Glossary

The People –

• Testator: The person who writes the Will (you).
• Executor: The “project manager” you choose to sort out your affairs after you die. They pay the bills, sell the house, and make sure the right people get the money.
• Beneficiary: Anyone who receives a gift or money from your Will or Trust.
• Trustee: The “guardian” of the money in a Trust. They look after the assets and ensure they are used according to your rules (often you can be a Trustee yourself).
• Guardian: The person legally appointed to look after your children if they are under 18 when you die.

The Documents –

• Will: A legal instruction manual that tells everyone who gets your assets when you die.
• Mirror Wills: Separate Wills for couples that are almost identical (usually leaving everything to each other).
• Trust: Think of this as a “safety deposit box.” You put assets inside it, and they are looked after by Trustees for the benefit of your family. It protects the money from outside risks (like divorce).
• Lasting Power of Attorney (LPA): A legal document that lets you pick someone to make decisions for you (about money or health) if you are ever unable to do so yourself (e.g., due to a coma or dementia).
• Letter of Wishes: A personal, non-legal letter to your Executors explaining why you made certain decisions or who should get specific personal items (like jewellery).

The Tax & Money Stuff –

• Estate: Everything you own—your house, car, bank accounts, investments, and even your pets—minus any debts.
• Inheritance Tax (IHT): A 40% tax charged on the part of your estate that is above your tax-free allowance.
• Nil Rate Band: The amount you can pass on tax-free (currently £325,000 per person).
• Residence Nil Rate Band: An extra tax-free allowance (currently £175,000) if you leave your main home to your children or grandchildren.
• Potentially Exempt Transfer (PET): A gift you make while you are alive. It is only “potentially” tax-free because you have to survive for 7 years after giving it. If you die sooner, it might be taxed.
• Probate: The legal process of proving your Will is valid and giving the Executors permission to deal with your assets. Banks often freeze accounts until this is done.