Glossary of Terms

Wills, trusts and inheritance disputes

wills, trusts and estate planning

    administrative power

    The power to administer and manage a trust or estate

    administrator/ administratrix

    Person appointed by the court to gather in assets, pay off liabilities and distribute the estate of a person, either where the person died without a will or the executor appointed in their will is not acting

    advanced decision/advance directive

    An advance directive is a document by which a person makes provision for health care decisions in the event that, in the future, he/she becomes unable to make those decisions. Sometimes called a ‘Living Will’.

    articles of association

    The Articles of Association is a document that contains the operational rules for a company. It is an important document which needs to be filed with the Registrar of Companies.

    ascertain

    To make certain of something

    attorney

    A person appointed to make decisions on behalf of a donor by way of a power of attorney

    bare trust

    A trust where the trustees hold assets in set shares for defined beneficiaries. The beneficiaries have a right to both income and capital in the share they hold and may call for both to be remitted into their own names.

    Beneficial/equitable  ownership

    The ownership of an interest in assets for one’s private enjoyment, having the full economic benefit from the asset. For example, where A is sole owner of a house s/he has legal and beneficial ownership, but if A holds property as trustee for B, A has legal ownership but B has beneficial ownership.

    beneficiary

    A person or group who receives money, advantages, etc. as a part of a trust or estate

    bequeath

    Leave property to a person or other beneficiary by a will.

    bequest

    Gift of personal property by testamentary disposition.

    business property relief

    Business Property Relief provides relief from Inheritance Tax on death on the transfer of relevant business assets at a rate of 50% or 100%

    capital gains tax

    A tax levied on profit from the sale of property or an investment.

    caveat

    Document lodged with Probate Registry which stops a party from taking out a grant of probate/ grant of representation to an estate

    chattels

    Tangible movable property/personal possessions

    civil liability

     A potential responsibility for payment of damages or other court-enforcement in a lawsuit, as distinguished from criminal liability, which means open to punishment for a crime.

    codicil

     A supplementary document to a will. Used by a testator to change the terms of an existing will. Usually used for minor alterations.

    contingent interest

    An interest in property which is made subject to its owner fulfilling a condition (e.g. attaining 30 or being alive at the life tenant’s death)

    deed of variation

    A document which can be used to change the distribution of an estate after a person has died

    deputy

    A person appointed by the Court of Protection to make decisions on behalf of a party who is unable to make their own decisions, or assist them in making their own decisions

    devise

    Gift of real property in a Will.

    disabled person's trust

     A trust which can make provision for someone who has a mental or physical disability.  The trust can benefit from favourable tax treatment. The trust can be set up either during the disabled person’s lifetime or it could take effect on someone else’s death through that person’s will.

    discretionary trust

    A trust in which the shares of each beneficiary are not fixed by the person creating the trust in the trust deed or will. The distribution of assets will instead be at the discretion of the trustees.

    distributive power

     The power to distribute trust income and/or capital to the beneficiary of a discretionary trust or the object of a power of appointment sometimes called a ‘dispositive power’

    donee

    Recipient of a gift or power

    donor

    Person making a gift or power

    double taxation treaty

    An agreement between two or more countries that reduces the amount of tax that an international worker or company must pay, so they do not have to pay tax twice on the same income or inheritance

    enduring power of attorney

    An Enduring Power of Attorney or EPA is a legal document that lets a donor appoint one or more attorneys to help them make decisions or to make decisions on their behalf relating to their finances. EPAs can no longer be created and have been replaced by Lasting Powers of Attorney, however historic EPAs are still valid documents

    equity

    Value of an asset less the value of liabilities against that asset.

    estate

    Property or possessions

    executor/executrix

    Person named in Will to carry into effect the Will’s provisions: s/he needs to prove the Will by taking out a grant of probate

    grant of probate/letters of administration/representation

     If you are named as an executor of a will you may need to apply for a grant of probate. A grant of probate is an official document which the executors may need to administer the estate. It is issued by a section of the court known as the probate registry.

    inter vivos

    During lifetime (as in lifetime gift)

    intestacy

    Intestacy where a person who dies without having made a valid will or other binding declaration. When this happens the distribution of the deceased’s estate is set out under legislation.

    intestate

    A person dying without a valid will

    lasting power of attorney

    A lasting power of attorney ( LPA ) is a legal document that lets a donor appoint one or more attorneys to help them make decisions or to make decisions on their behalf

    legacy

    An amount of money or property left to someone in a will.

    letter of wishes

    Supplementary to a trust or will. Provides guidance to executors and trustees as to how they are to distribute an estate or administer a trust

    life interest trust

    A form of right, usually under a trust, that lasts only for the lifetime of the person benefiting from that right. A person with a life interest is known as a life tenant. A life interest ends when the life tenant dies.

    life tenant

    A beneficiary entitled to a life interest under a trust to receive income but not capital from the trust fund for life

    litigation

    The process of taking legal action

    means-tested state benefits

    A means-tested benefit is a payment available to people who can demonstrate that their income and capital (their 'means') are below specified limits.

    mitigating

    To make something that is bad less severe, serious or painful

    mitigating tax

    Reducing a tax liability

    perpetual

    Never ending or changing

    personal property

    Property other than freehold land, so including leasehold land (sometimes called chattels real), chattels (or personal chattels), choses in action.

    personal representative

     Legal owner of the estate but subject to equitable duties to collect in the estate, pay debts and taxes, pay legacies and then distribute the net residue to the persons entitled.

    philanthropy

    The desire to promote the welfare of others, expressed especially by the generous donation of money to good causes.

    power of attorney

    A document by which you can appoint someone to make decisions on your behalf.

    pre/postnuptial agreement

    An agreement made by a couple before/after they marry concerning the ownership of their respective assets should the marriage fail.

    probate

    The official proving of a will (showing it is valid)

    Proprietary estoppel

    A legal principle that provides a remedy where one party does something, or declines to do something, because they rely upon a promise by another party and that promise is broken. For this to apply, the breaking of the promise must cause a detriment to the party who relied on the promise so that it would be unconscionable that the promise not be put into effect.

    real property

    Freehold land.

    remainderman

    A beneficiary entitled to the capital of the trust fund at the death of the last life tenant.

    ring-fenced assets

    A ring fence is a protection-based transfer of assets from one destination to another. Commonly used within a trust structure, a ring fence can protect assets from inclusion in a beneficiary's calculable net worth, lower a beneficiary’s tax consequences or control which people can benefit from the assets.

    settlor

    A person who creates a trust, normally by transferring ownership of property to a trustee but, exceptionally, by declaring himself or herself to be trustee of clearly identified property already owned.

    spousal-bypass trust

    A Spousal Bypass Trust is a means of paying death benefit from a pension into a trust arrangement which can help minimize the 40% charge to tax on the surviving spouse’s/civil partner’s estate whilst ensuring that the surviving spouse/civil partner (or indeed other nominated people) may benefit from the funds held in the trust from income and capital distributions.

    statutory

    A law or authority set out in legislation, normally by an Act of Parliament. 

    tax liability

    Amount owed to a taxing authority as the result of a taxable event.

    testamentary

    Contained in a Will. Taking effect only on death

    testamentary freedom

    The ability of a person to give their assets to whoever they choose, without restriction

    testator/testatrix

    A person who creates a will. Sometimes referred to as a ‘will-maker’

    the care act

     An act to reform the law relating to care and support for adults and the law relating to support for carers, to make provision about safeguarding adults from abuse or neglect, to make provision about care standards, to establish and make provision about Health Education England, to establish and make provision about the Health Research Authority, and for connected purposes.

    threshold

    A level that must be exceeded to trigger an event

    trust

    Legal instrument which appoints trustees to hold assets for the benefit of a beneficiary or beneficiaries

    trustee

    A person holding assets or property for the benefit of beneficiaries

    will

    Testamentary document completed by a testator. Appoints executors to administer deceased’s estate on death and sets out how an estate should be distributed

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