Debunking The Common Jargon Found in Estate Planning

When most people think about estate planning, the first thing that comes to mind is the creation of a Will. However, there are many other aspects to estate planning that are just as important but can often be confusing for those who are not familiar with the terminology and jargon.

In this blog, we debunk some of the most common jargon found in estate planning to help you understand what these terms mean, so you can make better decisions about your estate plan and ensure that your assets and loved ones are protected when the inevitable time comes.

Common Terms and Definitions

Common Term (Jargon)	Definition
Administration Act 1969	A piece of legislation that regulates the administration of Wills and Trusts. This legislation is also relevant when the deceased has no Will.
Advisory Trustee	A person who assists the Executor of your estate but holds no legal or financial responsibility.
Asset Threshold	The legal threshold of assets totalling more than NZD$15,000 that requires estate administration.
Assets	An item of property owned by a person (or company) regarded as having value.
Beneficiary	Any person or organisation who will benefit under a Will.
Bequests	A gift that is made as part of a valid Will or Trust. They are usually left in the form of a specific item or items.
Creditor	A company or person to whom money or other assets are owed.
Enduring Power of Attorney (EPA) Note: an EPA is not valid after you have passed.	An EPA for personal care and welfare is a legal document that gives someone you nominate the power to make decisions about your health and welfare if you're unable to.
	An EPA for property is a legal document that gives someone you nominate the power to look after your money and property if you become unable to.
Estate	Everything (land and real estate, possessions, financial securities, cash, and other assets) that the individual owns in their name only.
Estate Administration	The legal process which arises when a person has assets totalling over NZ$15,000 at the time they pass away. This process happens whether there is a Will in place or not.
Executor	The person or organisation in charge of distributing your estate according to your wishes after you pass. They are legally and financially liable for making sure the process is followed to a T.
Guardian	A guardian appointed by a Will (testamentary guardian) can make key decisions such as where your child lives, goes to school, or any changes to their name, but it doesn’t automatically mean they’re responsible for the day-to-day care (custody) of your children. Note: Guardianship is only valid while the child is under 18 years of age. You can also leave a guardian for a pet in your Will.
Intestate	Is where an individual passes away without a valid Will in place.
Legacy	A gift (bequest) in a Will.
Probate	The process where a court verifies a Will’s legitimacy and legally appoints the executor to administer the estate.
Statement of Wishes	A non-legally binding document that accompanies a Will to help guide your executor on your wishes and intentions.
Substitute (or backup) Executor	A backup executor that can assume the position of the executor if your first choice can’t or doesn’t want to do the task at the time of passing.
Testator	The formal name for an individual who has made a Will.
The Family Protection Act (FPA)	A piece of legislation that allows individual family members who have not been adequately provided for under a Will to seek provision from an estate for maintenance and support.
The Property Relationships Act (PRA)	A piece of legislation that sets out the rules for how property owned by either or both partners is divided when they separate or when one of them dies. Note: this legislation applies to marriages, civil unions and de facto relationships.
Trust	A trust is a legally binding arrangement when a person (the settlor) transfers legal ownership of assets to certain chosen people (trustees) to be held on trust for the people named by the settlor (the beneficiaries).
Will	A legal document that expresses an individual's wishes after their passing.
Witness	An individual who signs (one of two needed) a Will to confirm that the testator is the same person who is signing the Will. A witness must not be mentioned in the Will.

Learn more about Wills and Estate Planning

While the language used in estate planning can be confusing, it is important to have a plan in place in order to ensure your loved ones are taken care of. If you’re thinking about creating a Will or updating an existing one, explore our Will packages and Will information to learn more about creating your Will through Footprint.

If you have any questions about creating a Will or want help understanding the terminology, get in contact with us today.