Common Terms in Estate Planning
Six months ago I did a post about common phrases you will encounter in conveyancing matters. So, it makes sense to do one for estate planning. Like all aspects of law, estate planning involves a lot of legal jargon that most will not understand. And as I always tell my clients, please do not be embarrassed to ask me if you don’t understand something! To give you some peace of mind before starting your estate planning, I have compiled the following list of estate planning terms and what they mean.
Appointment of Enduring Guardian – if you live in NSW, you will have both a Power of Attorney and an Enduring Guardian. I have a post explaining the difference between the two here. To sum it up, a POA handles your financial matters while an Enduring Guardian manages your personal and health matters.
Assets – estate assets are everything that a person owns, such as real estate, businesses, bank accounts, investments, stocks, vehicles, personal items and more.
Attorney – a person nominated to act on behalf of another person when they are incapacitated or pass away.
Authority To Release – a document that you sign allowing your attorney to collect your Power of Attorney from Signus Legal.
Beneficiaries – A person or organisation who receives a gift under your will.
Certified copy – copies of your estate planning documents that has been signed by your lawyer verifying that it is the original document and thus holds legal value.
Conditions – rules surrounding what you attorney can do. They include the attorney’s extent of control over your financial and health care matters.
Executor – the person or organisation that you appoint in your will to manage your estate after you pass away.
Grant of Probate – a legal document issued by the Supreme Court that confirms the validity of a will.
Minor – a person under the age of 18. Wills have provisions relating to minors, including who will become their legal guardian if you pass while they are still underage and provisions regarding who will hold their inheritance until they come of age.
Personal Chattel – personal belongings of sentimental value. You organise who receives what in a Gift of Personal Chattels document that is separate from your will.
Residuary Estate – the remaining assets from your estate after all debts, funeral arrangements, gifts to beneficiaries and any other expenses have been paid. You decide what happens to the residual of your estate in your will.
Testamentary Trust Will – while most go with a Simple Will, you also have the option of creating a Testamentary Trust Will. These wills are more complicated as they transfer assets to a trustee who then holds and manages them for the beneficiaries. I have a blog post explaining the pros and cons of each in more detail here.
Trust – a legal arrangement you may outline in your will where a trustee holds some of your assets for the beneficiary. They are useful if your beneficiaries are underage or vulnerable. The trustee has a legal duty to administer the trust’s assets to the beneficiary when the time is right.
If you have any questions about terms in estate planning, please do not hesitate to contact me. I am here to help.
DISCLAIMER: This article is for informational purposes only and does not constitute legal advice.