Probate Jargon Explained England and Wales

Probate Jargon
???? Plain English please!

Probate jargon makes the process seem even more complex than it is.  Here is our attempt to make probate language easier to understand.   This page is a bit of a work in progress, so please use the form if there is a word we haven’t explained, or haven’t explained clearly. For information on disbursements/ third party costs click as it is a long page on its own.

Absolutely entitled

– it is theirs by right as soon as probate (if needed) is granted.

Abatement

Abatement is the statutory order in which assets are used towards expenses, liabilities and debts. This order is dependent on whether the estate is solvent or insolvent.

Where the estate is insolvent (the estate is insufficient to meet its liabilities), all gifts in the Will fail, as everything will be used to meet the estate’s liabilities.

Where the estate is solvent (the estate is sufficient to meet its liabilities), the order in which assets are used to cover liabilities is covered by the First Schedule of the Administration of Estates Act 1925, however, to fully understand the order stated in the 1925 Act a distinction should be made between the various types of gifts that can be made in a Will.

Ademption

A specific legacy will fail if the subject matter of the gift does not form part of the estate at death: the gift is adeemed. Ademption usually occurs because the property has been sold, given away or destroyed during the testator’s lifetime.

Administrator: the personal representative when not appointed by a valid will (when they would be called the Executor.

Affidavit: declaration in writing made upon oath before someone who is authorised to administer oaths.

Assets: the parts of an estate: the total assets are the whole estate.

Bank, property, savings and other accounts: if an account (such as a bank account) or other than land is held in joint names, and there is no evidence to the contrary, then it is deemed to be owned jointly and to pass automatically to the surviving co-owner whatever may be the terms of a Will.

If the deceased was a co-owner of the property as a “tenant in common”, his share in the sale proceeds will pass according to the Will.

Beneficiaries – those who will receive the proceeds of the death under the Will or Rules of Intestacy.

Bequest: gift of a particular item or cash (as opposed to ‘devise’, which means land or buildings). Also known as a legacy

Bereaved – those surviving.  Bereavement help.  Bereavement benefitsState benefits for new widows and widowers.

Bona Vacantia means vacant goods and is the name given to ownerless property, which by law passes to the Crown. The Treasury Solicitor acts for the Crown to administer the estates of people who die intestate (without a Will) and without known kin (entitled blood relatives) and collect the assets of dissolved companies and other various ownerless goods in England and Wales

Business Property Relief (BPR) is a reduction on the Inheritance Tax bill for many types of businesses.

CGT; Capital Gains Tax a tax on capital profits, there is normally no double charging with Inheritance Tax on death, but CGT has to be taken into account in Trust Planning

Chattels: personal belongings, eg jewellery, furniture, wine, pictures, books, even cars and horses not used for business. Does not include money or investments.

Class gifts are gifts to one or more people who are identified by reference to a particular class such as the children or grandchildren of the testator.

Codicil: document altering an existing will.

Common Law Spouse: a legal concept which does not exist but is often applied to people who live together but are unmarried. Such a person is not normally next of kin and has no specific inheritance rights.   Unless provide for in a Will, legal action may be necessary to receive anything. Feel free to contact us.

Commorientes (where two or more people die at the same time)

The commorientes rule applies for the purpose of determining title to property. It states that (subject to any court order) if two or more people die in circumstances where it is not possible to tell who died first, the deaths are presumed to have occurred in order of seniority, so the younger is deemed to survive the elder. For example, if a husband (the elder) and a wife (the younger) die together in a car accident and it is not possible to tell who died first, the wife is deemed to survive the husband for the purposes of succession to their estates.

The commorientes rule does not apply for the purposes of:

  • Inheritance tax (IHT) on death. For this purpose, the individuals concerned are assumed to have died at the same instant (section 4(2), Inheritance Tax Act 1984). The interaction of the commorientes rule and the IHT rule can have IHT advantages for spouses and civil partners, but these may be lost if the effect of the commorientes rule is overriden by a survivorship clause in the will.
  • The intestacy rules, on the simultaneous deaths of an intestate individual and his spouse or civil partner. A spouse or civil partner who dies within 28 days of the intestate’s death is deemed not to have survived (Administration of Estates Act 1925).

Contingent: where an event must happen before a gift can be made, eg the beneficiary must reach 21 before any payment can be made.

Demise: grant of a lease.

Devise: gift of house or land.

Disclaimer: the expression for a person giving up their entitlement under a Will or intestacy

Enduring power of attorney: a form that authorises someone to act on another’s behalf during their lifetime only..

Estate: all the assets and property of the deceased, including houses, cars, investments, money and personal belongings. In this context it doesn’t mean a country estate.

Executor:  the person or persons responsible for the process of probate, obtaining the grant, paying taxes then collecting and distributing the assets.  An Administrator  is essentially the same thing.

Probate jargon explained continued:

Gifts with Reservation of Benefit: a pseudo gift where the giver has retained rights over what was given, For example, a house that they still live in, but no longer own, or a holiday home they gave away but still use. A complex area, and help is wise or executor could end up in trouble with HMRC. Call us!

More on Gifts

Specific gifts are gifts of some particular identifiable possession or item that is a distinguishable part of the Testator’s estate. For example, gifts of chattels, jewellery, real property or bank accounts.

General gifts are gifts not of a precise thing, it is more an instruction for something to be provided out of the Testator’s general estate. A gift of money will nearly always be a general gift. A Testator leaving a gift of £1000 may not have such cash in their estate and their executors must raise the money to make such a gift.

Demonstrative gifts are a hybrid of the two. It is essentially a general gift that has to be satisfied from a particular fund, for example £2000 from my bank account held with RBS. Using this example, if there is only £1500 in the specified RBS account at the Testator’s death, the remaining £500 will be treated as a general gift and made out of the Testator’s general estate.

Money gifts should be written to be general gifts (unless made out of a particular fund, in such case they will be demonstrative) and all other gifts are drafted to be specific gifts.

The main concerns from this order is as follows:

  1. Assets in the Residuary Estate are firstly used to pay towards the liabilities, each person’s share in the Residuary Estate will be reduced rateably.
  2. If the Residuary Estate is not large enough to cover liabilities, any general gifts shall then also be used, each general gift will be reduced rateably.
  3. If the general gifts are also not enough to cover liabilities then specific gifts will have to be used, these will again be reduced rateably.

This statutory order can be varied, for example it can be stated that a certain gift shall have priority over all other gifts.

For the purposes of this order, demonstrative gifts are treated as if they are specific so far as they can be satisfied out of the specific fund. Anything that cannot be satisfied shall be treated as a general gift.

Grant of probate This will be issued where the deceased has left a valid Will appointing an executor who is able and willing to prove that Will.  Once the appropriate paperwork has been completed and sent to the relevant probate registry, provided the Registrar is satisfied and any Inheritance Tax has been paid, the grant of probate is issued.  This enables the executor to collect in and then distribute the assets.

Guardian: person who would become responsible for your children in the event of your death before your children are 18 years old.

Inheritance tax (IHT): tax that may be payable when the total estate of the deceased person exceeds a set threshold (subject to various exemptions and adjustments).

Intermeddled: where someone gets involved in sorting out an estate they may be said to have intermeddled and the effect of this is that they could be stuck with the role of executor or administrator even if they don’t want to be. Don’t do it!

Intestate/ Intestacy: person who dies without making a will. Can be partial, see below.

Inheritance tax IHT:   is a 40% tax on assets over £325,000 (to 5th April 2026).   It must be paid before the grant of probate is issued – that is before you can collect in any money! Where everything is left to a UK domiciled spouse, no tax is payable on the first death.  On the second death of the couple, the survivor may be able to use two £325,000 allowances. A Residence Nil Rate Band is potentially up to £175,000 RNRB is available to those passing on a qualifying residence on death to their direct descendants. A taper reduces the amount of the RNRB by £1 for every £2 that the net value of the estate is more than £2 million. Any unused NRB or RNRB following the death of an individual can be transferred to their surviving spouse or civil partner. This means that from 6 April 2021, qualifying estates can continue to pass on up to £500,000 and if the NRB and RNRB remain unused, the qualifying estate of a surviving spouse or civil partner is still able pass on up to £1 million without an IHT liability. The residence nil rate band should increase with CPI

Issue – bloodline descendants – children, grandchildren.

Joint tenants: (sometimes called ‘beneficial joint tenants’):

  • you have equal rights to the whole property or other asset
  • the property automatically goes to the other owners if you die
  • you cannot pass on your ownership of the property in your will
legal dictionary
Probate Jargon explained

See also Tenants in common below.

Lasting Power of Attorney: modern version of an Enduring Power of Attorney. Acnnot be used once a person dies. Click the link for more information.

Legacy or bequest: gift of money or object. See also Specific Legacy and Pecuniary Legacy

Letters of administration will be issued when the deceased has not left a valid Will.  The person applying for probate goes through the same process as for a grant of probate.

Letters of administration with the Will annexed is where the deceased has left a valid Will, but either no executor able and willing to prove it, so a relative will have to apply or the executor (or one of them) has appointed an attorney to act on his behalf.  The process is the same as for a grant of probate.

Life interest: gift that gives someone the right to income from an asset or the right to occupation of a property for the duration of their life after which the asset or property passes to someone else (known as the remainderman).

Minor: person under 18 years of age.

Next of kin: person/s entitled to the estate when a person dies intestate.

Partial Intestacy – where the Will does not cover everything, perhaps because a beneficiary has died and no substitute beneficiary has been named or appointed.  The longer it is since the Last Will was reviewed, the more likely this is to occur.

Pecuniary legacies – gifts of money in the Last Will.

Personal estate or personalty: all the investments and belongings of a person apart from land and buildings.

Personal representatives – the person or people who are acting as executors or administrators of a dead persons estate.

Potentially exempt transfers (PETs) are gifts which might be pulled back into the Inheritance Tax net if the giver dies within 7 years (or sometimes 14 years.) Be careful – you probably need advice.

Power of Attorney: a power of attorney made by the person who has died is automatically cancelled by the death, and it is illegal to use it thereafter.  Powers of Attorney may be given by executors and administrators to probate professionals to allow them to get on and sort things out without having to ask the executors to sign everything.

Power reserved: one of the executors has decided not to get involved, but has reserved the right to change their mind later.

Prior rights: rights to the house, its furnishings and a cash sum. Except in the case of larger estates, where intestacy is rare, prior rights often mean that the surviving spouse inherits the entire estate.

Probate: the process of sorting out, collecting in, paying tax on, and then distributing the assets of the person who has died.   The work is the responsibility of:

Probate of the will: document issued to executors by a probate registry in England, Wales and Northern Ireland to authorise them to administer the estate.

Probate registry: Government office that deals with probate matters. The Principal Probate Registry is in London with district registries in cities and some large towns.

Probate jargon explained.

Quick Succession Relief

Quick succession relief (QSR) reduces the tax payable when the same property has been subject to more than one charge to IHT. It applies where there have been two chargeable transfers on which tax is payable within a period of five years. This is a VERY basic explanation, and not comprehensive.  Contact us to be put in touch with a suitable adviser.

Typically it arises in a deceased estate which includes property they have inherited. So if a person dies within five years of inheriting an interest in another estate, it is quite likely that inheritance tax will have been paid on the first death and will become payable again on the second death. The relief reduces the tax payable on the second death.

It may also arise in the following situations:

  1. where the deceased received a lifetime gift from another person (a potentially exempt transfer) which becomes taxable because that other person has died within seven years of the gift. Note that the donor’s death could occur after the death of the recipient.
  2. where the second transfer is a chargeable lifetime transfer arising on the termination of a qualifying interest in possession acquired on an earlier chargeable transfer

Real estate or realty: land and buildings owned by a person.

Renounce: an executor who does not wish to do the job can renounce it provided they have not intermeddled.  It is a formal process

Residue: what is left of the estate to share out after all the debts and specific bequests and legacies have been paid.

Solvent estate: when the value of the assets exceeds debts and liabilities.

Specific legacies – gifts of specific items in the Last Will.  If the items are no longer owned, the beneficiary gets nothing. See also Pecuniary legacies.

Spouse – normally the legally parried / Civil Registered partner. Does not include a common law spouse.

sui juris of full age and capacity.

Tenants in common

As tenants in common:

  • you can own different shares of the property or other asset
  • the property does not automatically go to the other owners if you die
  • you can pass on your share of the property in your will

Testator (male) or testatrix (female): the person whose Last Will and testament it is.

Trustee/s: person/s responsible for administering a trust.

Will: in full, the Last Will and Testament, the document in which you say what is to happen to your possessions on your death.

Feel free to email us via our contact form and we’ll add any definitions to the page.  We try not to speak in jargon, but it is hard to avoid it entirely!

Probate jargon explained.

 

 

 

 

 

 

 

 

 

 

 

 

 

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