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  • Wills – Legal Jargon

    Assets

    An Estate will consist of assets, which includes everything that was owned by a person who has died.

    Beneficiary

    This is someone entitled to a share of the Estate.

    Bequest

    A gift of a particular item or cash as opposed to land or buildings.

    Capital Gains Tax

    Capital Gains Tax (CGT) is a tax on the profit made when selling an asset. Each person has an annual CGT allowance for tax free profits. For the purpose of an Estate, Beneficiaries may have a CGT liability on an asset that they inherit which they later sell.

    Chargeable gift

    An item given in a Will on which tax may have to be paid.

    Chattels

    Any movable (not land or buildings) personal property not used for business, e.g. furniture, jewellery, clothes and cars.

    Codicil

    An addition or change made to your Will. A Codicil has to be signed and witnessed in the same way as a Will.

    Deed of Variation

    A document which varies a Will or the provisions of intestacy after a person has died.

    Discretionary trust

    This is a trust whereby the Trustees have full power to decide when and which members of a group of Beneficiaries are to receive a share of the Estate.

    Estate

    This is the term used to describe the property, money, investments, savings and personal possessions of a person who has died.

    Executor

    This is the person who is appointed in a Will to administer an Estate. There can be a maximum of four Executors. Executors can be Beneficiaries to a Will.

    Guardian

    This is the term used to describe the person that is appointed under a Will to look after the minor children of a person.

    Inheritance tax

    The term Inheritance Tax (IHT) describes the tax which may be payable on an Estate when someone dies.

    Intestacy

    This is the term used to describe when a person dies without making a Will. There are laws setting out who is to benefit from an Estate in such instances.

    Legacy

    A gift left in a Will. There are generally three types of legacies:

     

    Liabilities

    The debts that need to be settled by the Estate, including funeral expenses, loans, credit cards, income tax and utility bills.

    Nil Rate Band Allowance

    The amount that can be passed to Beneficiaries without paying Inheritance Tax. For 2013/2014, this is £325,000.

    Probate

    The term used to describe the procedure of administration of an Estate up to and including the application of the Grant of Probate.

    Residuary Beneficiary

    This is the person or persons that are entitled to receive a share of any Residue of the Estate, under the terms of the Will or on intestacy.

    Residue

    This is the element of an Estate that is left after any specific gifts are made, and the deduction of the Liabilities in the Estate.

    Renunciation

    This is the term used to describe when an Executor decides that they are unwilling or unable to act as the Executor.

    Testator/Testatrix

    This is the term that describes the person who makes a Will. A Testator must be over 18 years of age and of sound mind at the time of making the Will.

    Trust

    An arrangement set up by Will or Deed. Trustees are appointed and given money or assets to hold and manage for defined Beneficiaries.

    Trustees

    They are responsible for the management of any Trust that arises out of a Will. Generally, a Trustee will exercise their duties where there are assets held in trust for Beneficiaries who are below the age of 18.

    Witnesses

    A Will is always subject to two witnesses having verified the signature of the Testator or Testatrix. They have to sign the Will at the same time as each other and also at the same time as the Testator or Testatrix.

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