Wills Jargon Buster 02-Sep-2020
A Will is something that everyone should have; yet only about a third of people do. Making a Will ensures that when you die, your property and affairs will be dealt with in-line with your wishes.
Writing a Will entails a lot of legal jargon, however once you have a handle on the terminology and a great legal team guiding you, they are quite easy to understand.
With this in mind we present to you our Wills Jargon Buster.
A legal document that sets out what happens on your death, including who is responsible for dealing with your estate and the distribution of your assets.
If you die without a Will in place the rules of intestacy apply. These legally define who can deal with and receive from your estate. For example, if you are not married or not in a civil partnership, your partner would not be able to inherit from your estate, regardless of the length of your relationship.
The person who makes the Will (or instructs a lawyer to make the Will on their behalf). In old fashioned documents, the term “testatrix” is sometimes used to described a female testator.
The people who you appoint in your Will to deal with your estate, settle your debts and distribute your assets. In old fashioned documents, the terms “executrix” and “executrices” are sometimes used to describe female executors.
A codicil is a legal document that makes changes to a Will. It is signed and witnessed in exactly the same way as a Will.
Your estate is the collective sum of all your money, possessions and property. Depending on the circumstances, it can also include your share of any jointly owned property.
A legal arrangement for an asset or assets to be held by one or more persons for the benefit of others, for example you could set up a trust that would provide income for your spouse after your death.
The persons appointed to hold the asset or assets on trust for the benefit of others. These are often – but do not have to be – the same people as your executors.
A person named by you in your Will who you want to be responsible for your children if you die before they are 18.
A person named in the Will who will inherit from the estate.
A gift of cash left to a beneficiary.
Leaving a specific item, to a specific person, such as a gift of any personal belongings.
The remainder of the deceased’s estate after the payment of tax, liabilities and the distribution of all legacies as set out in the Will. This portion of the estate is usually left in whole or in shares to specific persons named in the Will.
The tax payable on the deceased’s estate. Inheritance Tax can be complicated, but usually arises only if the estate is valued over £325,000, it is charged at a rate of 40%.
Gifts to spouses, civil partners and charities are usually exempt from Inheritance Tax.
If the estate is worth £325,000 and you leave more than 10% of your estate to charity, the Inheritance Tax rate is reduced to 36%.
A flexible trust that allows your trustees to decide when it is appropriate to distribute your estate to your beneficiaries and how much each should receive.
Nil Rate Band Discretionary Trust
These trusts were often used in the late 1990s and early 2000s as a form of tax planning. They place up to £325,000 from your estate into a discretionary trust. This approach to estate tax planning is much less used nowadays, if you have a Nil Rate Band Discretionary Trust in your Will, you may wish to review this.
If you would like a free initial consultation to discuss writing or reviewing your Will with one of our specialist team contact us on 01244 356 789 or email firstname.lastname@example.org
Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.