We have put together some common terms used in the will making process and in connection with probate and trusts and an explanation of what they mean:
Administrators: someone appointed by law to settle your affairs if you die without a will.
Affidavit: a formal sworn statement of evidence. It is a means of giving evidence in writing rather then the witness box and is used as part of the process of applying for a grant. See grant below
Bare trust: A trust that holds assets for beneficiaries who are absolutely entitled. The trustees are just caretakers and have no say in who benefits.
Beneficiaries: anyone who receives a benefit from an estate.
Bequest: a gift in left in a Will - see Legacy below
Chattels: Personal possessions
Codicil: a legal document adding to, or altering an existing Will
Crown or Treasury: The Government. Where your money and property go if you have not made a will and have no next of kin.
Devise: A gift of land including a house
Disabled Beneficiary: Certain tax benefits are given to those who fall within the definition of disabled i.e. one who receives Attendance Allowance, the highest or middle care component of Disability Living Allowance, or with a ‘mental disorder' which prevents their looking after their affairs
Disabled trust: a special kind of discretionary trust used where a disabled beneficiary is to be benefited, often called a "primary beneficiary "Because of the restricted definition of disabled it may not always be a suitable trust to use on every occasion
Discretionary trust: the document that sets up the trusts says who may benefit, often quite a long list. The trustees decide who actually benefits in the light of circumstances then applying. Can be very flexible and is particularly advantageous if there are disabled beneficiaries or children
Estate: the total value of everything you own at your death, less any outstanding commitments
Executors: the people you choose to ensure the instructions in your Will are carried out. They can be a solicitor from Samble Burton & Worth, a friend or a family member or a combination.
Grant of probate: A court order made confirming a will is valid and authorising the executors to deal with the estate
Grant of letters of administration: This is a court order made where there is no will (an intestacy) authorising next of kin as administrators to deal with the estate of the person who has died
Inheritance Tax: a 40% tax payable on estates over the tax free limit.
Intestacy: the name for the situation that arises when someone dies without making a will.
Legacy: a gift left in a will. Otherwise called a bequest. Legacies can be...
- A Specific legacy: a gift of a definite object or property,
- A Pecuniary legacy: a gift of a specific sum of money or,
- A Residuary gift: a gift left when other legacies and expenses have been paid
Life interest: A gift of money, investments or assets, such as a house, where one person(sometimes called the life tenant) gets to use these assets or spend the income or interest from the money while they live but does not get the actual assets or money. Those assets etc. can then be passed on to other beneficiaries after the life tenant dies. It can be particularly useful in second marriages or cohabiting partnerships to look after a spouse or partner but then to pass assets to the children of the first marriage.
Mencap: The leading charity helping those with learning disabilities. Samble Burton & Worth are on Mencap's list of specialist solicitors dealing with families who need wills and trusts for the learning disadvantaged .
Next of kin: the relatives who benefit if you die without a will. The law sets out a table laying out the ranking of relatives and the order in which they benefit. If you have no will relatives in that table will benefit, whom you may not even know or whom you cannot stand
Personal Representatives: An expression which refers to executors if there is a will or administrators if there isn't
Pilot trust: This is a trust you set up during your life directing that money is to be held for beneficiaries. Often the pilot trust is set up with a nominal amount in it and you add to that later in your will. It can be advantageous(for inheritance tax reasons) for people with very big estates or for families who have members who are unable to deal with their own affairs because they have learning disability, learning difficulties or have been diagnosed with conditions such as, Angelman Syndrome ,Autism ,Austic Spectrum disorder, Developmental delay, cerebral palsy, Downs Syndrome, Edward's Syndrome , Fragile X or Profound and Multiple Learning Disability(PMLD).
Potentially Exempt Transfer: Gifts can be subject to inheritance tax even if made in your life time. If you make a gift and live for seven years then that gift may not be taxed . Gifts to some trusts are not now potentially exempt.
Probate: - the legal process to get a grant, see above
Testator/Testatrix: you, the person making the will, testators are chaps and a testatrix is a girl
Trust: an arrangement you can make so that persons chosen by you(trustees) hold money provided by you to administer as you have directed and for the benefit of beneficiaries you have specified. Significant tax advantages can be obtained by using trusts. If you have a vulnerable beneficiary money can be protected for their use by being held in the trust.
Trust deed or Trust Instrument: a document that sets up a trust, appoints the trustees declares who is to benefit and sets out the trust's rules and constitution. If the trust starts from death the trust instrument is a will, if whilst you are alive it is a trust deed
Trustee: is a person trusted by you to run your trust. It is an important and responsible position.
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