A Testator is the person who makes a Will.  In other words, it’s the individual who sets out what should happen to their money, property, and possessions after they die.

 

A Life Tenant is a person who has the right to benefit from assets held in a trust for their lifetime (or for a specified period).

 

A Beneficiary is a person or organisation that receives something from a Will, trust, insurance policy, or pension.  For example, a beneficiary might inherit money, property, or benefit from income held in a trust.

 

A Trustee is a person or organisation responsible for looking after assets held in a trust on behalf of the beneficiaries.  They are legally responsible to:

 

• Manage and protects the trust assets.

• Follow the terms of the trust deed or Will.

• Make decisions in the best interests of the beneficiaries.

• Keep records and deals with tax and legal obligations.

 

Trustees do not benefit personally from the trust (unless they are also beneficiaries).

 

An Executor is the person named in a Will to administer the estate after death, carrying out the deceased person’s wishes.  They will collect & liquidate the estate’s assets, pay any debts & taxes, apply for probate and distributes the estate to the beneficiaries according to the Will.

 

A Guardian is a person appointed to look after a child (usually under 18) if the child’s parents die.  They will take responsibility for the child’s care, upbringing, and welfare whilst making day-to-day decisions about education, health, and living arrangements.

 

Guardians are usually named in a Will with their appointment taking affect if no parent with parental responsibility is alive.  Their role is different from a trustee (who manages money).

 

 

Inheritance Tax (IHT) is a tax charged on a person’s estate (everything they own) when they die.

 

IHT is usually charged at 40% on the value of the estate above the available tax-free allowances.  Assets left to a spouse or civil partner are usually exempt from IHT.

 

 

The Nil Rate Band (NRB) is the amount of an estate that can be passed on tax-free when someone dies.

 

The standard nil rate band is currently £325,000 per person.  IHT is charged at 40% on the value above this amount (unless reliefs or exemptions apply).  Any unused nil rate band can usually be transferred to a surviving spouse or civil partner, potentially giving up to £650,000 tax-free.

 

 

The Residential Nil Rate Band (RNRB) is an extra Inheritance Tax (IHT) allowance that applies when a main home is passed to direct descendants.  It sits on top of the standard Nil Rate Band (NRB) and can reduce or eliminate IHT on the family home.  The property must pass to direct descendants.

 

THE RNRB is currently £175,000 per person.  Where an estate is larger than £2million, it is reduced via a “taper”.

 

 

A Direct descendant (for Main Residence Nil Rate Band) can be either children, stepchildren or grandchildren (and sometimes their direct descendants).

 

An Attorney is a person you legally appoint to make decisions for you under a Power of Attorney.  They will act on your behalf if you need help and lose capacity.  They are not necessarily a solicitor.

 

The Office of the Public Guardian (OPG) is a UK government body that protects people who may not be able to make decisions for themselves.

Their responsibilities include Registering Lasting Powers of Attorney (LPAs) & Enduring Powers of Attorney (EPAs), supervising attorneys and deputies to make sure they act properly and investigates concerns or complaints about misuse of powers.