5 August 2021
Terminology can help us bring clarity to our final wishes, but it can also completely confuse us. Whilst we always recommend working with a qualified professional when drafting these documents and final plans, we also want you to know as much as possible to make informed and intentional decisions.
A will, also known as a testament, is a document in which a person sets out what must happen to their estate when they die. A person's estate consists of all their assets (investments and property) and liabilities (debts) they had as at the date of death. A trust is an arrangement that allows someone to hold assets (without owning them) for the benefit of the trust beneficiaries.
Here are some terms that you will read and talk about when discussing your last will and testament:
Testator: The testator is the person who is making the will and signing his or her name. If the person making the will is female, the word testatrix is sometimes used.
Beneficiary: A beneficiary is someone who receives an inheritance through a will. Anyone you leave property to in your will is one of your beneficiaries.
Intestate: A person who dies without a will is intestate. State intestacy laws then decide who your heirs are.
Probate: The legal process through which a court examines, approves, and enacts the terms of a will is known as probate. The process generally takes several months and includes court fees.
Codicil: If you wish to make a change or addition to your will, you can add a codicil to it. This amendment keeps the original will in place but adds or changes some terms.
Testamentary trust: You may set up a trust by creating it through your will. This is known as a testamentary trust.
When appointing a person or company to help with your will, make sure you include your trusted financial adviser in the conversation so that your estate plan can be aligned to your last will and testament.