Jargon Buster

Administrator

Someone who is appointed by law to settle your affairs if you die without a Will.

Beneficiary

Anyone who receives from a Will.

Codicil

If you want to amend an existing Will, you can add a codicil. However, it’s often just as easy and no more costly to make a new Will.

Crown or Treasury

This is the government, which receives your estate if you die without a Will and with no next of kin.

Estate

This is the total value of everything you own at your death, minus any outstanding commitments.

Executor(s)

The people you choose to carry out your wishes as specified in your Will. You may choose up to four executors.

Gifts with Reservation of Benefit

A gift with reservation of benefit is one where the person who donates the gift still retains (or reserves – i.e. the ‘reservation’) some benefit in relation to the gift.

Inheritance Tax (IHT)

The 40% tax payable on assets above the IHT threshold of £325,000 (2009/10 tax year). Legacies to charity are free of Inheritance Tax.

Intestate

When someone dies without a Will.

Pre Owned Asset Tax (POAT)

This is an Income Tax charge on the donor where an asset has been given away at any time since 17th March 1986, but the donor continues to use it, in situations where the transaction is not treated as a gift with reservation.

Probate

The legal process to establish that your Will is valid.

Testator (male)/ Testatrix (female)

This is you, the person making the Will.

Trust

An arrangement you can make in your Will to administer part or all of your assets after your death and the administration of your estate.

Witness

Two witnesses must see you sign your Will and you must watch both of them sign it. They must also watch each other sign it. No beneficiary (or their spouse) should sign the Will. If they do, any gift to them will be invalid. There are stringent rules attached to the signing of the Will to ensure that it is valid, so seek professional advice if necessary.

These pages give a general overview of the issues surrounding Estate Planning and are based on our understanding of the current laws and tax regulation for England & Wales, which may be subject to change. They are not intended to give advice and you should seek professional advice when planning your estate.