Estate Planning

Definition

• The measures undertaken to determine how assets are to be distributed after an individual dies. In many cases, estate planning involves arranging a tax-efficient method of transferring wealth, often through the use of a life insurance policy, trust, the transfer of property though joint tenancy rights of survivorship, or another method. At the bare minimum, experts suggest that one should set up a last will and testament in order to avoid probate or to make the probate process less difficult. Also known as "estate management."

Synonyms
managing your estate, planning your estate, estate managing

Related Terms and Acronyms

• Annuity — Definition,
  • A regular periodic payment made by an insurance company to a policyholder for a specified period of time.
  • A financial instrument that disperses a number of payments over a set period of time.
• Assignee — Definition,
  • In the insurance industry, an assignee is someone who is assigned ownership of another person's insurance policy.
  • A person appointed to acquire (take) an item, such as a property.
• Assignor — Definition,
• Beneficiary — Definition,
  • An individual or entity chosen to receive benefits from a will, trust, deed or insurance policy.
• Contingent Beneficiary — Definition,
  • A beneficiary who only receives his or her benefit when specific conditions have been met.
• Estate — Definition,
  • The ownership interest of an individual in real property.
  • The total sum of all the real property and personal property owned by an individual at time of death.
• Executor — Definition,
  • The person who manages the estate of a deceased individual.
• Fiduciary — Definition,
  • An individual, company, or association that manages assets for another party. Fiduciaries include executors of wills and estates, trustees, receivers in bankruptcy, and those responsible for managing the finances of a minor.
• Fiduciary Duty — Definition,
  • A requirement that someone in a position of trust, such as a banker, real-estate agent, or title agent, must act in good faith and trust on behalf of a client.
• Informal Trust — Definition,
  • Also known as in-trust account or "bare" trust, this is an investment account registered in an adult's name in trust for a child. The account is used to save/invest funds for a child, and the funds must be reserved for and used by the beneficiary child.
• Life Insurance — Definition, Very Important,
  • An arrangement where an insurer agrees to pay a benefit to one or more beneficiaries in the event of the policyholder's death.
  ➥ CanEquity offers life insurance.
• Life Insurance Trust (LIT) — Acronym,
  • A legal entity that is made the beneficiary of a life insurance policy, often arranged to evade taxation.
• Power of Attorney (POA, PA) — Acronym,
  • A document in which the signer authorizes someone to conduct business in his or her name -- signing title documents and cheques, for example.
• Private Annuity — Definition,
  • An arrangement where one party agrees to transfer ownership of an asset to another party (usually a beneficiary) in exchange for lifetime payments.
• Probate — Definition,
  • The process of deciding the validity of a deceased person's will and appointing an executor.
• Probate Sale — Definition,
  • Sale of property after the death of the owner, supervised by a court, with proceeds divided among creditors and heirs.
• Second-To-Die Insurance — Definition,
  • Life insurance that only pays a death benefit when both spouses have died, commonly used in estate planning.
• Sprinkling Provision — Definition,
  • A provision that gives a trustee the authority to distribute life insurance death benefits as he or she sees fit, and to those who need the money the most.
• Survivorship — Definition,
  • The right of a person to secure ownership by reason of his/her outliving someone with whom s/he shared undivided interest in the land.
• Trustee — Definition,
  • A person who holds and manages assets for the benefit of beneficiaries.
• Will — Definition,
  • A document that states what must be done with a person's estate after his or her death.