Terms in Estate Planning and Wills Explained
Below is a plain-English version of common terms used in Estate and Will Planning in NSW
A
Administrator
A person appointed by the Court to manage an estate if there is no valid will, or no executor able to act.
Advance Care Directive
A document recording medical treatment wishes for future care.
Ademption
When a gift in a will fails because the item no longer exists at death.
Example: the will leaves “my boat”, but the boat was sold before death.
B
Beneficiary
A person or organisation that receives something from a will, trust, or other estate arrangement.
Binding Death Benefit Nomination
A formal direction to a super fund about who should receive the death benefit.
C
Capacity
The ability to understand decisions and their effect.
Capital
The assets in a trust or estate, such as cash, investments, or property.
Cash Gift / Pecuniary Gift
A fixed amount of money left to someone.
Example: “$10,000 to James”.
Caveat
A Court filing used to stop a grant of probate from being issued while a dispute is dealt with.
Charity Beneficiary
A charity named to receive a gift in a will.
Children / Issue / Descendants
Words used to describe family members who may inherit.
- “Children” usually means sons and daughters.
- “Issue” or “descendants” can include children, grandchildren, and later generations.
Class Beneficiary
A person included in a group described in the will, such as “my grandchildren”.
Codicil
A formal document that changes an existing will without replacing the whole will.
Contingent Beneficiary
A person who receives a gift only if something happens.
Example: a child who inherits only if the spouse dies first.
D
Discretionary Beneficiary
A person who may receive benefits from a trust if the trustee decides to make a distribution.
E
Enduring Guardian
A person appointed to make personal, lifestyle, and medical decisions if capacity is lost, in jurisdictions that use this appointment.
Enduring Power of Attorney
A power of attorney that continues even if the person loses capacity.
Estate
Everything a person owns or controls at death, such as money, property, shares, and personal belongings.
Estate Planning
Putting documents and arrangements in place to deal with what happens after death and if capacity is lost during life.
Executor
The person chosen in the will to carry out the wishes in the will, collect assets, pay debts, and distribute the estate.
F
Family Provision Claim
A claim made by an eligible person who says the will did not make proper provision for them.
G
Guardian
A person appointed to care for a child.
I
Income
Money earned from assets, such as rent, interest, or dividends.
Intestacy
When a person dies without a valid will, or part of the estate is not covered by the will.
Intestate Estate
An estate distributed under the legal rules, rather than under a will.
J
Joint Tenancy
A way of owning property together where the surviving owner usually takes the whole property automatically on death.
L
Letter of Wishes
A non-binding note that explains how the will-maker or trust creator would like certain decisions to be made.
Letters of Administration
Court authority given to an administrator when probate is not available.
Life Interest
A right to use property or receive income from property during a person’s lifetime.
Life Tenant
The person who has the life interest.
M
Minor
A person under 18 years old.
N
Next of Kin
A close relative. This does not always mean that person automatically inherits everything.
P
Per Capita
Each person receives an equal share individually.
Per Stirpes
A family branch takes the share their parent would have received.
Pecuniary Beneficiary
A person receiving a set amount of money.
Personal Representative
A general term for an executor or administrator.
Power of Attorney
A legal document appointing someone to manage financial and legal matters.
Primary Beneficiary
The main person intended to benefit from a trust.
Probate
Court recognition that a will is valid and that the executor has authority to deal with the estate.
Protective Trust
A trust set up to protect assets for a person who may be vulnerable or at financial risk.
R
Remainder Beneficiary
The person who receives an asset after a life interest ends.
Residuary Beneficiary
The person who receives the residue of the estate.
Residuary Estate
What is left in the estate after debts, expenses, and any earlier gifts are paid.
Revocation
The cancellation of a will or other legal document.
S
Specific Beneficiary
A person receiving a particular item.
Specific Gift
A gift of a particular item.
Example: “my car to Anna”.
Special Disability Trust
A special type of trust for a person with severe disability, subject to legal rules.
Standing
The legal right to bring a claim.
Substitute Beneficiary
A backup beneficiary named in case the first beneficiary cannot inherit.
Superannuation Death Benefit
Money payable from a super fund after a member dies.
T
Testamentary Capacity
The mental ability required to make a valid will.
Testamentary Discretionary Trust
A trust set up by a will where the trustee decides which beneficiaries receive income or capital and when.
Testamentary Trust
A trust created by a will and starting after death.
Testator
The person who makes a will.
Trust
An arrangement where one person holds and manages assets for someone else.
Trustee
The person or company responsible for managing trust assets.
U
Undue Influence
Pressure placed on someone that overcomes their free choice and may make a will invalid.
V
Vesting
The point when a person’s entitlement becomes fixed.
W
Will
A legal document that says who should receive a person’s assets after death.