Estate planning can be a difficult task, but it’s even more difficult when you don’t fully understand the terms used in this area of law and how they relate to you.
In this blog post, we’ll discuss some of the key terms that will be helpful to understand if you’re planning a will or if you’re an executor who is just beginning to administer an estate.
Estate Law Terms to Be Aware Of
Abatement. This term refers to the order that debts must be paid when parts of the estate must be sold to pay those debts. Testamentary gifts are reduced if the estate no longer has enough assets to fulfill all of those gifts. An estate may not be able to pay its gifts due to debts that it owed or if there was a judgement against the deceased, to name a few examples.
Ademption. This term refers to the situation where a gift left to someone in a will is no longer available when the testator passes away. This also applies where the gift has changed form from when the testator gifted it. For instance, if someone sells property that has been gifted, or it has otherwise been destroyed.
Assets. Assets of an estate is property that the deceased owned at the time of death. This includes, but is not limited to, bank accounts, real estate, artwork, and businesses.
Beneficiary. A beneficiary is the person who inherits certain assets upon the testator’s death. Beneficiaries are owed certain things from the executor or trustee of the estate.
Bequests. This term refers to the act of giving certain assets to individuals or organizations. These assets could include stocks, jewelry, or cash. They can be given to family, friends, charities, or other institutions.
Codicil. A codicil allows the testator to make minor changes to their living will. This ensures that the changes are legally recognized.
Contingent beneficiary. A contingent beneficiary is a person named in the alternative to receive benefits in a will or trust. This usually happens on the occurrence of a certain condition precedent that is expressed (or implied) in the will.
Estate planning. This term refers to the process of arranging the transfer of assets to people as delegated in a will. It involves a long list of tasks and may require assistance from professionals, such as estate lawyers and accountants.
Executor. An executor is the person who has been appointed by the testator to administer their estate. This means they are the ones to initiate many of the processes required to carry out the testator’s wishes in their will.
Guardian. A guardian can be appointed for property or personal care where an individual no longer has the capacity to make decisions about their finances or personal care. This is often a role undertaken by a family member or friend, however, estate lawyers are also able to step in.
Holographic will. A holographic will is an alternative to a will prepared with the help of a lawyer. Instead, it is handwritten and signed by the testator. It is a good option for those who may not have access to other resources or who cannot sign in front of a witness.
Inheritance. This term describes the act of distributing assets of an individual who has passed away to their descendants. The will remains important here too, especially where the deceased has no descendants to transfer assets or if they prefer a particular arrangement involving their spouse.
Intestacy. A person is intestate when they pass away without having arranged for a last will and testament.
Issue. This term refers to the people who are below another in the family tree. This includes that person’s children, their grandchildren, their great-grandchildren, and so on. The term does not include parents, siblings, and nieces or nephews.
Last will and testament. Commonly referred to as simply a will, this is a document through which an individual dictates how their assets will be distributed on their passing. It can include other directions, such as how property is to be used and how dependents should be cared for.
Living will. This is a document that an individual can use to dictate instructions about future medical treatment should they become incapacitated and/or lose the ability to communicate.
Mirrored will. A mirrored will is a will that is entered at the same time as another with the exact same terms as that other will. This is typically used in spouses or common-law partners where each names the other beneficiary.
Personalty. Personalty is a term used to describe moveable assets that are not real property, money, or investments. Also known as “personal property.”
Power of Attorney. A power of attorney is a legal document that allows you to appoint someone you trust to make decisions on your behalf. These decisions include those pertaining to the management of your finances, property and other assets.
Probate. This is the term used to describe the process of handling someone’s estate after their death. Probate procedures in Ontario set out what should happen to transfer assets from one generation to the next.
Realty. Also known as “real property.” Realty includes real estate or the land and anything grown, built, or affixed to it.
Testacy. This term refers to an estate when that person has passed away with a last will and testament arranged. This person has “died testate.”
Testator. A testator is a person who has made a will.
Will registration. After a will is probated in Canada, it is registered with probate courts after the testator has died. Note that a will does not have to be registered to be made legal.
Contact the Estate Lawyers at Derfel Estate Law in Toronto to Address Legal Disputes Regarding a Will
At Derfel Estate Law, our experienced team of estate lawyers is always up to date on estate administration requirements and can assist with will challenges. We work tirelessly to achieve the best possible resolution in your will, estate, or trust matter. Contact us by phone at 416-847-3580 or reach us online to discuss your estate needs.