Here is a useful guide in one place, which explains some of the legal jargon and terms that you might hear when you’re thinking about your will, or discussing it with family or friends.
|18 to 25 trust
|A trust created by will that qualifies for special inheritance tax treatment. The beneficiary of the trust needs to become entitled to the capital in the trust by age 25.
|The reduction of gifts left in the will because the estate is not big enough to meet all the legacies in full.
|See outright gift.
|The failure of a gift in the will because the property in question is not in the estate any more.
|administration of estate
|The process of collecting in the deceased’s assets, paying any debts and other liabilities, and distributing the estate.
|A person who deals with the estate of a person who died intestate – i.e. they did not leave a valid will.
|A decision made in advance by an individual to refuse particular medical treatment if they are not able to make the decision later. This is also known as a living will.
|A statement, not legally enforceable, by which a person indicates in advance the kind of care they would like to receive if they later lose capacity to decide or communicate. This should not be confused with an advance decision.
|The acceptance of one asset in whole or partial satisfaction of another legacy. For example, a person accepts a car in lieu of a cash sum that they have been left in a will.
|The formal transfer of ownership of property from the personal representatives of the estate to the beneficiary.
|The property, money, investments, and possessions owned or partly owned by the deceased at the date of death. It also covers amounts which would become payable on death (such as life insurance cover). Assets go to make up the estate.
|A clause stating that the will has been signed by the testator in the presence of two witnesses.
|A trust in which the beneficiary has the definite right to both the capital and the income of the trust property. Also known as a simple trust.
|The entitlement to benefit from property, without necessarily being the legal owner of it. This is the situation in a trust.
|(a) A person for whose benefit property is held on trust.
|(b) A person who will receive a legacy or a share in the estate of someone, by being either mentioned in a will or entitled under the rules of intestacy.
|bereaved minor’s trust
|A will trust that is created for a child under 18, at least one of whose parents has died.
|The form of application to be a deputy – who can make decisions on behalf of someone who lacks mental capacity.
|capital gains tax
|A tax on the profit when you sell or dispose of an asset that has increased in value.
|The amount of your estate on which inheritance tax is payable, calculated after liabilities, exemptions and reliefs and the nil-rate band have been deducted.
|A legally recognised relationship between two people of the same sex.
|A formal document by which changes can be made to a will. It must be signed and witnessed in the same way as a will, and it is then regarded as part of the will.
|A structure resembling a trust (an implied trust) that arises where it would be unreasonable for the individual who holds an asset to deny another individual their beneficial interest in the asset. They can arise with mutual wills.
|A gift in the will that is expressed as taking effect ‘if and when the child attains 18’. The gift only takes effect if the child reaches the age of 18.
|Court of Protection
|A court that makes decisions on property, financial affairs and welfare matters for people who lack mental capacity to make decisions for themselves.
|Where two or more people have interests in the same property. Co-ownership can subsist as a joint tenancy or a tenancy in common.
|A person or company who is owed money.
|A gift made in contemplation of death, which overrides the provisions of the will. Also known as a donatio mortis causa.
|A will made hastily by an individual who is close to death because their health has declined considerably.
|A person or company who owes money.
|A formal kind of document, requiring signature and witnessing.
|deed of appropriation
|A document that gives effect to an appropriation.
|deed of revocation
|A deed that gives effect to a revocation (a reversal or annulment) of an act, gift or document.
|deed of variation
|A document that gives effect to the variation of an estate; it should be formalised, and if the legacy concerned is real property it must be formalised.
|An individual is deemed domiciled in the UK for inheritance tax purposes if they have lived in the UK for 17 out of the last 20 years.
|A beneficiary chosen to receive a gift if the original beneficiary is not able to receive it.
|The gift given to a default beneficiary when the original beneficiary does not take it.
|Debts which are ranked lowest in order of priority for repayment out of the estate. There are some specific examples of this, such as informal loans between family members.
|A person who is financially dependent on someone else, typically a family member.
|disabled person’s trust
|A trust for someone who suffers from a mental or severe physical disability. This sort of trust attracts a favourable tax treatment if it meets certain conditions.
|The process of refusing a gift under a will.
|A trust in which the trustees have some control on how or when the property held on trust is distributed to the beneficiaries. The degree of control depends on the nature and amount of discretion given to the trustees.
|(a) The formal ending of a marriage or civil partnership.
|(b) The formal closure of a company or partnership.
|distribution of estate
|The process of paying or handing over the estate of the deceased to the people who are to inherit it.
|The country with which an individual is most closely connected and intends to reside indefinitely. An individual’s domicile status affects their inheritance tax liability.
|donatio mortis causa
|A gift made in contemplation of death, which overrides the provisions of the will. Also known as a deathbed gift.
|enduring power of attorney
|The older form of document appointing an attorney to act on behalf of someone unable to act for themselves; now replaced by lasting power of attorney.
|A general term for the assets and liabilities together – everything that belonged to the deceased, or which was owed to them (or would be owed to them on death), together with everything that the deceased owed or is to be paid on their death.
|The accounts of assets and liabilities of a person’s estate, usually prepared after death in order to calculate inheritance tax.
|A person named in the will of a deceased, with the responsibility for administering the estate. The grant of probate will be made to the executor(s).
|A beneficiary who does not pay any inheritance tax on a gift to them (e.g. spouse, civil partner, charity).
|express revocation clause
|A clause in a will that expressly revokes any previous wills the testator has made when the new will is signed.
|forced heirship rules
|Restrictions that some countries have (e.g. France, Germany and Spain) on how property you own in that country can be left to your heirs.
|A rare form of gift, by which the testator specifies a gift which does not form part of the estate at the time of death, but which would require the personal representatives to obtain by using the funds in the estate.
|gift in trust (or gift on trust)
|A gift in a will that is held on trust for the beneficiary of the trust (for example, if a large sum of money is left to a child under 18, it will be held on trust for them until they reach 18).
|The process of leaving assets or property to someone in your will. Traditionally, the word ‘bequest’ or ‘bequeath’ was used when referring to personal property (e.g. jewellery, cars, etc) rather than land and buildings but today the words ‘bequest’, ‘bequeath’, ‘give’, ‘gift, and ‘leave’ can be used interchangeably.
|Giving to executors or administrators the right to deal with the deceased’s estate. If there was a will, this can be referred to as the grant of probate. Grant can refer either to the giving of that right, or to the document issued by the court.
|grant of representation
|The authority given by the court to a person or persons to deal with the estate. It comes as the grant of probate or letters of administration.
|The total value of all assets, i.e. before deducting mortgages, funeral expenses, debts and inheritance tax reliefs.
|A person who provides day-to-day care for a child under 18 both of whose parents (or those with parental responsibility) have died. They also make important decisions about that child’s upbringing; from education and welfare to religion and medical treatment.
|health and welfare LPA (lasting power of attorney)
|A formal document appointing one or more people to make decisions on an individual’s behalf relating to their health and welfare should they become unable to do so. Examples include the individual’s daily routine, where they live, medical are they receive etc.
|Her Majesty’s Revenue and Customs – the tax authorities.
|A will that the testator (the person making the will) themselves writes entirely by hand and signs.
|The official form used to report chargeable liftime gifts to HMRC.
|The official return of estate form to be sent to HMRC when there is no inheritance tax to pay on an estate.
|The official form of inheritance tax account to be sent to HMRC when there is likely to be inheritance tax to pay on an estate.
|The official form of application to obtain an inheritance tax reference number from HMRC.
|The form to complete when executors wish to pay inheritance tax direct from the deceased’s bank or building society accounts.
|Describing a person whose parents are not married or in a civil partnership.
|A gift in a will to a single person.
|Inheritance Act Statement (or Declaration)
|A legally recognised document written at the same time as a will stating the testator’s reasons for writing the will as they have. It is often used if the testator has made lifetime gifts to someone who is financially dependent on them and fears the person may challenge the testator’s will.
|A tax paid on an individual’s estate which is worth more than £325,000 when they die. There are a number of exemptions and reliefs from inheritance tax.
|inheritance tax relief
|A reduction in the amount of inheritance tax payable if the assets in question satisfy certain conditions. Agricultural property and business property are examples of assets which attract relief from tax.
|inheritance tax threshold
|The nil rate band of inheritance tax.
|When the assets of an estate are insufficient to meet all the debts of the estate.
|interest in possession
|A right to the income from a trust.
|Where a person dies without leaving a valid will. The deceased is said to have died intestate.
|The rules of law which determine the order in which people inherit the estate if there is no will.
|A gift in a will to two or more people. These people will own the asset or property jointly.
|Two or more people owning property or some other asset together. Joint ownership can be as joint tenants or tenants in common.
|A form of joint ownership where all the owners own all the property or asset. This means that when one joint tenant dies, the property remains wholly owned by the other joint tenants by right of survivorship, and cannot be passed in a will or by intestacy to any other party.
|The situation when two people plan how their estate will be disposed of when they die. English law does not recognise the idea of one will that disposes of two estates. A joint will may also refer to mirror wills or mutual wills.
|A country or place with its own legal system. One particular example is that Scotland is a different jurisdiction to England and Wales.
|The official form to create a property and financial affairs LPA.
|The official form to create a health and welfare LPA.
|Land Charges Register
|A register kept by the Land Registry which records information about a property’s history including planning applications, building regulations applications, conditions or other charges on the property.
|A non-ministerial government department that registers the ownership of land and property in England and Wales.
|lasting power of attorney (LPA)
|A formal document appointing one or more people to make decisions on an individual’s behalf should they become unable to do so. There are two types – a health and welfare LPA and a property and financial affairs LPA.
|A gift made in a will. It can be a specific gift, a residuary legacy, or a general legacy.
|The absolute ownership of property. In the case of registered land, the legal owners are the persons whose names appear on the title at the Land Registry. Legal owners – such as trustees – sometimes own property without the right to benefit from it.
|Describing a child born to parents who are married or in a civil partnership.
|Describing a child born to parents who marry or enter into a civil partnership at some time after the child is born.
|letter of wishes
|A document that accompanies a will and sets out the testator’s wishes and guidance to their executors on what should happen after their death. A letter of wishes is not legally binding.
|letters of administration
|The authority given by the court which entitles a person or persons (administrators) to deal with the estate of a person who died intestate – i.e. they did not leave a valid will.
|The debts owed by the deceased on their death, including any credit card payments, mortgage, and other things that the estate would be liable to pay.
|A right to receive the income from an asset for the rest of the beneficiary’s life or until the life interest is terminated. If the life interest relates to a property, the beneficiary will either be entitled to live in the property or to receive the rental income from it.
|life interest trust
|A trust in which the primary beneficiary has an interest in possession in the trust assets. This means they are entitled to the income from the assets for the rest of their life or until the life interest is terminated.
|A gift made by the deceased before they died. A substantial lifetime gift made less than seven years before the death will have to be added back to the value of the estate.
|Another, less formal, name for an advance decision.
|Being able to make your own decisions. Someone without mental capacity is unable to make their own decisions due to an illness or disability.
|Most commonly used to refer to individual wills made by two people, and whose provisions reflect each other entirely or for the most part (i.e. the wills mirror each other). Also refers to couples who make their wills at the same time.
|The lender in a mortgage arrangement. (The property is mortgaged by the borrower to the lender).
|The borrower in a mortgage arrangement.
|Wills made by two people in which they agree to make their wills in a specified form and agree not to revoke their will without the consent of the other. Sometimes mistaken with mirror wills.
|The gross estate minus liabilities – i.e. debts and funeral expenses – before inheritance tax exemptions.
|nil rate band
|The inheritance tax-free allowance, currently set at £325,000. If an estate is worth less than this, there will be no inheritance tax to pay.
|An asset which the deceased nominated to go to a specific person. In practice these are relatively rare as they relate to small investments with particular kinds of mutual society, or old National Savings investments.
|Non-Contentious Probate Rules
|Rules which set out how probate works and who is entitled to administer an estate when there is no will.
|notice of severance
|A notice by which a joint tenancy is turned into a tenancy in common.
|A form of privileged will that is not written, but spoken in front of a credible witness.
|A promise that given information is true to the best of someone’s knowledge.
|Office of the Public Guardian
|A government department that protects people in England and Wales who may not have the mental capacity to make certain decisions for themselves, such as about health and finance.
|open market value
|The value that an asset would expect to realise if sold on the open market. This is the value that professional valuers give when valuing assets for the estate.
|A gift which passes completely to the recipient, so that they can do with it exactly as they wish. The other usual way of making a gift, where the recipient does not have complete control of it, is a gift in trust.
|The official probate application form.
|All of the legal rights, powers, duties, responsibilities and authority a parent has in relation to a child and that child’s property.
|Where there is a valid will, but it does not deal with the whole of the deceased’s estate. The parts of the estate not dealt with are administered according to the intestacy rules.
|A specific gift in a will of a sum of money to a particular beneficiary or class of beneficiaries.
|Relating to the grant of probate, a lack of care in granting it, which may be grounds for revocation.
|Personal property – usually relating to physical items (as opposed to assets, savings etc).
|The possessions and assets belonging to a person that are not related to real property.
|A general term for the person(s) who deal with the affairs of a deceased after they have died; it includes executors and administrators.
|potentially exempt transfer
|A gift which is only chargeable to inheritance tax if the donor dies within seven years from the date of the gift.
|The ability for an executor to allow the other executors to apply for a grant of probate but to reserve the right to take up their appointment as executor at a later date.
|An unusual kind of debt. The most likely scenario to arise in the administration of an estate concerns wages due to employees or contributions due to pension schemes.
|A will made by an individual in active military service, so that it can be made and validly executed quickly. It can be either written or “nuncupative” – which means that it is spoken in front of a credible witness.
|The process of proving that a deceased person’s will is valid and then giving the deceased’s personal representatives the right to deal with their assets and estate. If there is no will, the process of probate ends with the grant of letters of administration.
|An office that issues grants of probate and letters of administration. There Principal Probate Registry is based in London and there are 11 District Probate Registries.
|A general term for all the assets and belongings of a person, but in the context of dealing with the estate of a deceased, it usually refers to homes, land and other permanent buildings. This is also more fully referred to as real property.
|property and financial affairs LPA (lasting power of attorney)
|A formal document appointing one or more people to make decisions on an individual’s behalf relating to their property and financial affairs. Examples include paying bills, selling property, managing investments etc.
|A shareholding made up of shares quoted on a stock exchange.
|a term referring to land, dwellings and other permanent structures, and the nature of the rights or interests that a person has in them.
|Acknowledgement of something (i.e. a gift) having been received.
|relevant property trust
|Any trust that is subject to the ‘relevant property charging regime’ for inheritance tax (including discretionary trusts).
|When an executor steps down from their position.
|renunciation of probate
|The process of an executor stepping down and renouncing their role.
|Place where an individual lives, i.e. their ‘dwelling house’.
|residence nil rate band
|An inheritance tax-free allowance available from 6 April 2017 where a residence is given to a direct descendant.
|Where an individual is living for the time being. Being resident in the UK for tax purposes depends largely on how many days are spent in the UK. Not to be confused with domicile.
|A person who inherits the whole, or a share, of the residuary estate.
|The estate that remains after all debts and liabilities have been paid, and (if there was a will) all specific gifts have been made over to the relevant beneficiaries. May also be referred to as the ‘residue’.
|A gift in a will of the whole of the residuary estate, or an identified proportion of it. E.g., a spouse might be left the whole of the residuary estate, or it might be left to the testator’s children in equal shares.
|The legacy of a share – or the whole – of the residue.
|Another term for residuary estate.
|A clause in a document that allows the contents of the document to be reversed or annulled at a later date.
|right of survivorship
|The process where property co-owned by two or more people as joint tenants automatically passes to the surviving joint tenant(s) on the death of a joint tenant.
|rules of intestacy
|See intestacy rules.
|The official form of application to enter a restriction with the Land Registry when severing a joint tenancy by notice or agreement.
|A creditor (a person or company who is owed money) whose debt is secured by property or some specific asset. If the deceased leaves debts to be paid, secured creditors have priority to be paid from the asset in question.
|The person who creates a trust and puts assets into it. When the trust is created by a will, the settlor is the testator.
|See bare trust.
|The gift in a will of a specific item or sum of money (pecuniary legacy) to a particular beneficiary.
|The exemption from inheritance tax of everything which passes to the deceased person’s spouse or civil partner.
|A notice placed in the London Gazette (and other newspapers) advertising for creditors of a deceased’s estate to come forward. If personal representatives place these adverts and no creditors come forward within two months, the personal representatives will not be liable if they distribute the estate and a creditor subsequently appears.
|Society of Trust and Estates Practitioners.
|An individual appointed to act as an executor if the first appointed executor(s) is unable or unwilling to do so.
|An individual appointed to act as a child’s guardian if the first appointed guardian is unable or unwilling to do so.
|A clause in the will allowing the children of a chosen beneficiary to inherit that beneficiary’s share if they die before the testator.
|The principle that when a joint tenant dies, their ownership of property is automatically assumed by the other joint tenants.
|A clause in the will that means a beneficiaryonly takes their inheritance if they survive the testator by a specified period of time, usually 30 days.
|tenancy in common
|A form of joint ownership where two or more owners have shares in the property or asset owned. The shares do not have to be equal – for example they could be 50:50 or 40:30:30. But because they are shares in the asset, one owners share can be passed to the beneficiaries of their estate when they die.
|Relating to wills.
|The mental ability in law to make a valid will.
|testamentary capacity report
|A report provided by a medical practitioner which states whether the testator has testamentary capacity. Reports are often sought where the testator suffers from a serious medical or mental condition.
|Expenses incurred in the performance of an executor’s duties.
|A will trust.
|A person who makes a will. In more formal language, a woman who makes a will is referred to as the testatrix.
|An arrangement under which the legal ownership of property or assets is held by one person (the trustee) for the benefit of another or others (the beneficiaries). The person setting up the trust is the settlor. Wills very frequently create trusts for the distribution of the estate, but they are also very common to protect assets when someone wants to pass on the benefit of property without totally relinquishing control over it. A trust created by a person to be managed during their lifetime is a trust inter vivos.
|The deed that sets out the terms of a trust which is created otherwise than by a will.
|The document (or ‘instrument’) which creates trust. It may be a trust deed or a will.
|The assets, property and any accumulated income in any trust. In a will it is way that the residuary estate is referred to if the will creates a trust of the whole estate.
|The person (or it can be a corporate body) who holds legal ownership of property held on trust, and is responsible for the administration and distribution of the trust property to the beneficiaries.
|Improper pressure on a person resulting in them making a decision they wouldn’t have otherwise made.
|A creditor whose debt is not secured by any asset or property. If a deceased person leaves debts to be paid, unsecured creditors are low in order of priority.
|ultimate default clause
|A back-stop measure in a will that contains a gift to a class of beneficiaries (often charities) to prevent the will from failing and the estate being distributed according to the intestacy rules.
|A shareholding made up of shares that are not quoted on a stock exchange.
|Changing who the beneficiaries to the estate are. E.g., one beneficiary decides that they would prefer their share of the inheritance (or part of it) to go to someone else. Variation can apply both in intestacy and where there is a will.
|A legacy in a will that is expressed as taking effect on a child’s attaining 18. The legacy forms part of the child’s property.
|A binding testamentary document that allows a testator to appoint executors to administer their estate and dispose of it to the beneficiaries chosen by the testator.
|Any trust that is created by a will.
|(a) A person who gives formal evidence at a court hearing.
|(b) A person who signs a document but is not party to it.