This guide explains some commonly used conveyancing terms. If you encounter these words during the course of your transaction and are not wholly certain of their meaning or effect, please do not hesitate to ask for clarification.
The person or people appointed to administer the estate of a deceased who dies intestate (without a Will)
The amount which individuals can transfer per year free of Inheritance Tax.
Anything owned at death i.e. property, bank accounts, shares, ISAs etc.
A person acting in the best interests of a Donor (the person creating the power) under a lasting power of attorney. This can be when the donor has capacity or when capacity is lost.
Legal case which established the test for testamentary capacity considering whether a testator understands the nature and effect of making a Will, the extent of their estate and any claims from those who may expect to benefit from the Will.
Someone who is entitled to benefit from a Will or Trust.
Inheritance Tax relief on business assets.
Having the mental capability to make decisions to put a valid legal document in place.
The basic asset of an individual used to generate income or held as an investment.
A donation made to a non-profit, private foundation, or charity.
A gift on which Inheritance Tax may be payable.
A document which makes valid alterations to an existing Will.
Where an estate is left unequally which may give rise to claims against the estate when the individual passes away.
A formal objection raised against the validity of a Will.
A gift which only takes effect if a certain condition is met.
The Court which makes decisions on financial and welfare matters for people who cannot make decisions at the time they need to be made (they lack mental capacity). The Court may also choose to appoint someone as a ‘deputy’ to make such decisions.
A person or company to whom money is owed.
A person or company who owe money to an individual, trust or estate.
A document which allows beneficiaries named in a Will to make changes to the distribution of an estate.
Intentionally decreasing overall assets in order to minimise or defend against third party claims against the estate.
Someone who has been appointed by the Court to manage the affairs of someone who lacks the mental capacity to make decisions relating to their property and finance and health and welfare matters.
The act of a testator burning, tearing or otherwise destroying their Will with the intention to revoke it.
The act of a beneficiary refusing to accept a legacy if they have yet to receive any benefit from it.
A trust where the beneficiaries and their entitlements are determined at the discretion of the trustees.
The act of administering the terms of a Will once all assets have been realised and all debts paid.
The country that a person treats as their permanent home.
The person who has created a Lasting Power of Attorney and appointed attorneys to act in their best interests and make decisions for them in relation to their property and finance and health and welfare matters.
A legal document enabling a donor to appoint attorneys to make decisions regarding their property and financial affairs. It has not been possible to create an EPA since October 2007 when Lasting Powers of Attorney were introduced.
The final preparation of a Will or legal document for signature.
A person’s assets, entitlements, and obligations at the time of death.
Someone appointed in a Will to take legal responsibility for carrying out the instructions left by the deceased in the terms of their Will.
An estate where no inheritance tax needs to be paid.
Someone who acts on behalf or another to manage money or property with responsibility and good faith.
Where an aged or seriously ill testator requires a Will, a medical practitioner will need to carry out an assessment and provide a written report in relation to the mental capacity of the testator.
The grant of representation obtained by the personal representatives where there were no executors appointed in the Will or the appointed executor is unwilling or unable to act, but all other aspects of the Will are to be carried out.
A document issued by the Court to confirm the executor’s authority to deal with the estate and validates the Will.
The general term for a High Court order that establishes the authority of one or more Personal Representatives to collect in assets and distribute the estate, and either the validity of the Will or the fact that the deceased died intestate.
Someone who is appointed to have ‘parental responsibility’ over a child under the age of 18.
A one-off tax payable when an estate is over the inheritance tax threshold.
Where a person has died without a Will and their estate is therefore distributed according to statutory regulations called the Rules of Intestacy.
Where a person has died without a valid Will.
A legal document which allows someone to make decisions on your behalf in relation to your property and finance and health and welfare matters, when you lack the mental capacity to do so yourself.
A gift under the terms of a Will.
A beneficiary under the terms of a Will whom is to receive a gift of money or a legacy.
A document which is drawn up to accompany a Will or trust which is used to guide those managing an estate or a trust. Letters of Wishes are informal, non-binding documents.
A document which appoints people to administer a person’s estate where there is no valid Will capable of being admitted to probate.
A trust which gives the beneficiary the right of enjoyment either for life, a specified period of time, or until an event has occurred. The beneficiary can receive the right to benefit either by allowing them use of an asset or receiving income from an asset.
A lifetime transfer on which tax is payable at the time of transfer at half of the full IHT death rates. If the transferor dies within 7 years, a further tax charge at the full death rate of 40% is payable but any tax already paid can be offset against this.
Government legislation which provides a legal framework for acting and making decisions on behalf of adults who lack the capacity to make particular decisions for themselves.
Separate Wills executed by two individuals that contain identical terms where each leaves the same gifts to the other and each names the other an executor. Testators are not bound by one another when they create mirror Wills.
A person under the age of 18.
The amount up to which there is no inheritance tax payable on the value of the estate, which is currently £325,000. For couples who are married or in a civil partnership, any unused nil rate band can be transferred to their spouse/civil partner on death, enabling a couple to leave up to £650,000 tax free on second death.
A persons closest living blood relative.
A person appointed as an executor under the terms of the Will who does not wish to play an active role in the administration of the estate. A non-proving executor has the right to prove the Will at a later time.
A requirement to take a particular type of action, that may have a legal basis.
A government body which is responsible for maintaining the register of attorney’s, deputies and guardians, and monitoring their actions on behalf of people who have lost mental capacity.
A gift under the terms of a Will of a fixed sum of money.
A blanket term for executors and administrators.
A lifetime gift from one individual to another that is exempt from Inheritance Tax if the transferor survives 7 years. If they die within 7 years, the transfer becomes a chargeable transfer subject to Inheritance Tax.
Someone who dies before the person who has made the Will.
The legal process of administering the estate of someone on death. This involves organising their money, assets and possessions and distributing them as inheritance after paying any taxes and debts.
Where the executor is paid for their services beyond normal ‘out of pocket’ expenses.
A proposed executor of a Will who does not wish to take up their appointment.
The individuals who receive the remainder of an estate after all other legacies, liabilities, tax, and expenses have been paid.
The remainder of the estate after all specific and pecuniary legacies, liabilities, tax, costs, and disbursements have been settled.
An additional tax relief for main residences left to descendants i.e. children and grandchildren (can also include stepchildren).
The act of cancelling a legal document.
The person who establishes a trust, held and administered by a trustee for the benefit of another.
Someone who owns an asset by themselves as a whole.
A gift of a particular item, not including money.
An advertisement that is placed in the local media and London Gazette before distributing an estate to allow any missing beneficiaries or creditors to the estate to come forward within a 2-month period.
When assets are jointly owned and one owner dies, the asset will automatically pass to the surviving partner.
A percentage reduction in the tax which would otherwise be payable on a transfer.
When a person dies leaving a valid Will.
The person who is making a Will.
A Trust is the formal transfer of assets to a small group of people or to a trust company with instructions that they hold the assets for the benefit of others. If the trust is to be made during a person’s lifetime, it is usually accompanied by a trust deed.
A person or firm that holds or administers property or assets for the benefit of a third party.
The act of someone forcing or coercing an individual into making a Will in a particular way.
When a person is legally entitled to what has been left to them in a Will.
A legal document which sets out how an individual wishes to dispose of their assets after their death.
