Glossary


Administrator
Has similar duties to those of an Executor. Appointed where there is no Will, the Will does not appoint an Executor or the named Executor is unable or unwilling to act.

Assets and Liabilities
Assets: the items  owned by the deceased at the time he or she passed away.
Liabilities: the debts owed by the deceased at the time he or she  passed away.
A list of Assets and Liabilities is drawn up by the Executor upon the Testator’s death.

Attorney
The person or company appointed in a Power of Attorney to manage your affairs.

Beneficiary
A person, or organisation, who receives a benefit from a Will or Trust.

Bond
A debt security that can be traded. It is usually issued by a government, semi-government body or company to raise money. Those who purchase a bond are effectively lending money to the issuer for which they receive a defined rate of interest over a set period of time. The bond has a predetermined maturity date.

Capital growth
An increase in the value in an asset such as a share, unit trust or managed fund. Capital growth is realised as a capital gain when the asset is sold for more than its purchase price.

Codicil
An amendment which modifies the terms of a Will. A codicil is useful for relatively minor changes. For extensive revisions, it is best to have a new Will drawn up which incorporates the changes you wish and revokes any previous Wills.

Co Trustee
When a trust is managed by more than one trustee who have equal obligations, rights and powers they are called co-trustees. They must  always act jointly unless specified in the Will or Trust deed when a trustee may act independently.

Debt
A debt is an obligation owed by one party (the debtor) to a second party, the creditor.

Diversification
The process of spreading investments across different investment sectors such as cash, fixed interest, property and shares to reduce volatility.

Dividend
The dollar amount distributed to investors in proportion to the amount of units or shares they own.

Enduring Power of Attorney (EPA)
A type of power of attorney which remains effective even if the person who gives the power later loses their mental capacity.

Estate
The assets that you own which can be left under your Will. There are items which may not be left under your Will – see Joint Property.

Estate management
This relates to management of estate assets during the term of the estate administration including managing all financial assets,  and ensuring all income is received and accounted for, managing the distribution of estate income and/assets in line with capital gains tax issues for the estate, managing any realty such as residential/commercial properties, and attending to all administration matters according to the terms of the Will.

Executor
The person or Trust company appointed in a Will to control and protect the estate's assets, pay off any debts and distribute property as directed by the Will. The value and complexity of your assets and the length of time required to administer your estate are important considerations in choosing an Executor. A trustee company can also be appointed to this role.

Grant of Probate
A document issued by the court confirming both the validity of a Will and the Executor’s right to administer the estate.

Guardian
The person or persons appointed in a Will or by the court to have custody of minor children and their assets. If you have young children (or, a dependent who is unable to function independently because of a mental or physical disability), it is highly recommended that you name a guardian.

Imputation Credit
A tax credit received from a company or investment fund for tax it has already paid on the profits it derives.

Intestacy
An estate where there is no Will and the law therefore directs who inherits.

Issue
Descendants of a person, including not only children but grandchildren, great-grandchildren and more remote descendants.

Joint Property
There are two methods of jointly owning property with another; 1) under a beneficial joint tenancy the entire property passes to the survivor(s) on a death; 2) under a tenancy-in-common a person’s share of the property pass under the terms of the subject’s Will (or on their intestacy).

Legacy
A gift which you wish to leave a person or organisation upon death.

Letters of Administration
As for a Grant of Probate, but issued to an administrator.

Letter of wishes
A letter written by the Testator to the Executor expressing certain wishes or preferences for the administration of the estate. The document is non-binding upon the Executor but is a helpful guide.

Living Trust (inter-vivos Trust)
A Trust created by a trust deed signed by a living person.

Power of Attorney
A Power of Attorney is a written authorisation to represent or act on another's behalf in private affairs, business, or some other legal matter.

Probate
The validity of the Will is determined by the Supreme Court. The Probate parchment is the document issued by the Court and confirms the appointment of the Executor of the last Will of a deceased person. The Probate generally grants the legal right to the Executor to administer the estate according to the terms of the Will.

Property
This means all assets (not merely land).

Residual Beneficiary
The beneficiary to whom the residue of the estate is left.

Residue
That portion of an estate remaining after all debts, taxes and expenses have been paid and all specific bequests/legacies and specific devises have been made.

Testamentary Trust
A trust created under the terms of a Will. There are various types of testamentary trusts including discretionary trusts, charitable trusts and trusts for minors.

Testate
Having a valid Will.

Testator
The person who makes the Will.

Trust
A legal, written arrangement whereby an appointed trustee is given money or assets to hold and manage for the benefit of those (called beneficiaries) defined in the deed which created the trust. There are two main types of trusts: living trusts and testamentary trusts.

Trustee
A company, or individuals, appointed in the trust deed to hold the trust assets and to be responsible for the management of a trust.

Will
The legal document stating a person's wishes concerning the disposal of his or her property after death.

Wills in expectation of Marriage
If you and your partner intend getting married soon your Will(s) can be made 'in expectation of your marriage' which means it/they will be valid before and after the marriage takes place. Marriage would otherwise cancel a Will.