| Here are some of the terms you’ll encounter, when discussing Estate Planning or making your Will. For obvious reasons, it can’t be a complete list – so don’t hesitate to ask us, if you want more advice.
Estate. Everything you own at the time of your death, including your business assets.
Executor. A person(s) of 18 or over, appointed by you to carry out your wishes as stated in your Will; they may also be beneficiaries. In many cases it is advisable to appoint a professional Executor, to help family Executors.
Trustee. A person(s) you appoint to manage Trust assets on behalf of beneficiaries, who are very often children. Trustees can be the same people as the Executors. You are able to specify their powers.
Guardian. A person(s) you appoint to look after your children if they are under 18 at the time of your death. It is wise to nominate a reserve. Ideally a Guardian will also be an Executor. You should make financial provision for the care of your children.
Parental Responsibility. A father who was not married to the mother at the birth of a child, born before 1st December 2003, has no automatic parental responsibility in law for the child, so cannot appoint guardians. There are ways to rectify this.
Beneficiary. A person(s), charity, or organisation that will receive something from you, in your Will.
Legacy or Bequest. A specific gift of money, an item, property, or business assets that you leave to a beneficiary.
Home Ownership. Property can be owned solely or jointly. When jointly owned, it may be held as Joint Tenants or Tenants in Common. The type of tenancy can be changed to improve your opportunity to protect your home from a variety of threats.
Will Trust. A legal instrument, used in a Will, to ensure that certain assets are protected for chosen beneficiaries and to mitigate your liability to Inheritance Tax.
Inheritance Tax (IHT). A tax paid on assets at death, currently charged at 40%, on the value of your estate above £312,000. Some exemptions and reliefs are available.
Residue. The remainder of your estate after all debts, taxes, expenses, legacies and bequests have been paid. A Residuary Beneficiary receives a share of your residuary estate.
Probate. The process, after your death, by which your affairs are settled and your Will is validated. Your Executor(s) will obtain a Grant of Probate before they an distribute your estate as you have instructed.
Intestacy. The term used when a person dies without a Will. Partial Intestacy describes circumstances when parts of a Will are incomplete or insufficient in their provision.
Power of Attorney. The Mental Capacity Act 2005 enables people to plan ahead for a time when they may not have mental capacity. It provides for decisions to be made on behalf of those who lack mental capacity. This means that you, as the donor, can give someone else (an attorney) the power to act for you should you lose the mental capacity to manage your own affairs and personal welfare. Although an Enduring Power of Attorney (EPA), made before 1st October 2007, continues to be valid, it has been replaced by a revised type of power – the Lasting Power of Attorney (LPA) which offers better safeguards to the donor and wider coverage.
Advance Decision. Also known as a ‘Living Will’. In case you should become so ill or severely incapacitated that you are unable to express your wishes about the type of treatment you wish to receive or to refuse, you can express them in advance in this separate document.
Medical Donation. You may wish to give your body, or parts of it, for medical research, training or transplant. Details may be included in your Will.
Funeral Wishes. Help your executors, by setting out in your Will the basic arrangements you wish to be made for your funeral. For instance, do you wish to be buried or cremated, to have your ashes buried or scattered, a service to follow a particular religious rite etc?
Witnesses. Two independent witnesses must see you sign your Will; they do not have to read it. They must not be a beneficiary of your Will nor married to or a Civil Partner of a beneficiary.
Safeguarding your Will. A damaged, marked or lost Will is as bad as having no Will. The worst place to keep your Will is at home, unless it is in a fireproof safe – so consider where you will keep it and your other important documents.
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