The following phrases are related to Estate Planning and Wills:
Assets
This includes any items of value owned by a person including land, buildings, investments, savings and personal chattels.
Beneficiary
Someone nominated to benefit from a will. Reserved beneficiaries are often named in case the primary beneficiaries are not alive at the time the will is executed.
Bequest
A gift of an object or cash. A “Devise” refers to land or buildings.
Charity
Gifts to a registered charity.
Civil Partner
Usually refers to a same sex partner. Benefits of a civil partnership including reducing the amount of inheritance tax paid. Civil partnerships are similar to marriages under the Civil Partnership Act 2004.
Child
Includes adopted and illegitimate children but not step children for purposes of a will.
Class of Persons
A group of people with a common link. For example “grandchildren” are a class of persons.
Codicil
A document that alters or updates an existing will. It is not correct to use tippex or cross out and initial any changes in a will. A Codicil document must be used or a new will must be written if any changes are to be made legal.
Co-habitee
A person who may be able to claim some of the estate, for example if two people have been living together and paying a mortgage. However it is worth noting that the term “common law” husband/wife has no legal force.
Domicile
The country a person considers as their permanent home. A person with properties in different countries may need a will written in each country.
En Ventre Sa Mere
A child unborn in the mothers womb.
Estate
Everything a person owns or shares ownership to – except anything that is held in Trust.
Excepted Estate
This refers to estates valued at below £325,000 or between £325,000 and £1 million where no inheritance tax is paid because the estate passes to a spouse, Civil Partner or a charity.
Executor (male) or Executrix (female)
A personal representative appointed in a will. Every will needs to have at least two executors. The executors will normally have to apply for Probate to show that they have legal authority to deal with property. We would recommend having one professional executor amongst the named executors on the will.
Free of Tax
Refers to a gift where the tax is paid by the estate rather than deducted from the value of the gift.
Grant of Probate
Document issued by the Probate Registry to the executors of a will that authorises them to administer the estate.
Guardian
Someone who looks after children under the age of 18.
IHT
Inheritance tax.
Intestate
Dying without having written a will. The rules of intestacy then apply.
Issue
A persons descendants, ie. your children and their children, and their children and so on. You may write in your will “I leave … to my issue in equal shares”.
Joint Tenants
Where two or more people own assets. If one tenant dies their share automatically passes to the other tenant.
Legacy
A gift of money or an object.
Letters of Administration
Documents issued by the Probate registry.
Minor
A person under 18 years old in England and Wales.
Personal Chattels
Everything personal that someone owns.
Personal Representative
The Administrators or Executors. Administrators are the people who sort out a persons affairs if they died intestate (without a will). Executors are named persons who carry out a persons wishes who did write a will.
Probate of the Will
Document issued by the Probate registry.
Residual Beneficiary
A person who gets what is left after all debts, taxes and specific legacies have been paid.
Residual Estate
What is left in the Estate after the deduction of specific gifts, funeral and testamentary expenses.
Spouse
The wedded partner – ie. husband or wife.
STEP
Stands for Society of Trusts and Estate Planners. Mention of this in a will usually indicates that a charge will be made for services.
Subject to Tax
The beneficiary pays the tax rather than the money being deducted from the Estate.
Tenants in Common
As opposed to a joint tenancy, a persons share of a property can be distributed to other named individuals or organisations in a will.
Residue
What is left to share after all tax, expenses, debts, specific bequests and legacies have been paid.
Solvent
When the value of assets exceeds debts and liabilities.
Specific Bequests/Specific Legacies
Particular items gifted by will.
Testator (male) or Testatrix (female)
The person who has made the will.
Trustee
A person responsible for administering a Trust.
Trust
A method of putting money outside of an estate. This can help to reduce or in some cases eliminate inheritance tax.