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5 terms to know when sorting your affairs

Article provided by Concentra Trust
 
The world of estates and trusts is full of terminology that may be confusing to people outside the industry. Below are some definitions to help you decide whether your executor, attorney, or trustee will make decisions by themselves or with someone else.
 

1. Sole

Let’s say you have one child who is named in your will, power of attorney, or trust. They will be able to make all decisions solely. In other words, they are responsible for every administrative decision they make with regard to your affairs.
 

2. Alternate

If you plan to name one person to act in your will, power of attorney, or trust, we encourage you to name someone else as an alternate. This person (or trust company) can step in to fill the role if the original person is unable or unwilling to do so. If there is no alternate, and the original person can’t or won’t act, a court application to replace them will be required, which is costly and time-consuming.
 

3. Joint

If you name more than one person to act jointly, it means they must make all decisions unanimously and can’t make decisions on their own. If they don’t get along, disagree constantly, or if one isn’t available for an extended period of time, this can be problematic. If they realize they can’t work together, a solution is for one of them to renounce their role. They must do this before they take on the role. Another solution is for them to appoint a trust company such as Concentra Trust to act as their agent and manage the administration. The benefits of this solution include a trust company will not take sides and will remain neutral.
 

4. Joint and several

Appointing people jointly and severally is rare. This type of appointment means one can make decisions about one part of the administration, and one can make decisions on other matters. There are advantages and disadvantages to this approach. The advantage is if one person is unavailable for an extended time, the other can act alone. It can be a disadvantage if each person is making decisions and they disagree. It also creates a greater risk of financial abuse and can make reporting more difficult. Trust companies will not accept a joint and several appointment.
 

5. Successor

Naming a person or trust company as a successor is common with trusts and powers of attorney. The successor doesn’t have any duties until the original trustee or attorney is unable or unwilling to continue to act. This is important when investments must continue, taxes must be filed, and record keeping must happen. Naming a successor is a logical solution; without a successor, or including instructions on how to choose a successor, an application to the court will be required to name a replacement.
 

Take action

Review your will, power of attorney, and trusts to ensure you’ve named your executor, attorney, and trustee in the way that best suits your circumstances. Consider the following:

  • Do they live outside Canada?
  • Are they the same age as or older than me?
  • Will they be able to handle conflict if it arises?
  • Can they maintain impartiality?
  • Do they have the time?
  • Do they have the required expertise?
  • Did I ask them if they’re willing to take on the role?

 
An estate and trust specialist at Concentra Trust can answer your estate planning questions. Concentra works with you to ensure you have the documents you need — such as wills and powers of attorney for property and personal care — and to determine whether establishing a trust for your loved ones is the right approach.
 
Being named as an executor is a serious commitment. It can be a new and challenging experience, often charged with emotion and complicated by your own sense of grieving. Executor EASE is a flexible, affordable solution that assists executors to understand and conduct the duties and responsibilities of administering an estate.
 

 

   

 

Concentra Trust, a national trust company, has been serving clients, corporations and communities for more than 65 years with tailored estate and trust solutions designed to preserve and transition wealth to future generations. We are well versed in navigating the intricacies of estate planning and administration and our experts have the skill to support all aspects of the process. Given our passion for trust governance, our unbiased advice and guidance, and our inclusive leadership culture and co-operative values, we provide exceptional client service.
 
The content of this article is provided for general information purposes only. It is not intended to be specific advice regarding legal, accounting, financial, or tax matters on which you should rely. You must obtain more specific or professional advice before taking, or refraining from, any action or inaction on the basis of the content in this article. We accept no liability for any loss or damages arising out of your use or reliance of the information in this article, including liability towards third parties.

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