Looking to get your affairs in order? Perhaps you've been asked to be an Executor by someone close to you? We've compiled a list of key Estate Law terms so you can understand what everyone is talking about when it comes to Estate Law and estate planning.
An administrator is a person appointed by the court to handle the estate of someone that has no executor.
Things owned by a person such as property, cars, bank accounts and other physical belongings.
An attestation clause is at the end of the Will and states that the Will has been signed and witnessed in accordance with the necessary requirements for the specific state or country.
Beneficiaries are people and organisations that receive benefits or assets from the estate of someone who has passed away.
This refers to a person’s ability to know the facts and effects of their choices.
A codicil is a document that makes a change to an existing Will. It must be signed in the same way as a Will is in order to be valid.
Important Note: Writing your Will with Willed includes unlimited updates for 12 months so there’s no need to create codicils (which can be tricky) when your circumstances change. You can simply and quickly create a new Will.
Unlike a specific bequest, the gift is only distributed to someone upon an event occurring. For example, a testator might decide that a beneficiary can only receive their inheritance upon reaching a specific age.
Enduring Power of Attorney
Enduring Power of Attorney is a legal document allowing someone to appoint another person to make legal, financial and medical decisions on their behalf, in the event that they lose the mental capacity to do so for themselves.
All of the property, liabilities and assets that belonged to the deceased at the time of their death.
The process of preparing to protect and distribute assets once you have passed away. Estate Planning is often a collaborative process with professional advice sought from lawyers, accountants and financial advisors in order to formulate a plan.
An executor is a person appointed by a Will whose job is to handle or manage the estate of the person who passed away. A Will can appoint multiple executors.
Someone appointed under a Will to look after children who are minors (under 18 years old).
When someone dies without leaving a valid Will. Their estate will be shared among their relatives in accordance with the relevant intestacy laws of where the individual lived.
When you own property with another person. If one of the two dies, the property will pass automatically to the other. This is because the survivor has the right of survivorship. This passes without the need for a Will.
- Further reading: Joint Tenancy vs Tenancy in Common: Property Ownership in Australia
The process whereby the Court approves and validates a Will so that the executor can act on it.
Letters of Administration
Letters of Administration is a document provided by the court that confirms the appointment of an administrator. This is required when:
- there is not a valid Will
- the Will didn’t appoint an executor, or
- the appointed executors are unable or unwilling to act as executor.
A gift for someone, but only for their lifetime. For example, the right to live in a property until the resident dies. Upon the death of that person the asset will be distributed according to the Will, passing to another beneficiary.
Next of Kin
A person’s spouse, domestic partner or closest living blood relations who are over the age of 18. In the event that someone has not left a legal Will, the deceased person’s estate will be distributed to the surviving partner and/or next of kin.
Power of Attorney
Power of Attorney is a legal document allowing someone to appoint a person to make legal, financial and medical decisions on their behalf.
A government office established by an Act of Parliament. Some of their services include Will services, acting as executors and administrators for intestate estates (where no Will was left) as well as drafting Powers of Attorney.
Note: Although established by an Act of Parliament, Public Trustees operate in a similar way to private businesses, charging fees for their services.
Real estate, being land and interests in land.
When the appointed executor, upon the death of the person who appointed them refuses to act as the executor. They can resign from this role.
The individual who receives the remainder of the estate after the specific gifts and assets have been distributed and debts and expenses have been paid.
Revocation of a Will will make it ineffective and cancel it. The executor and the division of assets as detailed in a revoked will no longer apply.
Small Estates Service
When someone dies and leaves property or assets valued less than a set amount, the executor or administrator can apply for simplified probate procedures.
A gift of a specific asset such as jewellery, an artwork, a dinner set or even a specific amount of money.
The mental capacity that is required in order for a Will to be validly made by a testator. This requires the individual to be of sound mind, memory and understanding; They must be aware of, and understand, the effect of making a Will.
The testator is the person who has made the Will.
An arrangement that allows assets to be held for the benefit of one party (beneficiary) by another party (the trustee).
Estate planning and estate law can involve a lot of words we don't use every day. Hopefully understanding some of the key concepts will make things easier for you when it comes time to plan your estate or be involved in the administration of some else's.
If you are ready to write your legal Will, start today at willed.com.au. Or, if you are the executor of an estate and you need help with an application for a grant of probate, give our legal team at Willed Law a call on 1300 945 533. They can fast track the process for an affordable fixed fee.
Disclaimer: The content of this blog is intended to provide a general guide to the subject matter. This blog should not be relied upon as legal, financial, accounting or tax advice.