Glossary of Fiduciary Terms

Advocate: A person or institution that serves to look out for the best interests of a disabled person. 

Agent: One who has permission to act, including an attorney-in-fact under a power of attorney, or an individual authorized to make decisions concerning health care. 

Attorney Ad Litem: A lawyer appointed by the court to represent the proposed ward during the protective proceedings. The AAL advocates for the proposed ward’s wishes and desires. 

Beneficiary: The persons or institutions who receive the proceeds and remaining assets of a decedent’s estate. 

Bond: An insurance policy required by the court in an amount set by the judge to cover the assets of the estate. 

Clear and Convincing: Evidence or proof that the facts asserted are highly probable. A higher standard than a preponderance of the evidence, but a lower standard than proof beyond a reasonable doubt. 

Claims: In respect to protected persons and decedents estates, includes liabilities of the decedent or protected person, whether arising in contract, in tort, or otherwise, and liabilities of the estate which arise at or after death or after the appointment of the conservator, including funeral expenses and expenses of administration. 

Codicil: An amendment to a will. A separate document that is signed with witnesses but amends some portions of the will. 

Community Property: The property of a husband and wife that is acquired during the marriage as defined in A.R.S. §25-211. 

Conservatee: A minor or adult person whose property (estate) is being protected by a fiduciary. 

Conservator: Legally appointed protector or preserver of a minor or adult’s estate. 

Conservatorship: A legal relationship between the conservator and the conservatee. 

Devise: As a noun it means a testamentary disposition of real or personal property and when used as a verb, it means to dispose of real or personal property by a will. 

Devisee: Person(s) or entity(s) designated in a will to receive a devise or inherit property according to a person’s will. 

Distributee: Any person, other than a creditor or purchaser, who has received property of a decedent from the personal representative of the estate. 

Durable Power of Attorney: A document executed by the principal authorizing another person to act as agent with such authority continuing in effect until the onset of incapacity of the principal. 

Estate: The real and personal property of a ward, protected person, or deceased person. 

Estate Tax: Federal tax on estates valued at more than $1,000,000, as of January 1, 2002. 

Fiduciary: A person or entity to whom property management or other responsibility is entrusted including a personal representative, guardian, conservator, trustee. 

Foreign Personal Representative: A personal representative appointed by another jurisdiction (state). 

Formal Proceeding: A proceeding conducted before a judge with notice to interested persons. 

Conservatorship/Guardianship: This type of conservatorship/guardianship appointment gives the conservator/guardian the legal rights to manage all aspects of the individual’s affairs. 

Governing Instrument: A deed, will, trust, insurance or annuity policy, account with POD (payable-on-death) designation, pension, profit-sharing, retirement, instrument creating a POA or nominative instrument of any kind. 

Gravely Disabled: A condition evidenced by behavior in which a person, as a result of a mental disorder, is likely to come to serious physical harm or serious illness because they are unable to provide for basic physical needs. 

Guardian: A person who is appointed by the probate court or testamentary (a will) appointment to protect the person who does not have capacity to protect his or her own interests due to incapacity or a minor. (Excludes guardian ad litem. 

Guardian Ad Litem: A disinterested person who is appointed by the court on behalf of the ward to represent the ward’s best interest. 

Guardian of the Estate: A person or entity who is responsible for managing the financial affairs of the ward, e.g., paying the bills, collecting benefits, selling property. Known as a conservator in Arizona. 

Guardian of the Person: A person who is responsible for and advocates for the health, well being and personal needs of the incapacitated person, known as a ward in Arizona. 

Heirs: Persons who are entitled to intestate succession to the property of a decedent under state law of intestacy. 

Incapacitated Person: An adult who, because of physical or mental condition, is substantially unable to feed, clothe, or shelter himself/herself, to care for his/her physical health, or to manage his/her financial affairs. 

Informal Proceeding: A proceeding conducted without notice to interested persons by an officer of the Court acting as a registrar for probate of a will or appointment of a personal representative. 

Interested Person: This includes beneficiaries, children, creditors, devisees, heirs, spouses and any others having a property right in or claim against an estate. It also includes persons having priority for appointment as personal representative and other fiduciaries representing interested persons. The meaning varies and must be determined according to the particular purposes of and matter involved in relation to a particular proceeding. 

Inter Vivos Trust: It is a “Living Trust”. It functions during the lifetime of the Grantor. 

Irrevocable Trust: An irrevocable trust means the items placed in the trust cannot be taken out of the trust except by ending the trust and disbursing the items to the appropriate remainderman. This trust will have its own tax number and be taxed as a separate “entity”. It will also file an annual report. The trustee is obligated to manage the trust funds by reasonable prudent man standards of investment. 

Issue: A descendant of the deceased as defined in A.R.S. §14-1201(9) 

Joint Tenants: “Joint tenants with the right to survivorship” and “community property with the right to survivorship” includes co-owners of property held under circumstances that entitle one or more to the whole of the property on the death of the other or others, but excludes forms of co-ownership registration in which the underlying ownership of each party is in proportion to that party’s contribution. 

Letters: An official letter issued by the County Clerk’s office, which is written evidence of the court appointment and the authority to act. Includes Letters of Testamentary, Letters of Guardianship and Letters of Conservatorship.Limited Conservatorship/GuardianshipThis type of court appointment restricts the areas in which a conservator/guardian can act on behalf of an individual. 

Minor: Typically any person under the age of 18, though some states vary. 

Oath: A sworn, written statement made by the fiduciary in which he or she swears to fulfill his or her obligations. 

Payee: A person who receives and disburses the ward’s social security income, or SSI, outside the jurisdiction of the court. These funds are monitored by the Social Security Administration. A person may also serve as payee for Veteran’s and Railroad Retirement benefits, in the case of Veteran’s the payee is known as the “Legal Custodian”. 

Personal Representative: The individual or corporation who is responsible for carrying out the provisions of the will according to the laws of the land, or administers a person’s estate who dies intestate. Nomination of the personal representative may be determined by the testamentary instrument. The appointment may be informal or formal, 120 hours post death. 

Personal Surety Bond: The instrument executed by a fiduciary and two persons (sureties) willing to vouch for the fiduciary allowing the court to seek restitution from the guardian or sureties if the fiduciary does not perform his or her duties. 

Petition: A written plea to the court for an order. 

Principal: The person from whom an agent’s authority is derived. 

Private Fiduciary: A person, who for a fee, serves as a court-appointed guardian or conservator for one or more persons and is unrelated to the fiduciary, or a person who, for a fee, serves as a court-appointed personal representative and who is not related to the decedent, not nominated by a power conferred in a will and is not a devisee in the will. 

Probable Cause: A reasonable ground for supposing that an allegation is true, more evidence for than against. 

Proceedings: An action at law and suit in equity. 

Probate: A matter relating to or involving guardianship, conservatorship, the probate of a will, the estate of a decedent, or a trust. The court proceedings in which the property passing from a deceased person to beneficiaries under the provisions of the will or, if there is not will, under the provisions of state law. 

Probate Court: A division of the Superior Court with statutory authority to hear probate matters. 

Property: Anything that may be subject to ownership including both real and personal property or any interest therein. 

Protected Person: Means a person for whom a conservator has been appointed. 

Registrar: The official of the Superior Court Clerk’s Office designated to perform the functions as provided in A.R.S. §14-1307. 

Remainderman: The persons or institutions who will receive what is leftover of the trust after the income beneficiary has died and the trust ends. 

Revocable Trust: A revocable trust means the items placed in the trust can be taken out of the trust. This type of trust is taxed as part of the estate of the grantors. 

Separate Property: The property of a husband or wife that is not community property as defined in A.R.S. §14-1201(7). 

Settlement: When in reference to a decedent’s estate, includes the full process of administration, distribution, and closing. When in reference to a personal injury claim(s), it is the final amount agreed upon to repair the harm and close the action which may result in a petition for the appointment of a conservator. 

Special Needs Trust: Also known as a Spendthrift, Luxury, Discretionary or Supplemental Trust. It may be created as a Living Trust during the life of the person (grantor) or as a Testamentary Trust after the death of a person (grantor). It is designed to provide for the supplemental needs of a disabled person over and above that being given by the government. The trust funds are not to supplant or replace government program benefits. Once the basics of food, shelter, medical care, education, etc. are met by the government, the trust can provide additional funds to enhance the quality of life. The trustees should never give more funds causing a loss or reduction of government benefits unless there is an emergency. The trust is not in the name of the disabled person. This type of trust is not considered an asset in determining eligibility for government benefits. Only those funds actually disbursed directly to the client will count as earned or unearned income. 

Successor: The person(s) who is appointed to take over from a previously appointed fiduciary. Trustee – the person(s) who has the responsibility for managing a trust after the death or legal incapacity of the initial trustee. 

Surrogate: One substituted for or appointed to act in place of another. 

Testamentary Trust: A trust created in a will which becomes effective after the death of the person who executes it. Any special provisions for the trust are mentioned in the will, but it shall not go into effect until after the will has been probated. The trust will not be funded until after the probate is initiated. 

Testator: A person who executes a will. 

Trust: A legal method used to manage and distribute property without a court appointment. A legal entity established either by written agreement signed during the life of the person or by a will. The trust is governed by the terms in the written document. 

Trust Corpus: The property and funds held in the trust, also called the trust estate 

Trustee: The person(s) who manages the trust and who assumes a fiduciary responsibility for ensuring the funds are properly invested and disbursed according to the wishes of the Trustor and the laws of the state. The grantor and initial trustee may be the same person. 

Trustor: Also known as a “Grantor” or “Settlor”, this is the person(s) who sets up the trust. 

Ward: Means a person for whom a guardian has been appointed. 

Will: This includes a codicil and any testamentary instrument that merely appoints an executor, revokes or revises another will, nominates a guardian, or expressly excludes or limits the right of an individual or class to succeed to property of the decedent passing by the intestate succession.

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