GLOSSARY: ESTATE PLANNING

  • Will: The legal instrument that permits a person, the testator, to make decisions on how his estate will be managed and distributed after their death.
  • Administering an Estate: Winding up the affairs of the deceased. paying taxes, bills and any other debts. collecting the estate assets and distributing the residue of the estate to those who are entitled to it.
  • Henson Trust: A trust that you can set up upon death where a trustee holds and manages the person's inheritance, effectively moving legal title of the assets from the person to the trust.
  • Power of Attorney for Property: A legal document transferring the legal right to the attorney or agent to manage and access the principal's property in the event the principal is unable to do so themselves.
  • Power of Attorney for Personal Care: A legal document that allows one person to give another person(s) the authority to make personal care decisions on their behalf, if they become incapable.
  • Trusts: A legal relationship created (in lifetime, or on death) by a settlor when assets are placed under the control of a trustee for the benefit of a beneficiary, or for a specified purpose.
  • Alter Ego and Joint- Partners Trusts: An alter ego trust can only be created by an individual who is 65 years of age or older. The terms of the trust must provide that the settlor is entitled to all of the income that arises from the trust property before his or her death, and only the settlor may receive or obtain the use of the income or capital of the trust while the settlor is alive.
  • Estate freezes: An estate/tax planning structure where the owner of an appreciating asset locks in or freezes the current value and associated tax liability of that asset prior to death.