Estate planning processes and terminology can be complex and filled with legal jargon. Below we identify some of the common terms or phrases you may encounter with a brief explanation of what they mean.
Administration of a Deceased Estate
This phrase means following the terms of a Will to ensure the testamentary intentions of the deceased person (the instructions in their Will) are followed in order to distribute or deal with their estate. This is a regulated process in South Australia and can include distributing assets/gifts to beneficiaries, converting assets into cash, closing bank accounts, transferring shares, selling a house, closing down or transferring the deceased’s interest in a business, and more. The administration of a deceased estate is governed by the Succession Act 2023.
Advance Care Directives
An Advance Care Directive is a legal document that specifies your personal wishes relating to your medical care and welfare and allows you to appoint one or more Substitute Decision-Makers to make decisions on your behalf about those matters. See our page on Advance Care Directives.
Beneficiary
This is the person or persons named in the Will of a deceased person who will receive assets from the deceased estate.
If the deceased did not make a Will, there are laws that set out who will benefit from the estate, known as the rules of intestacy.
Bequest
This is the process of gifting personal property through a Will.
Codicil
This is a document which has the legal effect of adding to or amending the terms of an existing Will.
Enduring Power of Attorney
An Enduring Power of Attorney is a legal document which enables you to appoint one or more persons (your Attorney(s)) to make decisions on your behalf about your finances and assets if you’re not able to do so. See our separate page on Enduring Powers of Attorney.
Executor
This is the person, institution or entity appointed to administer the deceased estate. The executor can seek legal advice and/or assistance with carrying out this administration.
Family Trust
A Family Trust is an arrangement whereby certain assets are held on trust by a trustee (or manager) on behalf of a group of people (usually specified family members) known as beneficiaries.
Neither the trustee nor the beneficiaries actually own the assets and the structure can therefore provide some protection from claims against your assets, claims by creditors, litigants and potential future negligence claims. See our page on Family Trusts.
Grant of Probate (also known as “Probate”)
This is a certificate issued by the Supreme Court of South Australia which authorises the executor(s) of a Will to carry out the administration of the estate of the deceased person. Probate confirms that the Will of the deceased person is “proved” and registered in the Court and that the right to administer the estate of the deceased person has been granted to the executor(s) named in the Will.
In order to obtain a Grant of Probate, the executor(s) will usually instruct a solicitor to prepare the necessary application for a Grant of Probate which is lodged with the Supreme Court Probate Registry. See our separate page on Probate.
Guardian
In your Will, this is a person who you appoint to be legally responsible and care for any minor child or children in the event of your death. The guardian will take control of the important decisions about the child or children’s welfare including who will care for them, their education and residence.
Intestacy
This term applies when a person dies without executing a Will. In this situation, the law determines who receives the assets of the deceased person’s estate.
Joint Tenancy
This describes a particular form of joint ownership. If you own property as a joint tenant with another person, you and the other person own the property in a way that carries with it a “right of survivorship”. This means that, if two people own a property as joint tenants, then if one of them dies, the surviving person becomes the sole owner. The deceased person cannot choose to give “their half” of the property to somebody else in their Will. To be able to do that, the owners would have to change their ownership to the other form of joint ownership which is known as Tenants in Common.
Letters of Administration
If the deceased died without making a Will, they are said to die intestate and the law determines who receives the assets in their estate.
The Succession Act 2023 determines which person or persons can administer the estate of the deceased person and that person then applies for a document called “Letters of Administration” through the Probate Registry of the Supreme Court of South Australia.
Letters of Administration, like Probate, confirm the death of the deceased person and confirm who is granted the right to administration of the estate. See our page on Estate Administration and Probate.
Residue
This is the portion of a deceased estate which remains after payment of all debts, funeral and testamentary expenses and after any specific gifts specified the Will.
Tenants in Common
This a form of joint ownership is quite different to Joint Tenancy When you own property as tenants in common with another person, you hold a specific portion or percentage of the property.The owners can have equal shares, or they can each have a different portion or perecentage.
Testamentary Trust
A testamentary trust is a particular type trust created by a Will and it arises on the death of the testator. This type of trust can provides many benefits including flexibility for the beneficiaries, and appropriate controls for the beneficiaries over their inheritance and the distribution of assets. A testamentary trust often provides tax effective distribution of capital and income and can assist in offering some protection of assets (for example, from spendthrift children or those who find themselves facing bankruptcy). See our page on Testamentary Trusts.
Testator
This is the person who has made and validly executed a Will. Older Wills sometimes use the word “Testatrix” to refer to a female Testator.
Trust
A trust is a legal relationship where one or more persons are the legal owner of assets (such as the holder of the title to a property) but they hold those assets on behalf of another person (or sometimes a group of people) who are the ones entitled to benefit from the assets or property (known as the beneficiaries). For example, in circumstances where a family farming property, valuable farming equipment and other business assets are involved, it is common for a Family Trust to be established. This might enable the family to protect these farming assets and to pass them down from generation to generation in a tax effective manner.
The trust is often established by formal document called a deed, with the key family members and their direct descendants (for example children and/or grandchildren) named as the beneficiaries of the trust. The farming property, farming equipment and other business assets are often owned by the trust, and the capital and income generated by these trust assets is distributed to one or more of the beneficiaries.
The advantages of this type of trust include: • They can be established for the benefit of a wide range of family members; • Can provide tax advantages; • Can protect the family group’s assets from the actions or liabilities of one family member (for example, if that family member becomes bankrupt); • May provide a way to pass family assets to future generations in a tax effective manner; • May provide some assistance if a person wishes to reduce the change of challenges to the Will of a senior family member.
Trustee
This is the person(s), institution or entity appointed to manage or hold property or money on trust for another person (the beneficiary) in accordance with the terms of a trust.
The trustee is the legal owner ,but not the beneficial owner of the trust property. The trustee’s duty is to carry out the terms of the trust in the best interests of the beneficiaries.
A simple example is where in a Will the executor(s) become the trustee of assets or money which the testator has instructed be held on trust for a minor child or children until they turn a particular age.
