid:
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The description of a security for which it is difficult to
find a buyer or seller.
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Illiquid
Investment:
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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.
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Inclusion
Rate:
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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.
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Income
Attribution:
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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.
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Income
Averaging Annuity:
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A special type of annuity to spread the impact of income tax
on certain types of taxable lump sum receipts.
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Income
Splitting:
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The
process of diverting taxable income from an individual in
a high tax bracket to one in a lower tax bracket.
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Inter
Vivos:
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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.
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Inter
Vivos Trust:
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A trust created while the person making the trust is still
alive.
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Intestacy
Laws:
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The
provincial laws governing distribution of the assets of a
person who dies without a will.
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Intestate:
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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.
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Issue
(estate): |
All
those who are descended from common ancestors. The first generation
are normally referred to as children. |
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Joint
and Last Survivor:
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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.
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Joint
Tenants with Right of Survivorship:
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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.
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Letters
of Administration:
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A
certificate confirming the authority set out in the will to
administer a particular estate, issued to an administrator
by the proper court.
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Letters
Probate:
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A
certificate of authority to administer a particular estate,
issued to an executor by a proper court.
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Liabilities:
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What
is owed by the deceased or the estate.
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Life
Annuity:
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An annuity under which payments are guaranteed for the life
of the annuitant.
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Life
Annuity (With a Guaranteed Term):
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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.
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Living
Will:
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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.
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Mandate: |
A
term used in Quebec that describes the function of a Power of
attorney |
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Personal
Net Worth:
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Total
assets minus total liabilities of an individual.
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Personal
Representative:
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A
general term applicable to a person, including an administrator
or executor, having the legal right to represent a person
including a deceased person.
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Power
of Attorney:
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A
legal document that gives signing authority for your affairs
to a spouse or other trusted person over property and personal
care issues.
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Power
of Attorney - Personal Care:
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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.
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Power
of Attorney for property:
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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.
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Probate:
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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.
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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. |
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Settlor:
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The
person establishing and transferring assets to a trust, also
known as the grantor.
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Succession
Duties:
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A
direct tax levied by some provinces (Quebec, Ontario, Manitoba
and Saskatchewan) on value transferred at death on those who
receive the property.
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Succession
Duty Releases:
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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.
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Succession
Planning:
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For
a business is planning for the next generation of owner/managers
to succeed the current owner/manager.
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Spousal
RRSP:
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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.
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Unused
RRSP- Carried Forward:
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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.
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Tenant:
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The
holder of a leasehold estate (also called a lessee)
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Tenants
in common:
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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.
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Testamentary
trust:
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A
trust created under the terms of a will and takes effect on
the death of the testator.
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Testate: |
Refers
to a person who has died leaving a vailid will |
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Testator/Testatrix:
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The
person who is making a will in their own name.
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Trust
company:
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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.
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Trust
officer:
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A person or an individual who works in the estate planning
department of a trust company.
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Trustee:
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A person who administers assets held in trust for another
person.
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Trust:
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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).
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Will
Executing:
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The
process of making your will valid. Usually involves formalities
in regard to signing by the testator and witnessing of that
signature.
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Will:
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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.
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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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