Glossary of Terms

Administrator:  when a person dies intestate, meaning having died without a will, then an Administrator (“administratrix” for a female) is appointed by the Clerk of Court to settle the estate.  There is an order of priority to qualify as the Administrator of an intestate estate and an Administrator is issued Letters of Administration after being qualified to serve.

Administrator CTA or Administrator with the Will Annexed:  person or entity appointed by the Clerk of Court to carry out the provisions of a Will when the testator has named no executor, or the executors named in the will refuse to serve, are incompetent to act, or have died before performing their duties. 

Administrator DBN (de Bonis Non):  administrator of the goods not already administered. The administrator DBN is appointed to administer the effects of a decedent that were not administered or omitted in a previous administration.

Administrator DBN CTA: an administrator appointed to replace an executor who had died or must otherwise be replaced before completing administration of the estate.

Administration by Affidavit: see Small Estate Administration

Alternate Valuation:  generally, for federal and state estate tax purposes, the decedent’s assets are valued as of the date of his or her death. However, the personal representative/ trustee may elect to value the estate on a date that is six months after the date of death 262049v1 (the “Alternate Valuation Date”). The election is irrevocable and can only be made if the value of the gross estate and the estate and generation skipping transfer tax liability are less using Alternate Valuation Date values than if the estate were valued as of the date of death. 

Ancillary Administration:   administration of the decedent’s estate in a state other than the decedent’s primary state of residence at his or her death. Ancillary administration is necessary when the decedent owns property in a state other than that of his or her primary residence. For example, if the decedent lived in North Carolina at his death, but he owned real estate in South Carolina, it would be necessary to have an ancillary proceeding in South Carolina.

Beneficiary:  is the person who receives an inheritance from a will.  One named in a will to receive a bequest, legacy or devise, or in a trust to receive the trust proceeds

Bequest: disposition of personal property by will. A gift of property from the estate of the decedent as directed in the decedent’s Will (or living trust). A bequest may be specific or general. A specific bequest is a gift of an identifiable piece of property (i.e., a car or home). A general bequest is a gift from the general assets of the estate.

Codicil: written supplement to or addition to a will.

Collector: any person authorized to take possession, custody, or control of the personal property of the decedent. Generally, a collector is appointed for a small estate that is being administered through the process of Collection of Property by Affidavit. A collector is not a fiduciary and is only appointed when the value of personal property of the decedent is less than $30,000.

Conservator:  a fiduciary appointed by the court who is responsible for caring for an adult, which may also include his or her finances.

Conservatee:  person who is cared for under a conservatorship.

Conservatorship:  court proceeding in which a judge appoints someone to serve as conservator to care for a conservatee’s well-being and finances when they are unable to do so.

Custodian of the Will:  person who is in possession of the will upon the death of the one who wrote the will.

Decedent : the deceased person. The person whose death has occasioned the opening of an estate.

Descendants:  persons who are related in the descending line, such as child, grandchild, great-grandchild, etc.  Also referred to as “issue.”

Devastavit:  literally “he or she has wasted.” An action against an executor or administrator charging him or her with mismanagement or neglect of duty that has caused loss, and which obligates the fiduciary to the heirs, creditors or beneficiaries.

Devise:  disposition of real property by will.

Devisee:  person to whom property is devised. Person named in the will.

Disclaimer: a beneficiary’s refusal to accept property to which he is entitled from a transfer during life or at death, including property inherited under a Will, by intestacy, under a trust, by survivorship, by beneficiary designation, etc. If properly done, the Disclaimer will result in the disclaimed property passing to other beneficiaries as if the person who disclaims had predeceased the original transferor. Often, persons disclaim to save estate and/or gift taxes. In order for a disclaimer to be “qualified” for estate and gift tax purposes, the Disclaimer must be carried out in accordance with Chapter 31B of the North Carolina General Statutes and Section 2518 of the Internal Revenue Code. (see Renunciation)

Estate Tax:  a tax imposed on the transfer of property at death.

Executor: an executor (or “executrix” for a female) is the person(s) or entity named in the decedent’s will and appointed by the court to manage the decedent’s affairs and settle the decedent’s estate pursuant to the terms of the decedent’s Will. This person is also typically the one who is named as seller for the real property Some people choose multiple executors in order to ensure the estate is handled fairly and honestly. Alternative or successor executors might also be named in the Will in the event that the first designated executor cannot, or refuses to, serve. A person named as an executor in a Will can accept or reject the position. If it is rejected, the court must appoint another representative, known as an Administrator CTA to fulfill the duties.  An executor differs from an administrator in that he or she is named in the decedent’s will to manage the estate 

Family Allowances:  decedent’s spouse and dependent child(ren) are entitled to an allowance of a certain amount for their support for one year after the death of the decedent. The amounts of the allowances are set by law and free from creditors’ claims. Application must be made within one year of the decedent’s death.

Fiduciary:  term embracing administrators, conservators, executors, guardians, trustees and others who have a special duty of good faith and responsibility to the court and interested parties in relation to the matters entrusted to him or her.

Fiduciary Income Tax Returns:  income tax returns that must be filed on behalf of a trust or an estate.

Form W-9:  the Internal Revenue Service form used by a third party to request a taxpayer identification number for an estate and/or trust. By submitting a W-9 to a third party, the personal representative or trustee is certifying that the tax identification number that he or she is providing is correct and accurate.

Gross Estate:  federal estate tax concept that means the total value of all of the property included in the decedent’s estate for federal estate tax purposes, including (among other things) life insurance proceeds when the decedent is the owner and insured and property held in certain trusts created by or for the benefit of decedent.

Heir:  a person who inherits something from the deceased.  One who is designated under the laws of 

descent and distribution to receive the estate of a decedent not disposed of in a will. Although an heir may be a beneficiary, all beneficiaries are not necessarily heirs.

Holographic will:  a will written entirely in the handwriting of the decedent.

Intestate:  a person dies intestate when he or she dies without a valid Will or dies with a Will that does not dispose of all of his or her property. The intestate succession laws determine who is entitled to take the decedent’s property and also the share that each beneficiary is entitled to receive.

Intestate succession:  the order of who inherits a decedent’s property when there is no will.

Joint Tenants With Right of Survivorship: a form of property ownership (including bank and investment accounts) by two or more persons whereby when one joint tenant dies, the joint tenant’s interest in the property automatically passes to the surviving joint tenant(s). Property held as joint tenants with rights of survivorship does not pass under a person’s Will nor does it pass to a decedent’s heirs if the decedent dies without a Will. Property owned in this form avoids probate.

Legacy:  same as bequest.

Legatee: a person named in a will. One to whom a legacy or bequest is made.

Letters Testamentary or Letters of Administration: document by which the Clerk of Court authorizes the personal representative(s) to act on behalf of the estate. Letters Testamentary or Letters of Administration CTA are issued when the decedent dies with a Will. Letters of Administration are issued when the decedent dies intestate.

Notice to Creditors:  written notice published in a newspaper meeting certain criteria (and sent to certain known creditors) asking creditors of an estate to present their claims to the personal representative for payment. Claims will not be paid by the estate if not submitted for payment within the period set forth in the notice (as long as the notice period is sufficient under the law).

Personal Property:  property other than real property that can be owned. Personal property may be tangible (furniture, jewelry, clothing, art, etc.) or intangible (stocks, bonds, notes, etc.).

Personal Representative:  the person who is responsible for ensuring distribution of a decedent’s estate.  The term “personal representative” encompasses executors, administrators, and administrator CTA. The duties of each type of personal representative are the same, each individual is a fiduciary, and a typical full administration of an estate will have one of these. The duties of each position are to safeguard the estate’s property; inventory the property; submit accounts and inventories to the court as required; pay the debts and expenses of the deceased (including funeral and burial expenses, costs of last illness, and outstanding medical bills); pay any federal or state taxes; and distribute the estate to those named in the Will or, if no Will exists, to the next-of-kin.

Probate: the legal process of determining how, where, and to whom the decedent’s estate is distributed, including real property. The procedure to prove a will. Also, the collective term used for estates, administrations, guardianships, conservatorships and judicially-administered trusts, the common characteristic of which is appointment of a fiduciary to be responsible to the court and interested parties.

Probate Estate:  property passing under the decedent’s Will or by intestacy. See definition of Intestate.

Probate real estate sale:  the legal process of transferring the title of ownership of real property from the estate of the decent to his or her beneficiaries or a buyer under the court’s supervision.

Probate referee:  the appraiser of real property that must be sold in probate. In North Carolina, the State Controller appoints probate referees and assigned to cases by the court clerk. Probate referees are paid for by the estate, most often at a percentage of the appraised value of the property.

Qualification:  process by which the personal representative is appointed by the Clerk of Court to act on behalf of the decedent’s estate. See definition of Letters Testamentary or Letters of Administration.

Real Property:  the real estate (both buildings and the land) in probate and trust sales.

Resident Process Agent:  North Carolina resident appointed by a personal representative who is not a North Carolina resident to receive service of citations, notices and processes in all actions or proceeding with respect to the estate.

Receipt and Refunding Agreement:  document by which a beneficiary who receives a distribution from the estate or trust receipts for the distribution and declares that if there are any claims or expenses of the estate chargeable to that property, that he or she will return the property to the personal representative/trustee. 

Renunciation:  renunciation may take two forms. First, renunciation is the process by which the personal representative, who is either named in the decedent’s Will or who is the proper person to serve when the decedent dies intestate, represents to the Clerk of Court that he or she does not wish to serve. Second, an individual may also renounce (give up) his or her interest in an estate. The person renouncing must follow certain formalities in order for the renunciation to be valid and to be qualified.  (See Disclaimer)

Residuary Estate:  all that remains of an estate after the expenses of administration, debts, legacies and devises have been satisfied.

Revocable Trust:  also known as a Living Trust, a revocable trust is a trust that may be modified or terminated by the grantor (creator) at any time during his or her life. Upon the death of the grantor, the trust becomes irrevocable, generally provides for the disposition of trust property, and acts as a “Will substitute” so that no probate of the trust assets is required. Commonly, the assets of the decedent that are not in the name of the revocable trust at the time of his or her death will “pour-over” into the revocable trust at death pursuant to directions in the decedent’s Will.

Settlor: one who creates a trust.

Tenants in Common:  way of holding title (owning) property by two or more individuals. Tenants in common have equal rights to possession of the property. Ownership as tenants in common may be unequal (for example, 50%, 25% and 25%). Upon the death of a co-tenant, the interest of the deceased co-tenant will pass to his or her heirs.

Small Estate Administration:  procedure for abbreviated administration of an estate when the personal property of decedent, less liens and encumbrances, does not exceed $20,000.00 (or $30,000.00 if the surviving spouse is the sole heir). This procedure is commonly referred to as Administration by Affidavit.

Summary Administration:  alternative for administering an estate when the surviving spouse is the sole intestate heir or sole beneficiary under the decedent’s Will. If the Clerk of Court grants the petition for summary administration, the spouse assumes all of the liabilities of the decedent to the extent of the value of the probate property received by the spouse.

Taxable Estate:  total value of the decedent’s estate (gross estate) less deductions. The taxable estate is subject to federal and state estate taxes (subject to adjustments provided by state law).

Tax Identification Number (“TIN”):  also known as an Employer Identification Number (“EIN”):  the TIN/EIN is a tax processing number issued by the IRS to identify tax accounts of trusts and estates (as well as other entities).

Tenants in Common:  way of holding title (owning) property by two or more individuals. Tenants in common have equal rights to possession of the property. Ownership as tenants in common may be unequal (for example, 50%, 25% and 25%). Upon the death of a co-tenant, the interest of the deceased co-tenant will pass to his or her heirs.

Testate:  the state of having written a will; also refers to the individual himself or herself.

Testator:  (testatrix) The maker of a will, and one who dies leaving a will.

Trust:  arrangement by which one or more persons (a grantor) transfer legal ownership of property to a trustee for the benefit of one or more beneficiaries. A trust may be created during the grantor’s life (revocable or irrevocable) or after death in accordance with the terms of the decedent’s Will or living trust.

Trustee:  person or entity that holds legal title to assets that are held in trust and who manages and distributes the trust assets according to the terms of the trust. The trustee has a fiduciary duty to the beneficiaries of the trust.

Trustor: same as settlor.

Will:  a document executed for the purpose of directing the disposition of an individual’s property upon his or her death. The Will generally names an executor, names a guardian for minor children/dependents, and directs the distribution of one’s property. A Will must be executed with certain formalities in order to be valid. A Will generally controls the disposition of property owned in the name of the testator at his or her death, but a Will does not control the disposition of property that is owned as joint tenants with right of survivorship or property which passes by contract to a designated beneficiary (i.e., life insurance or retirement accounts).

Wrongful Death Beneficiaries:  statutory designation of persons who are entitled to a distribution of damages for another’s injury and death. Heirs and wrongful death beneficiaries are not necessarily the same persons.