After an individuals 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 decedents 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.