Probate & Estates – A Glossary of Terms

A

Administrator – An administrator is the person who oversees the administration of an estate, where there is no valid Will or where no executor has been nominated to perform the task.

Assets –  Assets refer to the possessions, investments, savings, property and personal effects belonging to the deceased.

 

B

Beneficiary – An individual who stands to benefit/inherit from the estate of the deceased, whether via a Will, a codicil/ amendment or, where there is no Will, the rules of intestacy.

 

C

Codicil – A codicil is a document that details amendments made to part of a Will, without the Will being rewritten in full.

Creditors – People or businesses to whom the deceased owes money.

Crown – The Crown is the beneficiary of an estate in the event that the deceased party died intestate and without any relatives.

 

D

Debtors – People or businesses who owe money to the deceased.

Deed of variation – This is a legal document that allows beneficiaries to alter certain terms of an existing Will. A Deed of Variation must be made within two years of death.

Disbursement – A ‘disbursement’ refers to any payment that is made to a third party.

Discretionary Trust – A Discretionary Trust is a way of managing assets, whereby a trustee, instead of the settlor, determines how and when certain beneficiaries will receive their income and/or capital.

Downsizing – An additional relief that may be available if somebody has downsized or sold their principal residence prior to death, which otherwise would have been covered by the Residential Nil Rate Band.

 

E

Estate – A term used to describe a person’s assets and property.

Estate accounts – Financial accounts which document what monies have been received/paid by the estate. The estate accounts also identify what assets and funds have been and are now due to be paid to the beneficiaries.

Executor – This term refers to the person or institution that is appointed, by a testator, to carry out the terms of their Will and administer the estate.

 

G

Grant of Letters of Administration – A Grant of Letters of Representation is awarded in cases where the deceased has died intestate.

Grant of Probate – A Grant of Probate is awarded in cases where there is an existing Will.

 

I

IHT 205 – A form used to submit information to HMRC when the estate in question is small.

IHT 400 – The standard form used to submit information to HMRC, which contains detail about the deceased and their assets and liabilities. It will show how much IHT has to be paid.

Inheritance Tax (IHT) – Inheritance Tax (IHT) is the tax payable on the value of an estate at death and lifetime transfers within the previous seven years.

Intestacy Rules – These are the rules governing the apportioning and administration of a deceased individual’s estate, in the event that he/she has died without having created a Will.

Intestate – ‘Intestate’ refers to a person having died without leaving a valid Will.

 

L

Letters of Administration – Where there is no Will and no executors, this document, which is issued by the Registrar, outlines who will handle the administration of the estate forthwith.

Liabilities – Monies or debts that are owed by the estate.

 

M

Moveable property – Any material possession, other than buildings or land.

 

N

Nil-Rate Band – This refers to the value of an estate that can be passed to beneficiaries without incurring any Inheritance Tax charge.

 

P

Personal Representative – The executor or administrator that is charged with dealing with an estate.

Probate – The legal and financial process which occurs following a person’s death. This can also be referred to as ‘administering the estate’. It is not until Probate is granted that a Personal Representative can deal with an estate.

Probate Registry – The Probate Registry is part of the Family Division of the High Court. It handles non-contentious Probate matters and is responsible for issuing Grants of Letters of Administration and Grants of Probate.

 

R

Residential Nil-Rate Band – If certain conditions are met, the deceased may be entitled to a further nil rate band in respect of residential property.

Residuary Estate – The ‘net estate’ once debts, expenses and other liabilities have been paid out.

 

S

Settlor – A person who creates a trust, either during their life or via a Will.

Statement of Truth – The declaration to be signed by the Personal Representative, to enable them to apply for Probate.

 

T

Testator – An individual who makes a valid Will.

Transferable Nil Rate Band – The unused element of a nil rate band which the deceased can receive from a previously deceased spouse’s estate.

Transferable Residential Nil Rate Band – The unused element of a residential nil rate band which the deceased can receive from a previously deceased spouse’s estate.

Trust – A Trust is where assets are held or looked after by Trustees for the benefit of one or more persons.

Trustee – A person/s who look after and manage the Trust and the Trust assets until such time as the Trust is brought to an end.

 

W

Will – A Will is a legally enforceable document which details what an individual wishes to happen to their estate and assets after death.

 

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Accountancy

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Accountancy