Glossary
A Living Will is written instructions to your medical team in anticipation of a situation where you are very seriously ill and not able to say for yourself whether you want a particular kind of treatment or not. In a Living Will you can pre-arrange your treatment in a given situation and this will help your doctors if you are unable to discuss it with them. Of course they are bound to act within the law so you may only give guidelines for withholding of treatment or not, as the case may be.
Some countries recognise Advance Directives as legal documents, and therefore they must be done in a particular way, or conform to legally required standards. These countries state that you must have the documents witnessed but in any case it is advisable, even if it is not a legal requirement.
Other countries accept them in practise, although have opted not to legislate about them. http://www.bma.org.uk/ap.nsf/Content/advancestatements
A Living Will usually gives clear instructions as to the course of treatment that is to be taken by medical attendants. In some cases forbidding treatment and particular care methods if you are not able to take part in any discussion about your treatment due to a physical or mental condition which means you cannot communicate.
In trust law, a beneficiary is the person or persons who may receive gifts from a Will or benefit from a Trust. A beneficiary will normally be a natural person, but it is possible to have a company or a charity as the beneficiary of a trust.
Charitable trusts aside, and one or two other trusts for specific purposes, all trusts must have named beneficiaries, with alternatives named in case the first beneficiaries are not available for any reason (they might have died already There are no restrictions about who may be a beneficiary of a trust; a beneficiary can be a child under 18, or someone with a mental disability (in fact many trusts are created specifically for people in this group). It is also possible to have trusts for unborn children, which say that you can only run such a Trust for 21 years without distributing some of the Trust assets. This rule is designed to stop Trusts running forever and the beneficiaries being frustrated in their wish to receive some benefits (Charles Dickens book Bleak House tells such a story, set in Victorian England, where the beneficiaries in the end received nothing as the capital of the Trust all went in fees to the lawyers and the Trust closed when the money ran out!)
Chattels are personal property. The definition under English law (The Administration of Estates Act 1925 Section 55(1) (x) is Carriages, horses, stable furniture and effects, motor cars and accessories, garden effects, domestic animals, plate, plated articles, linen, china, glass, books, pictures, prints, furniture, jewellery, articles of household or personal use or ornament, musical and scientific instruments and apparatus, wines, liquors and consumable stores.’ The act also provides for the cost of delivery of a gift to be paid by the executors from the estate, but does not cover the cost of insurance and storage.) Chattels do not include money, securities for money, and items used for business purposes or Real Estate, which is land and buildings.
A codicil is an addition to an existing Will, and must be signed and witnessed in the same way as the original Will. It is better to re-write the Will if possible as Codicils can be lost or deliberately destroyed without anyone being any the wiser. Generally speaking, Willwriters would advise a new Will to avoid any possible confusion.
Domicile is a term that links a person to a particular legal system. It defines the rules to be applied when no Will exists, or it cannot be found, how a Will is interpreted, and which body of law or government) is entitled to tax an estate.
A person may have many places of residence, but only one domicile. There are three separate definitions of Domicile, 1. Domicile of origin, 2. Domicile of acquisition, 3. domicile of choice.
At birth a baby acquires the domicile of his or her father, or mother if the mother is unmarried (domicile of origin). A different domicile can be acquired by marrying someone of a different Nationality, taking on a new Nationality by emigrating, etc (domicile of acquisition). For most people, their domicile of choice is normally the same as their domicile of origin, but in some cases may change due to a change in circumstances. A person’s domicile may be changed de facto by forsaking a former domicile of origin and intending to live indefinitely at a new place in which he or she is physically present and by whose laws he or she is governed. There are some things which can be done to re-enforce the change, such as closing bank accounts and selling property in the country of birth. There are no hard and fast rules for judging a domicile of choice, but if there is any question of which law applies to a particular estate then it could well be down to a court decision.
A person’s Domicile will govern the law of inheritance applicable on death and the matrimonial law governing the property of a married couple, wherever that property may be.
An Enduring Power of Attorney (EPA) is an appointment made of an agent, usually friend or family member, to take legal control of your personal affairs and make legal or other decisions when you are no longer able to do so, i.e. when you lose your mental capacity to make decisions, understand what you are doing, and know the likely consequences of your actions or are physically unable to sign your name.
An EPA must be made when you are fully in control of your thought processes. It should be stored safely, often that is in the same place as your Will, against the day when you might not be able to think clearly or communicate effectively about your day to day affairs.
It must be registered with the court of protection when it is needed, supported by medical evidence, and cannot be used unless it is registered. Registration will only be complete when the nearest relatives have been informed about what is happening.
Every country has its own version of an EPA (although basically they all say the same thing). An EPA made in one country is unlikely to be accepted legally by another’s legal system. Prescribed forms must be used, complete with explanatory notes, and these forms vary from one country to another. It is not acceptable to write down in your own words on a piece of paper, it absolutely has to be on the official government form. Conditions for signing may also be different in different countries.
An estate is all property owned by an individual, or in which you have an interest , own outright or are in the process of inheriting, but not Trust property of which you are a beneficiary. In the context of wills and probate, the term ‘Estate’ refers to the total assets which the deceased owned or in which some interest was held.
Guardianship is the appointment of a person who would be responsible for a child under 18 made by Deed or (more commonly) in a Will, if both parents die where they are married to each other, or have been if divorced, or the mother of a child born out of marriage unless the father registered the birth.
A Guardian is usually chosen with the care of the child in mind, but actually the guardian is responsible for any decisions about the child and must make sure that wherever he or she is provides a safe and caring environment for a young person. This means that the guardians are not necessarily the people who have physical care of the child; a family may decide that the child’s best interests are served by going somewhere else. For example, many couples appoint parents as guardians of young children. As everybody grows older, parents in their 60’s or 70’s may not feel able to cope with a young teenager. It would be entirely appropriate for them to decide that he or she should go to an aunt or uncle who has children of their own. Legally, the guardians signature would be required for things such as the giving of anaesthetic and surgery, school trips, savings accounts etc.
A health care proxy is an agent who is allowed to make health care decisions if an individual is incapable of communicating. The appointment is often accompanied by an Advance Directive. The proxy cannot make a health care decision as long as the primary individual is thinking clearly and able to express him/herself in some way. The appointment of a health care proxy gives the medical team a point of contact if they wish to discuss the treatment of someone who cannot communicate effectively.
Inheritance is the passing on of property, titles, debts, and obligations when someone dies.
Intestacy is the condition of the estate of a person who dies without making any provision for what happens to his or her assets. Mostly that means without making a Will. Where the sum total of property comes to more than the money owed by a person who has died, then the residue must be given to another person or retained by the government of his or her domicile
In the situation where there are no instructions about who gets what, the next of kin or chief beneficiaries under the rules of intestacy will be asked to administer the estate and will be given Letters of Administration, which is the equivalent of a Grant of Probate.
It is possible to have a partial intestacy, for example where a named beneficiary dies before the testator (person who wrote his or her Will) and no alternative provision has been made for that part of the estate, then it is distributed according to the Rules of Intestacy. The rest of the estate will go to the surviving beneficiaries according to the written instructions in the Will. If a beneficiary dies before inheriting there is not necessarily a provision under law for his or her share to go to his or her spouse or children. In order for that to happen it must be clearly stated in the Will.
Debts, funeral expenses, taxes and legal expenses are paid from an estate before the distribution of the residue (what’s left over).
In the common law, a Will or testament is a document by which a person (the testator) regulates the rights of others over his or her property or family after death. In the strictest sense, "Will" is a general term; while "testament" applies only to personal property (this distinction is seldom observed). A Will may also be used as the instrument in a trust, or to leave instructions for the setting up of a trust for named beneficiaries or others.
A US Living Trust is used as a means to get round the complicated probate process in the States. (read more)
A power of attorney or letter of attorney in common law systems or mandate in civil code systems is permission to act on someone else's behalf in a legal or business matter. The person authorising the other to act is the "principal" or "grantor (of the power)" or “donor”, and the one authorised to act is the "agent" or "attorney-in-fact" (AIF) or the “donee”. The attorney-in-fact acts "in the principal's name"—for example, by signing the principal's name to documents. A Power of Attorney does not allow the attorney to make a Will on behalf of another person.
Probate is the legal process of settling the estate of someone who has died, or is declared dead in the case of a missing person. The word ‘Probate’ means ‘to prove’, and the process is of collecting the assets, resolving all claims, paying expenses and distributing the property is known as ‘proof’ of the Will. The executors must present the accounts to the probate office to prove the estate before permission is given to distribute the assets.
A testator is a person who has made a legally binding Will or testament, which states clearly what is to be done with that person's family and/or property after death.
In the common law legal systems, a trust is an arrangement whereby money or property is owned and managed by one person (or persons, or organisations) for the benefit of another. A trust is created by a settlor, who entrusts some or all of his property to people of his choice (the trustees). The trustees are the legal owners of the trust property, but they are obliged to hold the property for the benefit of one or more individuals or organisations (the beneficiaries), usually specified by the settlor. The trustees owe a legal duty to the beneficiaries, who are the "beneficial" owners of the trust property, they must manage the trust funds properly and to benefit the beneficiaries. The trust is governed by the terms of the trust document, which is usually written and in deed form. It is also governed by local law.
The usual situation for a Trust to be set up in a Will is for children under 18 (minors). Children, whether minor or of full age, who have a disability might also be the beneficiaries of such a trust because they are unlikely to be able to manage their own affairs. Others who depend on you (such as elderly parents) might find it difficult to cope with large amounts of money, and would also have to pay tax on anything that they own outright. Sometimes you might want someone to benefit from your estate but would not want to give them the money because they would pass it on to their heirs, who might not be your choice (as would be the case in a second marriage)
There are many forms of Trust, such as Pension schemes, money held by a Charity, funds for hospitals, religious organisations etc. Will trust become effective only on the death of the Testator and only if certain conditions are met (such as children not having reached the age of 21). Although many Wills contain instructions for a Trust, the reality is that very few actually happen because parents live into old age and children are grown up by the time their parents die.