Estate administration glossary

Estate paperwork can involve unfamiliar terms. To help you, we’ve explained some of the most common terms below.

  • A

    Administrator

    The person or professional appointed by the Courts to administer an estate where the deceased has not left a valid Will. Note, this does not apply in Scotland as there are differences compared with the law in England and Wales.

    An administrator can also be appointed where the executor named in a valid Will is unwilling or unable to act.

    Assets

    Assets can include a house and its contents, money and investments, assurance policies and material possessions.

    Together with any liabilities, assets form the deceased’s estate.

    B

    Beneficial joint tenancy

    A way to own property and make sure that it will pass to any surviving owner outside the terms of a Will or intestacy.

    Beneficiary

    A person or organisation can be a beneficiary, inheriting an estate in part or wholly. Beneficiaries will be defined in the Will of the deceased, or under the rules of intestacy when there isn’t a valid Will.

    Bequest or legacy

    A gift to a person or organisation in the will of the deceased.

    Cash gifts may also be referred to as a pecuniary legacy.

    C

    Capital Gains Tax (CGT)

    Any tax owed on the increased value of an asset, between a person’s death and the beneficiary receiving it. For example, this could include profits made on shares or investments. There is an annual tax-free allowance, after which CGT would apply.

    Caveat

    A legal hold preventing a personal representative from getting a Grant of Representation until a disagreement about the estate is resolved.

    Chattels

    Also known as personal or movable property, chattels include items such as furniture, vehicles, jewellery, paintings, and collectibles.

    Codicil

    A legal document designed to make a minor change to a Will, such as adding a legacy. It is not recommended to use a Codicil to make fundamental changes to an existing Will.

    Confirmation (Scotland)

    The legal document issued by the Sherriff’s Court in Scotland, giving executors the authority to deal with an estate.

  • D

    Deed of Variation

    A legal document that allows beneficiaries to disclaim or vary any benefit under a Will, intestacy or legal rights received in an estate.

    Disbursement

    A payment made to pay debts, bills or costs of administering an estate.

    Discretionary trust

    A person can include a trust in their Will to provide for the need of selected beneficiaries. It is a legal arrangement in which the appointed trustee or trustees have the power to decide how and when to distribute the trust’s assets to any beneficiaries.

    Domicile

    Describes the country a person treats as their permanent home, lives in and has substantial connections with, including for tax purposes. This is relevant when calculating estate tax liabilities.

    E

    Estate

    Everything left behind by the deceased, including:

    • Assets, and possessions such as property, money and investments, vehicles, pets, and other valuables.
    • Liabilities, such as mortgage, credit card or loan balances.
    Estate accounts

    A record of all financial transactions since an individual passed away, charting the collection of estate assets, the settling of liabilities and distribution to beneficiaries.

    These are prepared by the administrators, executors or their legal representatives.

    Estate administration

    The process of securing assets, settling liabilities and distributing an estate after someone has died. If the deceased has made a Will, the executor will distribute the estate accordingly. Otherwise, the estate will be administered under the rules of intestacy.

    Executor

    Someone appointed under a Will to act as a deceased’s personal representative. This could be a friend, relative or professional, such as Lloyds Bank.

    Executor dative (Scotland only)

    If there isn’t an executor named in a Will, or there’s no Will to be found, an application can be made to the Sheriff Court to appoint an executor dative – often a surviving partner. The Lloyds Bank Estate Administration Service cannot provide this specific service in Scotland.

  • G

    Grant of Probate

    In England, Wales and Northern Ireland, this is a legal document issued by the Probate Registry giving a person or company the legal authority to administer the estate of someone who has died and proves their Will.

    Grant of Representation

    The legal document needed by a personal representative in England and Wales for them to administer an estate. That legal document may be a Grant of Probate or Letters of Administration.

    Guardian

    One or more individuals can be appointed in a Will to look after the interests and welfare of children under the age of 18 if both of their parents have died. If there is no Will, the courts will make a decision about guardianship.

    I

    Inheritance Tax (IHT)

    Tax payable when an estate is valued over the IHT threshold (currently £325,000), and before assets are distributed to any beneficiaries.

    Although primarily a tax due on someone’s estate, IHT can apply to gifts made by the deceased during their lifetime, subject to tax exemptions and relief.

    Legacies to surviving partners, registered charities and selected organisations may be tax free.

    It is important to identify lifetime gifts as well as value all assets of the estate to calculate the right amount of tax. It is the responsibility of the administrator or executor to calculate and pay due IHT before the Grant of Representation is applied for.

    If there are insufficient funds in the deceased’s estate, you may need to set up a specialist loan to pay the tax in advance. Lloyds Bank Estate Administration Service can provide information on what to do next.

    Intestacy

    The legal rules that apply when someone dies without leaving a Will.

    Intestate

    A person who has died without leaving a Will.

  • L

    Legacy

    A gift to a person or organisation in the will of the deceased.

    Cash gifts may also be referred to as a pecuniary legacy.

    Legal rights

    This applies in Scotland only. It relates to fixed proportions of an estate which the children or surviving partners of the deceased may be entitled to, regardless of the terms of the Will.

    Legatee

    The person who receives a legacy under a Will.

    Letters of Administration

    This is a legal document issued by the Probate Registry, appointing a person or company to administer an estate where:

    • There is no Will.
    • There is a Will, but no executors are named.
    • A named executor is unable or unwilling to act.
    Liabilities

    Anything owed by the deceased at the time of death, such as outstanding credit card or loan balances, household bills, taxes or funeral expenses.

    Life interest

    The right to use, either for life of the beneficiary or a defined period of time, assets that will eventually be returned to the original estate in the future and distributed to the final beneficiaries. This could be a house, possession, or other property.

  • M

    Moveable property

    Anything belonging to the deceased, apart from land or buildings.

    Moveable property may be referred to as a bequest, or under the broader term of legacy.

    N

    Nil rate band (NRB)

    In the UK, the amount of an estate’s value that is exempt from inheritance tax. As of 2021/2022, the nil rate band is £325,000 per individual (when domiciled in the UK).

     

  • P

    Pecuniary legacy

    A cash sum, left to an individual or organisation as a gift in the Will of the deceased.

    Moveable property or cash sums may also be referred to as a bequest, or under the broader term of legacy.

    Personal representative

    The executor or administrator responsible and entitled to deal with the estate after someone has died.

    Potentially exempt transfer (PET)

    This is a gift made by an individual during their lifetime, sometimes with the intention of reducing the value of their estate for inheritance tax purposes. If the individual survives for 7 years after making the gift, then it will not be subject to inheritance tax.

    However, if the individual dies within 7 years of making the gift, it may become subject to inheritance tax. The liability may be reduced on a sliding scale depending on the number of years between the date of the gift and the date of death.

    The Lloyds Bank Estate Administration Service can help administer estates where there are complex inheritance tax matters involved, and where a specialist loan is needed to settle the liability.

    Power reserved

    When an executor decides not to take up their role but reserves the right to assume it again at a later stage of the estate administration process.

    Predeceased

    An individual who has died before the deceased.

    Prior rights

    If someone dies in Scotland without leaving a Will, a system known as 'prior rights' applies. This may entitle a surviving partner to a share of any estate assets, such as the house they shared with the deceased, subject to certain conditions.

    Probate

    A term often used when referring to the estate administration process as a whole, as well as to the Grant of Probate, which validates the Will of the deceased and gives a person or company legal authority to administer their estate.

    Probate registry

    The branch of His Majesty's Courts and Tribunals (HMCTS) responsible for overseeing the administration of estates. They also manage applications for and the issuing of legal documents, such as the Grant of Probate or Letters of Administration.

    R

    Residuary beneficiary

    A person or organisation entitled to receive a share of remaining estate assets once all legacies and liabilities have been settled.

    Residuary estate

    The remaining estate assets once all legacies and liabilities have been settled.

    Residue

    The remaining estate assets once all legacies and liabilities have been settled.

    Renunciation

    The process a named executor will need to follow if they don’t want to assume a role in the administration process, either now or in the future.

    Executors may choose to reserve their power if they’d like to assume their role at a later stage of the estate administration process.

    Rules of Intestacy

    The legal rules that apply when someone dies without leaving a Will. The rules include a list of beneficiaries, starting in order with the deceased’s partner and any children.

  • S

    Section 27

    Section 27 of the Trustee Act 1925, which refers to the issuing of notices in The Gazette.

    Section 28

    Section 28 of the Trustee Act (Northern Ireland) 1958, which refers to the issuing of notices in The Gazette.

    Settlement

    Another name used for a trust.

    Specific legacy

    A specified estate asset left to a named beneficiary in a Will.

    Succession (Scotland) Act

    The main piece of legislation on inheritance in Scotland. It covers the distribution of estate assets, following the systems of legal rights and prior rights.

    T

    Tax return

    A breakdown of estate finances, which must be sent to HM Revenue & Customs for tax assessment purposes.

    Tenancy in common

    A way to own property jointly, in pre agreed proportion, to make sure that shares will pass to beneficiaries under the terms of a Will, or the rules of intestacy.

    Testator/testatrix

    The person who made a Will before their death.

    Transferable nil rate band (TNRB)

    In the UK, the nil rate band is the amount of an estate’s value that is exempt from inheritance tax. As of 2022/2023, the nil rate band (NRB) is £325,000 per individual (when domiciled in the UK).

    The transferable nil rate band (TNRB) is a tax allowance that can be transferred between spouses or civil partners when the first of them dies and their NRB is unused – either in whole, or in part.

    When the surviving spouse or civil partner dies, the unused percentage of the NRB of the first spouse is added as an allowance to the estate on second death. This can potentially double the amount of the estate that is exempt from IHT on second death.

    For example:

    Sophie died without using her NRB. This means 100% of her NRB can be transferred to her spouse Alena.

    When Alena died, her NRB of £325,000 was multiplied by 100% by Sophie’s TNRB. On her death £650,000 of Alena’s estate was exempt from IHT.

    NRB and TNRB are subject to rules and regulations. It is important to seek professional advice to make sure your estate planning is effective. Lloyds Bank offers a range of services to help you plan for the future… start by talking to us.

    Trust

    A legal arrangement where assets are held for the future benefit of a beneficiary. For example, an inheritance may be held in trust for a child until they reach their majority, or a specified age.

    Trustee

    The person or company who looks after assets held in trust for a beneficiary.

  • W

    Will

    A legally binding document setting out the wishes of the deceased and how they’d like the assets of their estate to be handled and distributed.

By your side for every step

Many people find the complexity of administering an estate by themselves a challenge, especially after losing someone they hold dear.

For over 100 years, Lloyds Bank has offered a personal and professional service to bereaved clients, administering estates and helping thousands of beneficiaries.

More about our Estate Administration Service.

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