Legal Jargon Buster
Solicitors use terms like "testator" and "nil-rate band" as if everyone knows what they mean. This guide translates legal waffle into plain English.
Beneficiary
The person (or charity) who inherits something from your estate.
If your will says 'I leave my house to my daughter Emily,' Emily is the beneficiary.
Assuming your spouse automatically inherits everything. They don't, unless named.
Chattels
Personal possessions like furniture, jewelry, cars, art and collections.
Excludes money, property and investments.
Not being specific about valuable items like watches or art.
Codicil
A legal amendment to an existing will.
Used for minor changes, like adding a new grandchild.
Using codicils for major changes. Just make a new will instead.
Executor
The person responsible for carrying out the instructions in your will.
They collect assets, pay debts and distribute what's left.
Naming only one executor. Always name a backup.
Grant of Probate
Legal permission from court allowing your executor to access your assets.
Banks won't release large funds without this document.
Assuming probate is quick. Allow time to value the estate and complete any IHT400 before applying; the grant can take several weeks or longer if further information is needed.
Guardian
The person you legally appoint to raise your children if you die while they're under 18.
Without this, the courts decide who raises your children.
Assuming grandparents automatically become guardians. They don't.
Inheritance Tax (inheritance tax)
A 40% tax on your estate if it's worth more than £325,000.
The first £325k is tax-free (Nil Rate Band).
Ignoring the 7-year rule for lifetime gifts.
Intestacy
Dying without a valid will.
The law decides who inherits. Unmarried partners get nothing.
Thinking 'common law marriage' protects you. It doesn't.
Inter Vivos Gift
A gift you make while you're alive.
An outright gift to an individual usually falls outside your estate after 7 years if you retain no benefit. Some gifts, including those within the £3,000 annual exemption and qualifying gifts to a spouse or charity, are exempt immediately.
Thinking all gifts are immediately tax-free.
Lasting Power of Attorney (LPA)
A legal document letting someone make decisions for you if you lose capacity.
Required for accessing bank accounts if you have a stroke or dementia.
Thinking your spouse can automatically sign for you. They can't.
Life Interest Trust
Lets one person benefit from an asset during their life, then passes it to another.
Common in second marriages to protect children from previous relationships.
Leaving everything to a new spouse and disinheriting children.
Mirror Wills
Two wills (usually for couples) that mirror each other.
Simple and cheap, but risky for blended families.
Assuming they can't be changed by the survivor.
Nil-Rate Band
The amount you can leave tax-free. Currently £325,000.
Transferable between spouses (potentially £650k total).
Not using the additional Residence Nil-Rate Band (£175k).
Probate
The legal process of administering an estate after death.
Involves valuing assets, paying tax and distributing funds.
Underestimating the time (6-18 months) and stress involved.
Residence Nil-Rate Band
Extra £175,000 tax allowance if leaving a home to direct descendants.
Must be your main home and go to kids/grandkids.
Downsizing without keeping records.
Residuary Estate
Everything left in your estate after debts, taxes and specific gifts.
Usually the bulk of the value.
Forgetting that tax is paid from this pot.
Testator
The person making the will.
You are the testator.
N/A - just a fancy word for 'you'.
Trust
Legal arrangement where trustees hold assets for beneficiaries.
Used to protect money for children until they are older (e.g. 25).
Thinking trusts are only for the super-rich.
Will
Legal document stating who gets your assets.
Must be signed by you and two independent witnesses.
Thinking it covers pensions (it usually doesn't).