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Introduction
After an individual's death, his or her assets
will be gathered, business affairs settled, debts paid, necessary
tax returns filed, and assets distributed as the deceased individual
(generally referred to as the "decedent") directed. These activities
generally will be conducted on behalf of the decedent by a person
acting in a fiduciary capacity, either as executor (in some states
called a personal representative) or as trustee, depending upon
how the decedent held his or her property.
As a first step, it is helpful to know the meaning
of a few common terms:
- Fiduciary - An individual or trust company that acts
for the benefit of another. Trustees, executors, and personal
representatives are all fiduciaries.
- Grantor - (Also called "settlor" or "trustor") An
individual who conveys property by means of a trust; the person
whose wishes are expressed in the trust.
- Testator - A person who has made a valid will (a
woman is sometimes called a "testatrix").
- Beneficiary - A person for whose benefit a will or
trust was made; the person who is to receive property, either
outright or in trust, now or later.
- Trustee - An individual or trust company that holds
legal title to property for the benefit of another and acts
according to the terms of the trust.
- Executor - (Also called "personal representative";
a woman is sometimes called an "executrix") An individual
or trust company that settles the estate of a testator according
to the terms of the will.
- Principal and Income - Respectively, the property
or capital of an estate or trust and the returns from the
property, such as interest, dividends, rents, etc. In some
cases, gain resulting from appreciation in value may also
be income.
As a general rule, the administration of an estate
or trust after an individual has died requires the fiduciary to
address certain routine issues and follow several standard steps
to distribute the decedent's assets in accordance with his or
her wishes. These guidelines focus on activities that occur in
an estate or trust immediately after the individual has died.
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