Estate planning is the process of identifying your assets, protecting your beneficiaries, and setting forth a plan for how you want your assets distributed when you pass away. As you come across different legal terms in estate planning documentation, it can be difficult to know what they mean. Have you ever felt confused by some of the jargon and legalese?
At RRK, we’ve put together a glossary of some of the most common estate planning terms and phrases you’ll come across, helping you to demystify the terminology and focus on just one thing: protecting your loved ones and ensuring your wishes are accurate represented.
Read on below, and let’s get you up to speed!
Will
A will is a legal document that lays out the wishes of an individual on their passing. It’s used to distribute your estate across those you wish to support beyond your life.
Testator
Testators are the person who has written and executed a will after their passing.
Estate
The estate is the net worth of a person, including their property, wealth, assets, and possessions. Your estate is what gets shared out through your will.
Attorney
Attorneys are lawyers who are legally entitled to act on behalf of someone else. Attorneys might represent you in court, or help you put together your will.
Probate
Probate is the process that occurs after someone passes with a written will. Through court, the granting of probate proves the validity of the will in order to ensure it is a true reflection of your last wishes.
Executor
After we pass we need someone to help deal out our estate. Executors are the person we entrust to do this, carrying out our last wishes with legal authority.
Beneficiary
Beneficiaries are anyone who is listed to receive a portion of an estate. They may receive ownership rights of a property or a vehicle, or receive funds through a variety of methods.
Fiduciary
A fiduciary is someone who holds legal responsibility with another party. In relation to your will, this might be someone who takes care of the assets a child has received from a will until they become an adult.
Trust
A trust is a legal relationship set up as part of your will, which holds assets on behalf of one or more beneficiaries. For more about trusts, head to our blog at https://rrklegal.co.uk/4-types-of-trusts-why-they-are-useful/.
Trustee
Trustees are the legal owner of the assets and funds held in a trust, charged with following the wishes you set out within it and ensuring people receive the support set out in the trust deed.
Funeral expenses
When you pass on, the cost of your funeral is usually drawn from your inheritance before it is passed on. This will be deducted before inheritance tax is paid, so it won’t be taxed.
Intestate/intestacy
If you pass intestate, it means you have passed on without a valid will. When this happens, your estate is shared out across your family according to the 1952 Intestates’ Estates Act. For more information on that, head to https://rrklegal.co.uk/what-happens-if-you-die-without-a-will/
Bequest
A bequest is a gift other than land or property made in a will. This could take the form of a financial gift, or things like stocks and bonds. Bequests can also be conditional, ‘locking’ gifts behind certain milestones like turning 18 or completing a stage of education.
Codicil
A codicil is a supplement to your wills, usually used to alter an existing will when circumstances change. For more information about when you should amend your will, check out our blog at https://rrklegal.co.uk/when-should-you-update-your-will/.
Disinherit
To disinherit someone in law means to formally cut them off from inheriting your property. As family members tend to inherit thanks to legal precedent, formally disinheriting them is required if you don’t wish for them to receive any of your estate.
Sideways inheritance
The first person to inherit when you pass is your married partner, unless you’ve specifically stated otherwise in your will. Sideways inheritance refers to the passing of your estate to your partner, rather than your children. This is particularly relevant for those who remarry, as they need to ensure
Power of attorney
A power of attorney is a legal document that sets out one person’s right to make decisions for another or act on their behalf. This is particularly important in the context of wills for setting out who is responsible for caring for someone with lasting illnesses like dementia. You can read about lasting powers of attorney here https://rrklegal.co.uk/what-are-lasting-power-of-attorney-documents/
Funeral plan
Funeral plans are a way to pre-pay for funerals. Providers provide a variety of payment plans to spread out the cost over time. One of the reasons why funeral plans are becoming more popular is because of the rising cost of funeral services. By prepaying, you lock the cost of your future funeral to the current cost.
Guardian
A legal guardian is someone who is appointed to legally care for a child after their parents pass. It’s recommended to specify legal guardians within your will so you can ensure that your children are properly cared for.
Incapacity
Incapacity in law means that someone is either of unsound mind or under the age of 18. The validity of a will requires the capacity of the person writing it, meaning that this responsibility can pass onto their family. Incapable people are also often not able to directly inherit, particularly those under the age of 18, meaning that their share of the estate will be protected through processes like trusts.
Inheritance tax
In the UK the value of your estate is taxed upon your passing. The current standard rate for inheritance tax is 40% above £325000, although there are a variety of caveats that can alter this. For complete information on the current UK inheritance tax system, visit https://www.gov.uk/inheritance-tax
Joint ownership
When something is jointly owned, ownership of it is shared across numerous people. For estate planning it’s particularly relevant in the context of homes. Beneficial joint tenants co-own a home, but their ownership is not defined as a percentage. In this scenario, one co-owner cannot give their share away through a will. Tenants-in-common, on the other hand, own a defined percentage, and can give away their share.
While this list is far from exhaustive, we hope it has given you a little insight into some of the terms and concepts used in the world of legal documents and estate planning. At RRK Legal, we’re here to make the estate planning process simple and stress-free, keeping our services free from complex jargon and making the legal process as transparent as possible so that you can feel confident in your decisions. If you have any questions, please don’t hesitate to reach out to our friendly estate planning team!
To find out more, contact us today at https://rrklegal.co.uk/contact-us/.
Website: www.rrklegal.co.uk
Email: info@rrklegal.co.uk
Telephone: 01215460771
