Estate planning glossary.
Plain English definitions of the terms you might come across, from Wills and trusts to Inheritance Tax.
Codicil
A document that amends an existing Will rather than replacing it. Codicils must be signed and witnessed in the same way as a Will.
Read full entryCourt of Protection
The court that makes decisions for people who lack mental capacity, including appointing Deputies where no LPA is in place.
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Deputy
A person appointed by the Court of Protection to make decisions for someone who has lost capacity without an LPA in place.
Read full entryDiscretionary Trust
A trust where trustees decide which beneficiaries from a defined class receive what, and when. Used for asset protection, vulnerable beneficiaries, and IHT planning.
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Estate
The total of everything a person owns at the time of their death, including property, savings, investments, possessions and digital assets, less any debts.
Read full entryExecutor
The person named in a Will to administer the estate after the testator's death, including collecting assets, paying debts, and distributing the residue to beneficiaries.
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Gift in Contemplation of Death (Donatio Mortis Causa)
A gift made by a person who believes they are about to die, conditional on their death, taking effect on death.
Read full entryGrant of Probate
The court document confirming an executor's authority to deal with an estate after the testator's death.
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Inheritance Tax (IHT)
A tax charged at 40% on the value of an estate over the nil-rate band (currently £325,000 per person), with various reliefs and exemptions.
Read full entryIntestacy
The state of dying without a valid Will. The estate is then distributed under fixed legal rules, regardless of what the deceased might have wanted.
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Lasting Power of Attorney (LPA)
A legal document giving chosen attorneys authority to make decisions for the person who made it, used if the person loses capacity to decide for themselves.
Read full entryLetter of Wishes
A non-binding document accompanying a Will or trust, expressing the person's wishes for guidance.
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The court document equivalent to a Grant of Probate, issued where the deceased did not leave a Will.
Read full entryLife Interest Trust
A trust where one person receives the income (or right to occupy property) during their lifetime; the capital passes to other beneficiaries on their death.
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Mirror Wills
Two Wills with matching provisions, made together by a couple. Each Will is independent and can be changed by either party at any time.
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Wills made by two or more people that cannot be changed unilaterally after the first death. Distinguished from Mirror Wills.
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Probate
The legal process of dealing with the estate of someone who has died, including obtaining a Grant of Probate, paying debts and taxes, and distributing the remainder.
Read full entryProperty and Financial Affairs LPA
An LPA covering money, property and financial decisions, including operating bank accounts and managing or selling property.
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Testator
The person who makes a Will. The female form 'testatrix' is now rarely used.
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A legal arrangement where one person (the trustee) holds assets for the benefit of another (the beneficiary).
Read full entryTrustee
A person who holds assets in trust for someone else.
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