Heirs & Order™
Legal documents are full of words nobody uses at the dinner table. Every entry here gives you the plain English meaning first, then the formal legal meaning, and where it helps, a real-world example.
Browse all 101 plain English legal terms.
Section 1
The person who creates a trust by putting something into it — usually a sum of money or an asset. They are the founder of the trust.
In legal terms: The person who establishes a trust by transferring property to trustees to hold for the beneficiaries. When courts interpret a trust, they look to the settlor's intention.
Example: You pay £10 into a new trust bank account and sign the trust deed. You are the settlor.
The person (or people) who manage the trust day to day. They make decisions about how the trust's assets are used, and must always act in the beneficiaries' best interests — never their own.
In legal terms: The legal owner of the trust property, holding it on behalf of the beneficiaries and bound by fiduciary duties and the trust deed.
Example: Your sister agrees to act as trustee. The trust's bank account and property titles go in her name — but none of it is hers to spend on herself.
A person (or charity) who can benefit from the trust. Beneficiaries don't control the assets; they receive the benefit of them.
Example: Your three children are the beneficiaries — the trust exists to support them.
The named, priority beneficiaries at the heart of a trust — usually your children — as opposed to the wider class (future grandchildren, spouses) who may also benefit.
The full group of people the trustees may choose to benefit in a discretionary trust. Being in the group doesn't guarantee receiving anything — the trustees decide.
Whoever receives the trust fund at the end of the trust if the trustees haven't already given it out. The safety net that stops a trust ever having nowhere for its assets to go.
A trusted person appointed to watch over the trustees. They don't run the trust day to day, but the biggest decisions — like changing trustees or amending the deed — need their sign-off.
Example: You appoint your oldest friend as Protector. If the trustees ever wanted to remove a trustee or add a beneficiary, they'd need her agreement first.
Two people sharing the Protector role with equal power, so no single person holds the oversight alone.
A solicitor, accountant, or trust company acting as trustee for a fee, bringing expertise and continuity that family trustees may not have.
A company (rather than an individual) authorised to act as trustee — often used for long-term, professional trust administration, since a company doesn't die or retire.
A trustee who simply holds the legal title to the assets while other people (the managing trustees) make all the decisions. A safe-keeper, not a decision-maker.
A person or company that holds an asset in their name on behalf of the true owner. The name on the paperwork and the real owner are different people, on purpose and lawfully.
Example: A nominee company is listed as the shareholder of your business, but a declaration confirms the shares are really held for your trust.
The person who truly owns and enjoys an asset, even when someone else (a nominee or trustee) holds the legal title.
The person with the power to appoint and remove trustees. Often the settlor during their lifetime — it's one of the most powerful roles in a trust.
The person legally responsible for raising your children if you die while they are under 18. Appointed in your will, not the trust deed.
A role found in some special trusts (mainly non-charitable purpose trusts) whose job is to make sure the trustees carry out the trust's purpose. Rare in ordinary family trusts.
Section 2
The legal document that creates the trust and sets out its rules: who the trustees and beneficiaries are, what powers the trustees have, and how long the trust lasts.
A formal legal document that must be signed and witnessed in a specific way to be valid. A deed carries more legal weight than an ordinary signed agreement.
The introduction of a deed — the numbered paragraphs (usually marked A, B, C) explaining the background and what the document intends to do. Scene-setting, not rules.
The part of the deed that actually does the work: the numbered clauses containing the binding rules and powers. Everything after the recitals.
The appendices at the back of a deed listing specifics — such as the named beneficiaries or the assets going into the trust — kept separate so the main clauses stay readable.
A private letter from the settlor guiding the trustees on how they'd like the trust run — priorities, values, when children should receive their shares. Not legally binding, but good trustees take it seriously.
Example: Your letter says you'd like each child to receive their share at 30, with education funded generously before then. The trustees aren't forced to follow it, but it shapes every decision they make.
A written record of a decision or understanding, kept with the trust papers — less formal than a deed.
The deed used to formally appoint someone into a role (such as a new trustee) or to give assets to a beneficiary under the trustees' powers.
The deed by which a trustee formally steps down.
A deed that changes the terms of an existing trust or redirects an inheritance after a death.
A deed by which a new person joins an existing agreement (commonly a shareholders agreement) and agrees to be bound by its terms.
A deed made by one person alone, declaring something about themselves — most commonly a change of name.
Section 3
The trustees decide who benefits, how much, and when, choosing from the defined group of beneficiaries. The most flexible structure and the most common choice for family wealth.
Example: One child needs university fees this year; another needs nothing yet. The trustees can fund the first and hold back for the second — nothing has to be equal at any given moment.
The simplest trust: the assets belong outright to the named beneficiary from day one, and the trustee just holds them. The beneficiary can demand everything at 18, and the arrangement cannot be undone.
One person (the life tenant) has the right to the income — for example, rent from a property — for their lifetime; the capital passes to others when they die. Often used in second marriages or to protect a family home.
Example: Your partner receives the rental income from a flat for life; when they die, the flat itself passes to your children.
A trust with special protective provisions (and favourable tax treatment) for a beneficiary who has a disability or receives means-tested benefits — payments help them without disrupting their support.
Can be cancelled. A revocable trust lets the settlor take the assets back — but because of that, HMRC and creditors generally still treat the assets as the settlor's, which seriously weakens the trust's tax and protection benefits.
Cannot be cancelled or undone. The assets have genuinely left your ownership — which is exactly what gives the trust its protective power.
Section 4
A legal arrangement where trustees hold and manage assets for the benefit of others, under rules set out in a trust deed. Legal ownership and real benefit are deliberately separated.
Everything held within the trust: the original assets, anything added later, and all the income and growth they produce.
The assets themselves — the property, shares, and lump sums — as opposed to what they earn.
What the assets earn: rent from property, interest from savings, dividends from shares.
When trustees keep the trust's income inside the trust and add it to the capital, instead of paying it out.
A payment of money or transfer of assets out of the trust to a beneficiary.
The highest legal obligation known to law: the duty to act solely in someone else's interests. Every trustee owes it to the beneficiaries.
Example: A trustee finds an investment that would pay them a personal commission. Fiduciary duty means they cannot take it without full disclosure and authority — the beneficiaries' interests come first, always.
The trustees' power to decide who gets what, when, and on what terms, from among the beneficiaries.
The trustees' power to pay out capital early to help a beneficiary — for example, towards a house deposit — before they would otherwise receive their share.
A Latin term meaning that if a beneficiary dies before inheriting, their share passes down to their own children, split equally between them.
Example: One of three children dies before the trust ends, leaving two children of her own. Her one-third share is split between those two grandchildren.
The maximum legal lifespan of the trust — 125 years in England and Wales. At the end, whatever remains must be given out. The period cannot be renewed, but beneficiaries can create their own new trusts with what they receive.
A gift where you keep some benefit for yourself — like giving away your house but continuing to live in it rent-free. HMRC treats it as still yours for inheritance tax.
Section 5
The clause allowing a professional trustee to be paid their usual fees from the trust fund for work done for the trust.
The trustees' right to be reimbursed from the trust fund for costs and liabilities properly incurred doing their job — so acting as trustee doesn't cost them personally.
The trustees' ability to hand defined tasks (like investment management) to professionals, while keeping the big decisions themselves.
The legal standard trustees must meet: the care and skill reasonable in the circumstances, with a higher standard for professionals.
A clause found in trusts that hold company shares, relieving trustees of the duty to supervise the company's day-to-day business (a duty established in a well-known court case). It lets a family business run without trustees second-guessing every decision.
Section 6
His Majesty's Revenue & Customs: the UK tax authority. Trusts are registered with HMRC and taxes are paid to it.
HMRC's online register of trusts. Most UK trusts must be registered; registration is free and produces a Unique Reference Number.
The reference HMRC issues when a trust is registered. Keep it safe — it's needed for all future trust dealings with HMRC.
The tax charged on a person's estate when they die, and on some lifetime gifts, above the tax-free thresholds.
The amount of an estate that is free of inheritance tax before any tax is charged.
A gift into certain trusts during your lifetime that can trigger an immediate inheritance tax charge if it exceeds your available tax-free allowance.
An inheritance tax charge certain trusts may pay every ten years on the value of the trust fund, reported to HMRC on form IHT100.
An inheritance tax charge that can apply when assets leave certain trusts between ten-year anniversaries.
An inheritance tax relief for qualifying business assets and shares in trading companies, reducing or removing the tax due when they pass on.
The equivalent relief for farmland and agricultural property.
Tax on the profit made when you sell or give away an asset that has gone up in value.
The tax paid when buying property or land in England and Northern Ireland over certain values.
The annual trust tax return filed with HMRC when a trust has taxable income or gains.
Section 7
The legal document setting out who inherits your estate, who administers it, and who cares for your children, taking effect on your death.
Everything a person owns at their death — property, money, possessions, business interests — minus their debts.
The person named in a will who carries it out: gathering the assets, paying debts and taxes, distributing what's left.
The umbrella term for whoever administers an estate: an executor (if there's a will) or an administrator (if there isn't).
The legal process of proving a will is valid and giving the executor authority to deal with the estate.
The official court document confirming that authority.
Dying without a valid will. Fixed legal rules then decide who inherits — which may not match what you would have wanted.
A short legal document making a small change to an existing will without rewriting the whole thing.
What's left of an estate after all debts, taxes, expenses, and specific gifts have been paid out.
A specific gift left in a will — a sum of money, an item, or a property.
Section 8
A legal document appointing someone you trust to make decisions about your finances, or your health and care, if you become unable to make them yourself. There are two types — property & financial affairs, and health & welfare — and each must be registered with the Office of the Public Guardian before use.
The person you appoint under an LPA. Nothing to do with American lawyers.
The person making the LPA — the one granting the power.
An independent person who must confirm, when an LPA is made, that the donor understands what they're signing and isn't being pressured. A legal safeguard, and a required part of every LPA.
The government body that registers LPAs and supervises attorneys and deputies.
The legal ability to understand and make a particular decision at the time it needs to be made. LPAs exist for the possibility of losing it.
Section 9
A company that exists to own things — usually shares in other companies, or property — rather than to trade itself.
Example: Your holding company owns 100% of your trading business and your rental property. The trading risks sit in the trading company; the assets sit safely above it.
A person running a business in their own name, with no legal separation between themselves and the business.
A private contract between a company's shareholders setting the rules for working together: selling shares, resolving deadlocks, paying dividends, and what happens if someone leaves or dies.
A company's public rulebook, filed at Companies House, governing how it is run.
The UK government agency where all limited companies are registered and their public records kept.
A share of a company's profits paid out to its shareholders.
Profits are shared in proportion to how many shares each person holds.
The directors decide each time whether to pay dividends and how much, rather than following a fixed formula.
An agreement that someone (usually a departing shareholder or director) will not set up or join a competing business for a set period after leaving.
Example: A 12-month non-compete means a departing co-founder can't open a rival firm across the road the week after selling their shares.
Drag-along lets majority shareholders force minority shareholders to join in selling the company; tag-along lets minority shareholders insist on being included in a sale on the same terms. Both protect people during a company sale.
The form used to transfer shares in a private company from one owner to another.
The contract between a company and one of its directors setting out duties, pay, and terms.
Section 10
The formal act of signing a document in the correct way so that it becomes legally effective.
The witnessing part of signing: the witness watches you sign, then signs themselves to confirm it.
An independent adult who watches you sign and confirms it with their own signature. For a trust deed, a witness must never be a beneficiary or anyone else signing the deed. Wills and LPAs have their own, stricter witnessing rules.
The final legal step that makes a deed binding — showing you intend to be bound by it, traditionally by handing it over. In practice, dating and exchanging the signed deed does this.
A photocopy that a professional (usually a solicitor, notary, or chartered accountant) has signed and dated as a true copy of the original. Typically £5–£20 per document.
The government body recording who owns land and property in England and Wales.
The Land Registry form used to transfer the legal ownership of registered property.
A way of co-owning property where, if one owner dies, their share passes automatically to the survivor(s) — it cannot be left to anyone else in a will.
Co-ownership where each person owns a distinct share they can leave to whoever they choose in their will.
These definitions are simplified explanations for general information, not legal advice. If a term you need isn't here, contact us and we'll add it.