Common Terms Found in Wills: A Glossary for Australian Estate Planning
Understanding the language used in wills can be daunting. This glossary explains common terms you may encounter in a will, helping to demystify the legal jargon associated with estate planning. While this guide focuses on terms relevant to Australian estate planning, it is not a substitute for professional advice.
Administrator
If someone passes away without a valid will, an administrator is the person appointed by the court to manage the deceased’s estate. The administrator’s role is similar to that of an executor but arises in cases of intestacy (where there is no will).
Age of Majority
The age of majority is the age at which a person is legally considered an adult. In Australia, this is 18 years of age unless specified otherwise in a will. For instance, a will may direct that beneficiaries only inherit their share of the estate once they reach a specific age, such as 21 or 25.
Assets
Assets include all property, belongings, and financial resources owned by the deceased. These can be real property (e.g., a house), personal property (e.g., jewellery), or financial assets (e.g., bank accounts and shares).
Beneficiary
A beneficiary is a person or entity entitled to receive a portion of the deceased’s estate under the terms of the will. Beneficiaries can include family members, friends, charities, or other organisations.
Bequest
A bequest refers to a gift left in a will. There are several types of bequests:
Specific bequest: Also known as a “specific gift”. A particular item or asset is given to a beneficiary, such as a car, jewellery or shares in a public/private company.
Pecuniary bequest: A fixed sum of money is left to a beneficiary.
Residuary bequest: A portion of the estate left over after all debts, taxes, and other bequests have been distributed (see below).
Codicil
A codicil is a formal, legally binding document used to make minor changes to an existing will without rewriting the entire document. For example, a codicil might be used to update an executor or add a new beneficiary.
Estate
The estate comprises all the assets and liabilities owned by a person at the time of their death. The estate includes both real property (e.g., land and buildings) and personal property (e.g., bank accounts, shares, and personal items).
Executor
An executor is the person appointed in a will to administer the deceased’s estate. Their duties include collecting and managing assets, paying debts and taxes, and distributing the estate to beneficiaries according to the terms of the will.
Grant of Probate
A grant of probate is a legal document issued by the Supreme Court that confirms the validity of a will and authorises the executor to administer the estate. This is often required to access certain assets, such as bank accounts or real estate.
Intestacy
Intestacy occurs when a person dies without a valid will. In such cases, the estate is distributed according to a statutory formula set out in the Administration Act 1903 (WA) or equivalent legislation in other states.
Minor
A minor is a person under the age of 18. Wills often include provisions for minors, such as appointing a guardian or creating a trust to hold their inheritance until they reach the age of majority.
Pecuniary Legacy
A pecuniary legacy refers to a fixed sum of money left to a beneficiary in a will. For example, “I give $10,000 to my nephew, John Smith.”
Power of Attorney
Although not part of a will, a power of attorney is a legal document that allows someone to make financial or legal decisions on your behalf while you are alive. It ceases to have effect upon your death.
Probate
Probate is the legal process of validating a will and granting the executor authority to manage and distribute the estate.
Residuary Estate
The residuary estate refers to the portion of the estate left after all debts, taxes, and specific bequests have been paid. This is typically distributed to the residuary beneficiaries named in the will.
Specific Gift
A specific gift is a particular item or asset left to a beneficiary in a will. Examples include a car, a piece of jewellery, or a sum of money.
Testamentary Capacity
Testamentary capacity refers to the legal and mental ability of a person to make a valid will. In Western Australia, this includes understanding the nature of the will, the extent of their assets, and the potential claims on their estate.
Testamentary Guardian
A testamentary guardian is a person appointed in a will to take on the legal responsibility of caring for minor children (under 18 years of age) in the event that both paternal parents pass away or there is no surviving paternal parent with parental responsibility. This role includes making important decisions about the child's upbringing, such as education, healthcare, and general welfare.
The appointment of a testamentary guardian ensures that the testator's wishes regarding the care of their children are clear, offering stability and guidance during a difficult time. However, the court retains the authority to review and confirm the guardian’s appointment, particularly if any disputes arise.
Testamentary Trust
A testamentary trust is a type of trust established in a will that allows the trustee to decide how the trust’s income or assets are distributed among the beneficiaries of that trust. This is commonly used for tax planning or asset protection. A testamentary trust is virtually the same as a ‘discretionary family trust’. The primary difference between a testamentary trust and a discretionary family trust is the date in which these trusts become operational. A testamentary trust only becomes operational following the death of the will maker whereas a discretionary trust can be established and operational during someone’s lifetime (usually setup on the advice of a legal or financial professional).
Testator/Testatrix
The testator (male) or testatrix (female) is the person who makes a will. This term is gradually being phased out in modern legal language, including in wills. This shift is part of a broader movement toward using gender-neutral language in legal documents to promote inclusivity and simplicity.
The term often replacing testator and testatrix is simply will-maker or deceased (where applicable, depending on the context of the will).
Trustee
This term trustee is tricky to explain as it holds the same core meaning across multiple applications. A trustee generally refers to:
— a person or entity responsible for managing assets for the benefit of others;
— a person or entity responsible for managing a trust created by a will.
However, its specific role varies depending on the context:
Executor as Trustee in a Will:
In a standard will, such as our Essentials Will, the executor is referred to as a trustee because they manage and distribute the assets of the estate according to the terms of the will.
Here, the executor acts as a trustee of the estate—holding, managing, and distributing estate assets in the best interest of the beneficiaries.
Independent Trustee for Testamentary Trusts:
In a Testamentary Trust Will, a trustee may be independently appointed to manage the specific trust(s) created under the will.
These trustees are responsible for overseeing the trust property, adhering to the terms of the trust, and exercising discretion for the beneficiaries’ benefit, often for asset protection or tax planning purposes.
The trustee has a fiduciary duty to act in the best interests of the trust’s beneficiaries.
Why Understanding These Terms Matters
A will is a powerful tool for ensuring your wishes are carried out after your death. Understanding these common terms can help you feel more confident and informed when preparing your estate planning documents. At Estate Essentials, we simplify the process by providing guided, customisable wills designed to meet the unique needs of Western Australians.
For more information or to get started, explore our online platform today!
Disclaimer: The information provided in this article is of a general nature and is not legal advice. Estate Essentials is not a law firm and does not provide legal services. While every effort is made to ensure the accuracy of the information, it may not apply to your specific circumstances. If you have questions or require tailored advice, we recommend consulting an independent legal professional.