This blog is a nod to all of our clients who think they are appointing us (their lawyer/attorney) as their "attorney" for property. We've put together this helpful resource of important legal terms in the Ontario estate and trust planning context. We hope this is a helpful tool or refresher for our readers and will make these legal terms less confusing.
- Attorney (for personal care or for property)
– A substitute decision-maker appointed under a Power of
Attorney for Personal Care or Continuing Power of Attorney for
Property. An attorney for personal care can make decisions about
your health care, housing, and other aspects of your personal life
such as meals and clothing. An attorney for property can make
decisions about your financial affairs, including, for example,
paying your bills, maintaining your house, and managing your
investments. The term "Attorney" is another term for
"agent" and does not mean a lawyer in this context.
- Beneficiary – A person who inherits
property or an interest in property upon the testator's death
or benefits under the terms of an inter vivos trust. A
beneficiary can also be designated on life insurance policies and
registered plans, such as Tax-Free Savings Accounts, Registered
Retirement Savings Plans and Registered Retirement Income Funds, to
receive proceeds on death.
- Codicil – A legal document, created by
conforming to certain legislated rules, which amends a Will.
- Continuing Power of Attorney for Property
– A legal document, created by conforming to certain
legislated rules, by which a person appoints another person (an
"attorney for property") to make decisions on their
behalf about their property (except making a Will) which will
continue should the person become incapable.
- Decision-Making Responsibility (with respect to a minor
child) and Guardian of the Property (of the minor child)
– A person can be appointed by a testator's Will or by
court order to have decision-making responsibility with respect to
a minor child (formerly referred to as custody) after the death of
the testator, including to make decisions about a child's
well-being, including with respect to health care, education,
culture, language, religion and spirituality, and significant
extra-curricular activities. A guardian of the property of a child
has charge of and is responsible for the care and management of the
property of the child.
- Estate Administration Tax –
Ontario's Estate Administration Tax (formerly probate fees) is
charged on the value of the estate of a deceased person if a
probate certificate or certificate of appointment is applied for
and is issued. There is no Estate Administration Tax payable on the
first $50,000, and anything above that will be calculated at a rate
of 1.5% ($15,000 per million).
- Executor – The person appointed under a
deceased's Will who administers a person's estate upon
their death.
- Inter Vivos Trust
– A trust created while a person is alive. Common examples
include a Spouse or Partner Trust, Alter Ego or Joint Partner
Trust, and a family trust used for income-splitting purposes.
- Power of Attorney for Personal Care – A
legal document, created by conforming to certain legislated rules,
by which a person appoints another person (an "attorney for
personal care") to make personal care decisions on their
behalf in the event they are no longer mentally capable of making
such decisions for themselves.
- Primary Will – A legal document, which
is prepared together with a Secondary Will, to express one Will and
separate the estate assets into two groups. Assets owned personally
by the testator and held in his or her name are typically dealt
with under the Primary Will, which generally needs to be probated
in order to effect the transfer or disposition of the assets
falling under the Primary Will. This generally will include bank
and investment accounts, real estate (subject to exceptions), and
marketable securities.
- Probate – The commonly used term for the
process to have the Court confirm the authority of a person named
as the executor in the deceased's Will and formally approve
that the deceased's Will is their last valid Will, or, in the
case where the deceased died without a Will, to grant a person the
authority to act as the estate trustee of an estate. At the time an
application for probate is made, Estate Administration Tax is
paid.
- Secondary Will – A legal document, which
is prepared together with a Primary Will, to express one Will and
separate the estate assets into two groups. The assets on which no
probate fees will likely be payable are governed by the Secondary
Will. This generally will include shares held in private
corporations, any interest in a partnership, joint venture or other
legal entity, any outstanding non-registered family loans, certain
real estate, and personal effects, including art and
jewellery.
- Settlor – A person who creates (or
settles) an inter vivos trust.
- Testamentary Trust – A trust that is
created under the terms of a person's Will and is only
effective after their death.
- Testator – A person who creates a Will
for himself or herself.
- Trustee – A person who holds title to
property on trust for the benefit of other persons or for certain
specific purposes.
- Will – A legal document, created by conforming to certain legislated rules, which comes into effect on death, by which a person provides for who administers their estate and who is to benefit from their estate.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
