Wills, Probate And Administration

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Administration

Dealing with the affairs and estate of a person who has died including collecting their assets, paying their debts and paying the residue to the people who are to benefit.

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Affidavit

A document giving evidence which is sworn in front of a Solicitor or other person who can administer Oaths.

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Agricultural Property Relief (APR)

Relief from inheritance tax for the agricultural value of some farms and farmhouses Various conditions apply including a minimum ownership period.

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Beneficiary

A person or organisation who will receive assets from the estate of the deceased.

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Bequests and Legacies

Bequests and legacies are names for gifts lefts in a Will.

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Business Property Relief (BPR)

Relief from inheritance tax for businesses – a minimum ownership period applies and the business or interest in the business must fulfil the conditions.

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Capital Gains Tax (CGT)

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This is tax which may be payable on a disposal if you make a chargeable gain. Usually you have made a gain if the asset is worth more at disposal than it was when you acquired it. A disposal is not only a sale for moneys worth. You will only pay CGT on capital monies ie monies that you received that do not form part of your income. The tax applies not to the value of the asset but to the increase in value.

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Caveat
A notice entered at the Probate Registry, for example if you have entered a Caveat you will be warned before any Grant of Representation is issued.

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Chattels
Assets of a person other than land for example jewellery, ornaments, clothes, cars, animals, furniture and so on.

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Charity
A Charity is an organisation that has as its aim purposes are exclusively “charitable” for example the relief of poverty or promoting education. Charities can be structured in a variety of ways – for example as a company with a board of directors or as a trust fund with a board of trustees. Charities must be for the public benefit. Most Charities must register with the Charities Commission. Charities are strictly regulated

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Codicil
An addition to a Will which may change, modify, delete, extend or add to a Will.

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Court of Protection

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This is a Court which can make decisions in relation to the property and affairs and personal welfare of adults (and children) who lack the mental capacity to make decisions for themselves. The Court has the same powers as the High Court and can make a wide range of decisions and orders including the appointment of Deputies or a declaration as to whether a person has capacity.

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Deed of Variation
A document that can vary the division of a person’s estate after they have died either by changing their Will retrospectively or altering the persons entitled on an intestacy

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(where there is no Will or the beneficiaries no longer exist). This must be done within 2 years of the person’s death.

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Deputyship
Formerly known as Receivership, this is the process by which the Court of Protection appoints a Deputy to deal with the affairs of a person who has lost mental capacity (i.e. is not capable of managing their own affairs) and did not have an Enduring or Lasting Power of Attorney in place.

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The Office of the Public Guardian keeps a register of Deputies and supervises the Deputy as they manage the affairs of the person who does not have capacity. Deputyship can relate to personal welfare decisions as well as to the management of property and affairs.

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Discretionary Trusts
A trust where the Trustees can choose which beneficiaries (if any) should receive income and or capital. They are a flexible way of setting property aside for the benefit of one or more persons.

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Domicile
Your domicile will affect whether you pay inheritance tax or particular assets and can affect how much inheritance tax you pay. Domicile is not the same as residence.

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Estate

All the property and assets of the person who has died.

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Executor
This is the personal representative (see below) who has been appointed by the Will or Codicil.

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Guardian
A guardian will have parental responsibility for any child (under 18) of whom they are named guardian. Parental responsibility means legal authority to act in relation to a child on such matters as medical care, where they are to live, their education, what surname they should be known by.

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Guardians may be appointed by a parent who has parental responsibility, an existing guardian or the Court. If you name a guardian in your Will the appointment may not take effect if your child has a surviving parent with parental responsibility – for more advice contact Brethertons family team.

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Inheritance Tax (IHT)
A tax on the value of a person's estate on their death and also on the value of certain gifts made by an individual during their lifetime. You may be subject to inheritance tax on all your assets everywhere in the world if you are domiciled in England & Wales.

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Inheritance tax also applies to most types of trusts and may be charged when assets are added to or leave the trusts and on the ten yearly anniversaries of the trust’s creation.

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Intestate/Intestacy

The rules that govern where a person’s estate is to pass and who can deal with the estate in the absence of a Will.

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Issue

Children, grandchildren, great-grandchildren and so on.

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Joint Tenancy

A way of co-owning land and other property. On the death of one of the co-owners the other takes their share by survivorship.

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For example if you and your spouse own your home as joint tenants it will automatically pass to the surviving spouse when one of you dies. Your share of your house will not be part of your estate as it passes automatically.

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Letters of Administration
A grant of representation on where there is no valid Will, or there is a Will but no Executor appointed.

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Personal Representative

The person who is dealing with the administration of the estate of the person who has died.

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Life Tenant

This is a person who is entitled to benefit from a trust during their lifetime. They cannot have the capital in the trust fund;

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they are entitled only to the income or enjoyment of the property for example if the trust fund was a house the beneficiary would be entitled to live there.

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Potentially Exempt Transfer (PET)

This is an outright gift lifetime by an individual to another individual or certain types of trusts.

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If the giver (donor) survives the gift by seven years it will become completely exempt from inheritance tax – it will be outside the donor’s estate for the purposes of calculating inheritance tax.

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Power of Attorney

This a formal document giving legal authority from one person (the donor) to another (the attorney) so that the Attorney may act on behalf of their principal.

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Power of Attorney may be an ordinary General Power or it may be a Lasting Power of Attorney.

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Lasting Power of Attorney
A Lasting Power of Attorney can relate to your property and affairs or your personal welfare i.e. decisions about your medical treatment. In order to make a Lasting Power of Attorney you must have mental capacity to do so which must be certified by a certificate provider.

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An ordinary General Power of Attorney will come to an end if you lose your mental capacity but a Lasting Power of Attorney will not.

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Office of the Public Guardian (OPG)

Formerly known as the Public Guardianship Office (PGO) this Office supports the Public Guardian in helping people who do not have mental capacity by setting up a register of Enduring and Lasting Powers of Attorney and a register of Deputies.

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The OPG supervises Deputies. The OPG works closely with the Court of Protection see above.

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Probate (Grant of)

The ‘Proving’ of a Will by sending it to the Probate Registry.

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Residue

The remainder of the estate of the person who has died after all their debts have been paid and any specific gifts they make under their Will have also been paid.

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Revocation (of Will)
This is the process by which someone cancels or takes back a Will (or Codicil) made previously when they no longer intend that Will to take effect. The Testator (person who made a Will or Codicil) must have mental capacity to revoke the Will (or Codicil). The effect of revocation is that any earlier Will is resurrected and will take effect as if the later cancelled Will does not exist. If there is no previous Will then the person revoking their Will becomes intestate.

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If there is no previous Will then the person revoking their Will becomes intestate. Most new Wills contain an explicit clause stating that they revoke any previous Wills. There are formal requirements for revocation of a Will as there are for making a Will.

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Statutory Legacy
If a person dies intestate with a spouse or civil partner the statutory legacy is the amount of the deceased’s estate that their spouse or civil partner will receive –

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a common misconception is that the spouse or civil partner will automatically receive all of the estate of the person who has died intestate but this is not necessarily the case if there are surviving children and it is therefore desirable to make a Will to ensure that your spouse or civil partner inherits all that you intend them to take.

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Testamentary Expenses

Testamentary expenses are the costs of obtaining the Grant of Probate or Letters of Administration and of administering the estate.

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Testator/Testatrix

The person making a Will (Male or Female).

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Trustee in Bankruptcy
When a person is declared bankrupt, the Court appoints a ‘trustee in bankruptcy’ who is given control of all of the bankrupt's assets. The trustee must collect all of these assets and sell them. The proceeds are then divided amongst creditors according to bankruptcy laws.

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The trustee must collect all of these assets and sell them. The proceeds are then divided amongst creditors according to bankruptcy laws.

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A Trust
One or more persons hold property for the benefit of others (the beneficiaries). A Trustee is the person who is acting in the trust and holds the property for the benefit of someone else.

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A Will

The formal document known as a testamentary disposition by which somebody confirms their wishes as to the division of their estate on death.