Will & Estate Planning Glossary of Terms
Will & Estate Planning Glossary of Terms
Will & Estate Planning Glossary of Terms – A-Z List of commonly used legal terms relating to Wills and Estate Planning.
This is someone who is appointed by law to deal with the affairs of the person who has died. An administrator could be appointed because the person who died did not have a Will or they had a Will but did not appoint an Executor or the person appointed does not wish to act.
These are valuable possessions you own. The most valuable asset is more than likely to be your home.
This is anyone who is referenced to benefit from a Will or a Trust.
Capital gains tax
This is a tax you pay when you sell or give away an asset worth more than £6,000. The tax is calculated on the gain made on the value of an asset when you dispose of it. Some of your assets are exempt from capital gains tax.
These are movable personal items you own such as; jewellery, furniture, pieces of art and cars.
It’s a means of making amendments/changes to an existing Will.
Deed of Variation
A beneficiary on receipt of an inheritance is able by Law to vary the inheritance they have received. The beneficiary is able to do this within 2 years of the date of death of the deceased. This is called a ‘Deed of Variation.’
The terminology estate is everything you own at the time of your death, less what you owe. (The ‘net’ estate is the estate less what is owed. The ‘net estate’)
Executors are people you choose to administer your wishes as stated in your Will.
These are people chosen by you and named in your Will to look after your minor children on your death.
Inheritance Tax (IHT)
This is a tax paid on your estate after you die. However, everyone is allowed to leave an amount before inheritance tax is payable. The current 2010/2011 inheritance tax threshold is £325,000. Inheritance tax is payable at 40% on the value of the estate which exceeds the inheritance tax threshold.
They are the Laws which determine who would benefit from the estate because the deceased didn’t make a Will.
This is a type of ownership on a property. For example, if a couple owns a house together and purchased it jointly they are known as joint tenants. If a joint owner dies then the surviving owner(s) becomes the owner of the asset purely through survivorship. The Will of the deceased does not control where the deceased share is distributed.
Lasting Power of Attorney (LPA’s)
This is a legal way to give someone else the powers to handle your finances and welfare if you become incapable of doing so yourself. There are different types of powers of attorney.
Legacies are gifts of specific monetary amounts or specific property/ items that you leave to someone in your Will. These are paid after the debts of the estate are settled and before the residue is distributed.
Letters of Administration
A legal document which is issued by the Probate Registry to administer the estate of a person who has died without making a Will.
‘Probate’ is the process of proving a Will. The Executor or administrator undertakes this role establishing the estate value and the person(s) to benefit from the estate. It is a process that is required if the estate is valued in excess of £5,000.
The residue of your estate includes everything else that you own after all debts, funeral expenses and all legacies and tax has been paid. That is to say, everything you own when you pass away which has not been gifted elsewhere in your will.
Tenants in common
Tenants in Common are one of the ways to own property, by two or more individuals. It determines that each owner owns a specific share. In which case on death, the deceased share can be directed by their Will
A trust is an obligation binding a person (which can be an individual or a company) called a ‘trustee’ to deal with ‘property’ in a particular way, for the benefit of one or more ‘beneficiaries’.
Trustees are the people you have chosen to look after any part of your estate that is put into a trust. They are the legal owners of the Trust, legally bound to look after the property of the trust in a particular way and for a particular purpose.
A Will is a legal document that declares your intentions as to what you would like to happen to your estate when you die. To be valid it needs to be signed by the Testator, witnessed by 2 adults who are NOT Beneficiaries or the spouse of a beneficiary in the presence of the Testator and each other.
A witness is someone who sees you sign the Will. To be valid a Will must have two witnesses who see you sign the Will and you must watch them sign the Will.
More Frequently Asked Questions
For more in-depth discussions on Wills, Trusts and Estate Planning topics Check out our Blog