Demystifying Key Terms in Estate Planning: A Beginner’s Guide

The world of estates often uses specialized language that can be unfamiliar to non-lawyers. Below are several key terms and their meanings in the estate planning context that may be useful to you as you navigate your estate planning journey.

• Will: a legal document that expresses an individual’s wishes regarding the disposition of their property after their death.

• Testator: a person who has made a will.

• Executor: known as an estate trustee in Ontario, this is the person(s) named in a will to carry out the testator’s wishes and manage the estate.

• Beneficiary: an individual named in a will to receive assets or property from the deceased’s estate.

• Issue: refers to a person’s descendants (children, grandchildren, great-grandchildren, etc.).

• Residue: the part of the estate that remains after the payment of all debts, expenses, claims, taxes, and specific gifts have been made.

• Trust: describes the relationship created where property is transferred to someone (a trustee) to hold and manage for the benefit of specific beneficiaries.

• Probate: a procedure to ask the court to confirm the authority of a person named in a deceased’s will as estate trustee, or to give a person the authority to act as the estate trustee of an estate.

• Intestacy: occurs when a person dies without leaving a valid will, or there is a valid will but not all assets are disposed of under its terms (a partial intestacy).

• Power of Attorney: a legal document that grants someone the authority to act on behalf of another. In the Ontario estate planning context, these documents are typically drafted for use when a person no longer has capacity to manage their affairs, and are divided into two types: property and personal care.

• Attorney: An attorney for property manages financial and property-related matters, while an attorney for personal care is responsible for decisions relating to the individual’s health and well-being. The same person can fulfil both functions, or different individuals can be named.

• Grantor: in the context of a power of attorney, this is the person who authorizes another to make decisions on their behalf.

• Guardian: the person appointed by a court to make decisions for a minor or an incapacitated adult. There are different types of guardianships in Ontario.

An experienced estate planning lawyer can help you decode the legal jargon that so often comes up in this area, helping to instil in you the confidence necessary to make informed decisions about your legacy, and securing your peace of mind for the future.

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