Throughout the Legal System professionals use acronyms to shorten long legal terms. In our legal sector (Estate Planning and Will Writing), it is no different. We have drawn together a list of terms and abbreviations to help you get to grips with estate planning. This is by no means an exhaustive list and our friendly team are happy to explain any terms to you if you have any questions or if there is a term that you are not sure about and it is not on our list. Just send us an email, or contact us on our website.
APR Agricultural Property Relief
Agricultural property relief (“APR”) is a relief from Inheritance Tax granted under the Inheritance Tax Act 1984 which is granted where there are farms, farm buildings and
APT Asset Protection Trust
An Asset Protection Trust (APT) also known as a Family Asset Protection Trust (FAPT) is a trust which is set up in lifetime and is used to ringfence assets like your house, cash or investments.
BMT Bereaved Minors Trust
A bereaved minor’s trust is a will trust that is created for a child under 18, at least one of whose parents has died
BPR Business Property Relief
Business Property Relief is an Inheritance Tax relief that can reduce the value of relevant business property when it’s transferred either in life or death. The property transferred must meet certain criteria.
BYPT Bereaved Young Persons Trust
This is another acronym for a Bereaved Minors Trust (see above)
CGT Capital Gains Tax
Capital Gains Tax (CGT) is a tax you pay on the profit you make when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.
COP Court Of Protection
The Court of Protection is a legal court which decides on matter relating to mental capacity, deputyship, guardianship and is particularly important when someone doesn’t have a Lasting Power in Place.
DDT Disabled Discretionary Trust
A Disabled Discretionary Trust is set up when someone wants to make provision for someone with a disability. It’s managed by trustees who have the discretionary power to make decisions in the best interest of the disabled beneficiary.
DOT Declaration of Trust
A Declaration of Trust is a legal document (a trust deed) which records the investment contributed towards a property purchase, and what should happen to this money in the future where multiple people (more than one) have purchased together.
DOV Deed Of Variation
It is possible to vary the effects of a Will after someone has died (with consent from the affected beneficiaries) and this is done through a Deed of Variation. It must be done within 2 years of the date of death of the testator.
DT Discretionary Trust
There are multiple types of Discretionary Trust and many reasons for setting them up but essentially they are used to give the appointed trustees power to manage the trust for the benefit of specified people or a group of people.
EPA Enduring Power of Attorney
This was a document set up prior to the introduction of the Lasting Power of Attorney appointing attorneys to manage the financial affairs of the person setting it up. They’re becoming less common and no longer being created.
This is a person or organisation appointed in a Will to manage the administration of an estate after someone has passed away.
FLIT Flexible Lifetime Interest Trust
A Flexible Life Interest Trust is a Will based trust which allows a person to benefit immediately upon the death of a testator, at the same time protecting the value of assets for others. This is very similar to a discretionary trust.
GOP Grant Of Probate
This is the legal power granted by the Probate Court for an executor to administer an estate after someone has passed away.
GROB Gift with Reservation Of Benefit
This occurs when someone makes a gift but doesn’t fully ‘give it away’ and therefore keeps back some benefit for themselves. This can have an impact on your Inheritance Tax position.
HPT Home Protection Trust
Also referred to as an Asset Protection Trust (see above).
IHT Inheritance Tax
This is a tax paid after you’ve passed away is based on the size and value of your estate. Typically its charged at 40% on anything over £325,000.
IIP Interest In Possession
This refers to having receiving benefit from the income of assets managed in trust or from property in trust.
IPDI Immediate Post Death Interest
An IPDI is an ‘interest in possession'(referred to above) which means that the beneficiary has a right to the income arising from the trust assets or a right to occupy or enjoy the trust property.
JT Joint Tenants
Joint tenancy is a legal arrangement in which two or more people own a property together, each with equal rights, shares and obligations. When one of the owners in a joint tenancy dies, that owner’s interest in the property passes to the survivors. This isn’t suitable where one person has a larger interest in a property than the other(s).
LeO Legal Ombudsman
The Legal Ombudsman is a Gov boday and deals with public complaints across the entire legal sector.
LPA Lasting Power of Attorney
A Lasting Power of Attorney is an important legal document in which you (the donor) appoint attorneys (people you trust) and give them the power to be able to make decisions for you in the event that you cannot or will not.
LSB Legal Services Board
The Legal Services Board is an independent body responsible for overseeing the regulation of lawyers in England and Wales
NRB Nil Rate Band
This is the amount of money that you can pass to loved ones before paying Inheritance Tax. The current Nil Rate Bate is £325,000.
OPG Office of the Public Guardian
The Office of the Public Guardian (OPG) is a Gov body which helps people in England and Wales to stay in control of decisions about their health and finance and make important decisions for others who cannot decide for themselves.
PET Potentially Exempt Transfer
A Potentially Exempt Transfer (PET) enables an individual to make gifts of unlimited value which will become exempt from Inheritance Tax (IHT) if the individual survives for a period of seven years
PPT Protective Property Trust/ Property Protection Trust
This is the most common type of trust we write into Wills and they serve to protect a share or portion of a property in order that it can be passed onto specified beneficiaries.
PR Personal Representative
A Personal Representative is a person appointed by a court to administer the estate of another person
PSB Professional Standards Board
The Society of Will Writers are constituted to have a council of members or individuals who oversee the work of the SWW. The individuals are called the Professional Standards Board.
RNRB Residential Nil Rate Band
The Residence Nil Rate Band is an additional band over and above the standard nil rate band, which applies to qualifying residential property held at death meaning you can pass even more to children or your spouse without being subject to IHT.
SWW Society of Will Writers
This is the Self-Regulatory body to which we are members of. We adhere to the Society’s Code or Practice and provide them with proof of insurance and training of an annual basis.
When we write a Will for someone, they are known as the testator.
TIC Tenants In Common
This is the alternative to holding property as Joint Tenants. Tenants in Common is common where two or more people have different shares in a property (for example 70%/30%).
TNRB Transferable Nil Rate Band
A transferable nil rate band is an allowance (the nil rate band) that can be transferred to your spouse when not used. If they do not use this allowance then this can be transferred to their spouse or civil partner when they die.
VPT Vulnerable Persons Trust
This is a discretionary trust where the beneficiary is vulnerable. They might not be able to manage the trust assets themselves to trustees are appointed to make decisions in the best interest of the trust’s stated beneficiary.