Hugh James

Glossary of Terms

 

Glossary of Terms

Beneficiary: Anyone who benefits from a Will

Codicil: To change an existing Will you can add a codicil (document that is executed in the same way as a will and is supplemental to that will).  We recommend you simply draft a new will.

Crown or Treasury:  The government. If you do not have a Will and have no close family, the Crown receives the benefit from your estate.

Equitable Charge:   An equitable charge will need to be prepared if the deceased’s half share in the matrimonial property forms part of the IOU (see below).  The charge will only be in relation to the deceased’s one half share of the property.  The document makes provision for the deceased’s Trustees to discharge the Charge over the property should the IOU be repaid.  The executed charge document should be placed with the title deeds to the property.

Estate:  The total value of everything you own at your death, less any debts.

Executor/Executrix (Male/Female):  The people you choose to carry out the instructions in your will.  This can involve obtaining Probate, selling the various assets in your estate before distributing it in accordance with the will.

Funeral arrangements:  Directions you can give in your will regarding your wishes such as details of your burial & funeral service.

Grant of Probate:  Document giving the executors appointed in the will the authority to deal with the estate.

Guardians:  Person or persons charged with the responsibility of looking after any minor children you may have following your death. You can only appoint a guardian if you yourself have parental responsibility for your child. If you and the other parent of the child were married to each other at the time of the child's birth, both parents have "parental responsibility" for the child. If not, the mother of the child has parental responsibility for the child but not the father unless he acquires it by Court Order or by agreement between the parents under the terms of the Children's Act 1989 Section 3. If you have parental responsibility for your child and you appoint a guardian for the child and there is no other parent of the child surviving you who has parental responsibility for the child, your appointment of a guardian for the child will take effect straightaway on your death. If there is a surviving parent who does have parental responsibility for the child, the appointment will not take effect until that surviving parent dies. The exception to this arises if you have a residence order for your child in which case any guardian who you appoint will act jointly with the surviving parent as from the date of your death.

Inheritance Tax:   A 40% tax payable on larger estates (estates over £312,000). Gifts between spouses or civil partners and gifts to a charity are free from Inheritance Tax.

Intestacy:  The name for the situation that arises when someone dies without making a Will.

IOU:  A loan agreement between the surviving spouse, the Executors of the Will of the deceased spouse and the trustees of the deceased spouse’s Nil Rate Band Discretionary Trust. The agreement will include the loan amount together with provisions for the amount to increase in line with the Retail Prices Index. It includes provision as to how the outstanding amount is to be calculated.

Joint Assets:  Assets held in joint names with another person, whether it be an interest in land or cash and investments, e.g., a bank account held in the joint names of a married couple or civil partners. On death, any interest in property held by the deceased as joint tenant with another passes by survivorship to the surviving joint tenant. It would not pass under the terms of the will. 

Joint Tenants:  Each owner has an interest in the whole of the property. If one owner dies their interest automatically passes to the other. This is known as the right of survivorship. The interest of a joint tenant can never pass under his or her Will or in the event of there being no Will, in accordance with the Rules of Intestacy.

Legacy:   A gift in a Will.

It can be a:

Letters of Administration:  Document giving the personal representatives of an intestate the authority to deal with the estate.

Principal Beneficiary:  Person or persons to whom the residuary estate is initially left.  In the event of the principal beneficiary/beneficiaries predeceasing you, the residue will pass to the substitute beneficiary/beneficiaries.  If, for example, the testator wished to leave everything to his wife and in the event of her predeceasing him, everything to his brother, his wife would be the Principal Beneficiary, with the brother as the Substitute Beneficiary.

Probate:  The legal process to establish your Will is valid. If there is no valid will, then the process by which an administrator is appointed.

Specific legacy:  A gift of a particular item or group of items owned by the testator, distinguished in the will from other assets of the same kind, for example: ‘I GIVE my diamond and sapphire brooch to X’; ‘I GIVE all my jewelry to Y.’ Care must be taken to describe the property as clearly and accurately as possible.  If the asset cannot be identified from the description in the will, the gift may fail due to uncertainty.

Tenants in Common:  Each co-owner owns a one half share in the property, or such other share as is agreed and recorded in a legally binding deed signed by all the co-owners. Each co-owner can dispose of their share independently of the other. On the death of a co-owner their share will not automatically pass to the other, but will pass to their personal representatives or as determined in their Will

Testator/Testatrix (Male/Female):  The person making the Will.

Trust:  An arrangement you can make in your Will for the continued administration of the whole or part of your assets, typically until children reach the specified age for their inheritance.

Witness:  Two witnesses must see you sign your Will and you must also watch both of them sign it. No beneficiary (or a beneficiary’s spouse or civil partner) should sign the Will; if they do any gift will be invalid and will fail.

 

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