A guide to last will and testament commonly used
terms:
Administering the estate means dealing with the
affairs of the person who has died.
Assets are valuable things that you own. Your
home is likely to be your most valuable asset.
Beneficiaries are the people to whom you leave
possessions in your will.
Capital Gains Tax - a tax paid on anything you
sell or give away over £6000. Some of your assets are exempt from
this tax.
Chattels are tangible, movable property such as
furniture, works of art, crockery, jewellery, motor vehicles and
items of plant and machinery that are not permanently fixed.
A deed of variation is a way for a will to be
rewritten if all the beneficiaries agree. It can be a useful way to
reduce Inheritance Tax.
Estate - this is everything that you own at the
time of your death, less what you owe.
Executors are people named in a will who will
administer the estate.
HM Revenue & Customs is the government
department that deals with tax, including Inheritance Tax.
Intestate - dying without leaving a will is
known as dying intestate.
Inheritance Tax is the tax paid on your estate
after you die. Everyone is allowed to leave a certain amount before
Inheritance Tax is payable; for 2009-10, this amount is £325,000.
Inheritance Tax is sometimes shortened to IHT.
Lasting powers of attorney are a way to give
someone else the power to handle your finances if you become
incapable of looking after your own affairs. Lasting powers of
attorney (LPAs) replace enduring powers of attorney (EPAs). No new
EPAs can be set up, but old ones are still valid.
Legacies are gifts of money or property left to
someone in a will. They can be left to either individuals or
organisations.
Potentially Exempt Transfer (PETs) - a gift
that is only free from Inheritance Tax if you live for seven years
after making the gift. If you die within seven years, a system
called taper relief works out the amount of tax that is payable on
the gift.
Probate refers to administering the estate of
the person who has died, according to his or her will. In Scotland,
this is known as confirmation.
Residue The residue of an estate is everything
that is left when bequests and legacies have been distributed and
any debts and other liabilities settled.
Trustees are the people responsible for looking
after any part of your estate that is put into a trust.
Trusts are a way to leave some or all of your
estate to a person or group of people. A trustee will manage it for
you.
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