Wealth glossary: forty terms families and their advisers actually use
Forty terms from estate, trust, tax, family office and legacy planning, each defined in sixty words, with the country where the meaning shifts and the article that treats it in full. Every first use of a term across the wealth hub links here.
General information, not advice.
B
Binding death benefit nomination
A written direction to an Australian superannuation fund naming who receives a member's death benefit. If it is valid and current, the trustee must follow it; a non-binding nomination only guides the trustee. Many lapse after three years unless the fund offers a non-lapsing form, and a lapsed nomination hands the decision back to the trustee.
Where it changes: Australia. The UK equivalent is an expression of wish, which pension trustees can override. US retirement accounts use beneficiary designations, which bind.
Read: Pension and super death benefits: the tax trap most families miss
Buy-sell agreement
A contract between the owners of a business that fixes what happens to an owner's share when they die, lose capacity or leave: who buys it, at what price, and how the purchase is funded. Life and disability cover usually funds it, so the family is paid and the remaining owners keep control.
Where it changes: the US distinguishes cross-purchase from entity-purchase structures; the UK and Australia often call the same arrangement shareholder protection.
Read: Buy-sell agreements and shareholder protection: the funding question
C
Capacity (testamentary and financial)
The legal ability to make a particular decision at the time it is made. Testamentary capacity means understanding what a will does, roughly what you own, and who might expect to benefit. Financial capacity is assessed separately, decision by decision. Capacity can be lost gradually, and some documents can only be signed while it is present.
Where it changes: England and Wales, Australia and Canada still apply the 1870 Banks v Goodfellow test for wills; England and Wales add the statutory test in the Mental Capacity Act 2005 for other decisions.
Read: Capacity, dementia and the power of attorney: decide while you can
Charitable remainder trust
A US irrevocable trust that pays an income to you or your beneficiaries for life or a fixed term, then passes what remains to charity. The donor takes an income-tax deduction for the value of the remainder in the year of the gift, and appreciated assets placed in the trust can be sold without immediate capital gains tax.
Where it changes: a US instrument. The UK, Australia and Canada reach similar ends through charitable trusts, ancillary funds and gifts of residue, with different tax results.
Read: Philanthropic wealth across generations
Community property
A marital property regime in which most assets acquired during the marriage belong to both spouses equally, whoever earned them. At death, only the deceased spouse's half passes under the will; the survivor already owns the other half. It changes what an estate actually contains before any planning starts.
Where it changes: nine US states, France's default regime, Brazil's partial community regime, and parts of Spain. England, Australia and most of Canada use separate property with claims at divorce or death instead.
D
Deemed disposition
Canada's substitute for an inheritance tax. At death a person is treated as having sold every capital asset at market value the moment before, and any gain is taxed on the final return. Assets left to a spouse or spousal trust roll over at cost, deferring the tax to the survivor's death.
Where it changes: Canada. Australia taxes the gain later, when the heir sells; the US wipes it with a step-up in basis; the UK rebases at death but charges inheritance tax instead.
Read: Passing on wealth in Canada
Discretionary trust (family trust)
A trust in which the trustee decides which beneficiaries receive income or capital, how much, and when, from a class the deed names. Nobody has a fixed entitlement, which is the point: assets are held for the family, not by any one member, and income can be directed where it is taxed least.
Where it changes: the standard family vehicle in Australia and New Zealand. In the UK it sits inside the relevant-property regime with charges every ten years; in the US the nearest cousin is the irrevocable trust with discretionary distributions.
Read: Trusts and structures: what each one protects, and what none of them carries
Donor-advised fund
A giving account held at a sponsoring charity. You contribute, take the tax deduction in that year, and recommend grants to charities over the years that follow. There is no board, no filing and low cost, which is why it has overtaken the private foundation as the entry vehicle for family giving.
Where it changes: mature in the US; offered in the UK through the Charities Aid Foundation and others, in Canada through community and commercial foundations, in Australia as sub-funds of public ancillary funds.
Read: Donor-advised fund or private foundation, by country
Dynasty trust
A US trust drafted to last for several generations, or forever where state law allows, so that assets pass to grandchildren and beyond without estate tax at each generation. It relies on the generation-skipping transfer tax exemption and on states such as South Dakota and Delaware that have abolished the old limit on how long a trust can run.
Where it changes: most Australian states cap a trust at eighty years (South Australia has no cap); England and Wales allow one hundred and twenty-five years; the tax advantage is a US feature.
Read: Trusts and structures
E
Enduring power of attorney
A power of attorney that keeps working after you lose the capacity to make decisions yourself. An ordinary power ends at that moment; an enduring one is made for it. It is signed while capacity is present, names who acts and over what, and in most countries must be registered or witnessed in a prescribed way.
Where it changes: called enduring in Australia, New Zealand, Ireland and Hong Kong; lasting in England and Wales and Singapore; durable in the US; continuing or enduring by province in Canada.
Read: Capacity, dementia and the power of attorney
Estate tax and inheritance tax
Two different taxes that get one name in conversation. An estate tax is charged on the estate as a whole before anything is distributed; the US federal tax and the UK's inheritance tax both work this way. An inheritance tax is charged on the person who receives, often at rates that depend on how closely they are related.
Where it changes: Germany, France, Spain, Brazil and six US states tax the recipient; Australia, Canada, Israel, Singapore and New Zealand charge neither, taxing gains or nothing instead.
Read: Estate planning in seven countries
Executor and administrator
An executor is the person a will names to carry it out; the court confirms their authority by granting probate. An administrator is the person the court appoints when there is no valid will or no executor able to act; their authority is a grant of letters of administration. Both are personal representatives with personal liability for getting it right.
Where it changes: US states and the UK use "personal representative" for both; civil-law countries such as France and Germany usually have no executor unless the will appoints one, and heirs step into the estate directly.
Read: The executor's first ninety days
Executor Lock™
Timeless AI's instrument for the human estate. At the moment of transfer, a Personal AI Twin is frozen as a complete snapshot: every memory kept, nothing pruned or reweighted, the personality fixed from that day. The people the owner chose hold the key. New events can still be added around the edges; who the person is never changes again.
Where it changes: it does not. The lock is the same in every country; the estate documents around it are what vary.
Read: The intangible estate: judgement, values and voice as an asset class
F
Family constitution
A written agreement, not a legal document, in which a family sets out its purpose, its values, who counts as a member, how decisions are made, how conflicts are handled, and how the constitution itself is changed. It carries no force in court. Its force is that the legal documents stop being fought over.
Where it changes: the same everywhere; families with a business, a trust or an office use it most, and Singapore's family-office rules increasingly expect governance of this kind.
Read: Writing a family constitution
Family council
The body that governs the family, as distinct from the board that governs the business or the office that manages the money. It meets on a schedule, represents the branches and generations, decides family matters such as education, employment rules and philanthropy, and is usually created by the family constitution.
Where it changes: a governance practice rather than a legal form; identical in every country, and most developed in families with an office.
Read: The family office as the memory of the family
Family office
A private organisation that manages a family's wealth and affairs: investments, tax, legal, philanthropy, reporting and often the family's own governance. A single-family office serves one family and usually makes sense above about one hundred million dollars; a multi-family office serves several families and starts far lower.
Where it changes: Singapore, Switzerland, Dubai and several US states compete for offices with tax incentives, residence rules and privacy; the choice of base is a decision in itself.
Read: The family office and Where to base a family office
Forced heirship
Law that reserves a fixed share of an estate for certain relatives, whatever the will says. Where it applies, a parent cannot disinherit a child; only the free portion is theirs to give. It is the single largest difference between civil-law and common-law countries, and the first thing a family with assets abroad has to check.
Where it changes: France reserves half to three-quarters for children; Germany gives a money claim of half the intestate share; Spain reserves two-thirds under national law with regional variations; Brazil reserves half. England, Australia, Canada (outside Quebec), the US and Israel have none, and allow family-provision claims instead.
Read: Cross-border families and Passing on wealth in the European Union
G
Generation-skipping transfer tax
A US federal tax on gifts and bequests that skip a generation, typically from grandparent to grandchild, charged at the top estate-tax rate on top of any estate or gift tax. Each person has a lifetime exemption equal to the estate-tax exemption, which is what dynasty trusts are built to use.
Where it changes: a US tax with no equivalent in the other six countries, where skipping a generation carries no extra charge.
Read: Trusts and structures
Gift tax and the annual exclusion
In the US, gifts above an annual amount per recipient count against the lifetime estate and gift exemption and must be reported, though tax is rarely paid until the exemption is used. The annual exclusion lets a person give that amount to any number of people each year with no reporting at all.
Where it changes: the UK has no gift tax but counts gifts made within seven years of death for inheritance tax; Australia has none but limits gifts for pension means tests; Canada has none but treats a gift of a capital asset as a sale; Israel has none.
Read: Passing on wealth in the United States
Grant of probate and letters of administration
The court order that lets an estate be dealt with. A grant of probate confirms the executor named in the will; letters of administration appoint an administrator when there is no will or no executor. Banks, registries and share registers usually release nothing until they see the grant.
Where it changes: a court process in the UK, Australia, Canada, Singapore and US states; Israel issues inheritance or probate orders through the Registrar of Inheritance Affairs; much of Europe uses notaries and, across borders, the European Certificate of Succession.
Read: The executor's first ninety days
Guardianship of minors
The appointment, usually in a will, of the person who will raise your children if both parents die while the children are minors. Courts confirm the appointment and can override it if the child's welfare demands. It is separate from who manages the children's money, which is a trustee's job.
Where it changes: the mechanism is a will clause in the common-law countries; civil-law countries have similar declarations, and Israel's Legal Capacity and Guardianship Law governs appointment.
I
Intestacy
Dying without a valid will. Statute then decides who inherits and in what shares, usually a spouse and children first, then parents and siblings. The rules are rigid, ignore stepchildren and unmarried partners in many places, and give the family no say in who administers the estate.
Where it changes: every country has its own table. Singapore applies the Intestate Succession Act to non-Muslims and Islamic rules of distribution to Muslims; Israel's Succession Law 1965 sets the shares; US and Australian rules differ by state.
Read: Estate planning in seven countries
Investment policy statement
The written document that sets out how a family's or an office's money is to be invested: objectives, time horizon, risk tolerance, asset allocation, constraints, who decides what, and how performance is judged. It is the family's investment judgement in writing, which is why it survives a change of adviser or principal.
Where it changes: the same instrument everywhere; regulators in Singapore and elsewhere expect a family office to hold one.
Read: The family office
Irrevocable life insurance trust
A US trust that owns a life insurance policy so that the payout is not counted in the insured person's taxable estate. The trust pays the premiums with money the insured gives it each year, and the proceeds go to the beneficiaries free of estate tax, often to pay the estate tax on everything else.
Where it changes: a US structure. Australia holds cover inside superannuation or a trust with different tax results; the UK writes policies in trust so proceeds sit outside the estate for inheritance tax.
K
Key-person insurance
A policy a business owns on the life or health of a person whose loss would damage it: a founder, a chief executive, the one who holds the client relationships. The business pays the premium and receives the payout, which replaces revenue, funds a replacement, or reassures lenders while the business recovers.
Where it changes: whether premiums are deductible and proceeds taxable depends on the policy's purpose in Australia, on consent and reporting rules in the US, and on HMRC's tests in the UK. The number is easy; the tax treatment is where advisers earn their fee.
L
Letter of wishes
A private, non-binding letter from the person who set up a trust to its trustees, explaining how they would like the trustees' discretion to be used: who should be looked after first, what the money is for, what would worry them. Trustees are not bound by it, and good trustees rarely depart from it without a reason.
Where it changes: the same idea everywhere trusts exist; in the US the equivalent is often a statement of intent inside the trust document itself.
Read: Letter of wishes: what your trustees actually need from you
Liquidity event
The moment illiquid ownership becomes cash or marketable shares: the sale of a business, a listing, a large recapitalisation. Estate and tax planning done before the event, while the value is still uncertain and the shares are still private, can move a great deal to the next generation cheaply; the same planning after the event cannot.
Where it changes: every country has reliefs that turn on timing: US qualified small business stock and estate freezes, the UK's business property relief, Australia's small-business capital gains concessions, Canada's lifetime capital gains exemption.
Read: Wealth at scale: the liquidity event, the family office, and the next principal
N
Nil-rate band and residence nil-rate band
The parts of a UK estate on which inheritance tax is charged at zero. The nil-rate band is £325,000; the residence nil-rate band adds up to £175,000 when a home passes to children or grandchildren, and tapers away for estates above £2 million. Both bands can pass unused to a surviving spouse, so a couple can shelter up to £1 million.
Where it changes: United Kingdom only. The bands have been frozen since 2009 and are set to stay frozen until 2030, which is why more ordinary estates pay the tax each year.
P
Personal AI Twin
Timeless AI's term for a likeness of a person built from their own words, memories and recorded voice, that speaks the way they speak and answers the way they would. The person builds it while they live and owns it. It is not the person and never claims to be; it is what the person chose to keep, in their own voice.
Where it changes: who may make and control such a likeness is governed by different laws in each country; consent from the living person is the standard the product applies everywhere.
Read: The intangible estate and Who owns your AI likeness after you die
Power of attorney (durable, lasting, enduring)
A document that gives another person legal authority to act for you. A general power covers financial matters while you can still act yourself and ends if you lose capacity; an enduring, lasting or durable power is built to survive that loss. Health and personal decisions usually need a separate instrument, such as a health directive or a health-care proxy.
Where it changes: the names, the registration rules and whether one document can cover both money and health all differ by country and, in Australia, Canada and the US, by state or province.
Read: Capacity, dementia and the power of attorney
Private foundation
A charitable entity funded and controlled by one family, with its own board, making grants to causes it chooses. It offers control, a name that lasts and a place for the next generation to learn giving, in exchange for cost, filings and public disclosure. Most countries require a minimum annual payout.
Where it changes: the US private foundation must distribute about five percent a year; Australia's private ancillary fund has its own minimum; the UK uses charitable trusts and companies; Germany's Stiftung can serve private as well as charitable purposes.
Read: Donor-advised fund or private foundation, by country
Probate
The court process that proves a will is valid and authorises the executor to collect the estate, pay its debts and distribute what is left. It takes months, costs a fee that in some places scales with the estate, and puts the will on the public record, which is why Americans use revocable trusts to avoid it.
Where it changes: fees range from a flat charge in England to about one and a half percent of the estate in Ontario; Israel uses inheritance orders; Singapore's Family Justice Courts grant it; most of continental Europe has no equivalent step.
Read: The executor's first ninety days
Protector (trust)
A person or committee a trust deed appoints to watch over the trustees. A protector's powers vary: to remove and replace trustees, to veto distributions, to approve changes to the deed. Families use one when the trustee is a professional or an institution and they want a familiar hand on the brake.
Where it changes: common in offshore and family trusts across the common-law world; some US states now recognise the role in statute as a trust director or adviser.
Read: Trusts and structures
R
Revocable living trust
A US trust you set up during your life, control completely, and can change or cancel at any time. Assets you move into it pass at your death under the trust's terms rather than your will, which keeps them out of probate and off the public record. It gives no tax advantage; it becomes irrevocable when you die.
Where it changes: a US device for avoiding probate; in the UK, Australia and Canada probate is cheaper or simpler, and trusts are used for control and protection instead.
Read: Trusts and structures
S
Situs
Where an asset is, in the eyes of the law. Land is where it sits; shares are usually where the company is registered; a bank account may be where the branch is. Situs decides which country's succession law and which country's tax reach an asset, and it is why one will drafted at home can fail abroad.
Where it changes: it is the whole question for a family with assets in more than one country, and the reason cross-border plans often run two wills, one for each situs.
Read: Cross-border families
Special-needs and protective trusts
Trusts that hold money for a beneficiary who cannot safely hold it themselves. A special-needs trust supports a person with a disability without disqualifying them from public benefits; a protective trust guards a beneficiary from creditors, a divorce, an addiction or their own spending, by giving the trustee the discretion the beneficiary would misuse.
Where it changes: the US special-needs trust, Australia's special disability trust and the UK's disabled person's trust each have their own benefit rules; the protective trust is common to all.
Read: Trusts and structures
Step-up in basis
The US rule that an inherited asset takes its market value at the date of death as its new cost for tax, so the gain that built up during the owner's life is never taxed. Heirs who sell soon after pay little or nothing. It is the reason Americans are often advised to hold appreciated assets rather than give them away.
Where it changes: the UK rebases at death too, but charges inheritance tax; Canada taxes the gain at death through deemed disposition; Australia passes the original cost to the heir for assets bought after 1985, so the gain waits for the heir's sale.
Read: Passing on wealth in the United States
Superannuation death benefit
The payment an Australian superannuation fund makes when a member dies. Paid to a dependant, it is tax-free; paid to an adult child or anyone else who is not a dependant, the taxable part is taxed at fifteen percent plus the Medicare levy. Who receives it turns on the nomination, not the will, unless the nomination sends it to the estate.
Where it changes: Australia. The UK's pensions come inside inheritance tax from April 2027; US inherited retirement accounts must be drawn down within ten years by most heirs.
T
Testamentary trust
A trust created by a will, which comes into existence when the will-maker dies. Instead of an inheritance landing in a beneficiary's own name, it is held by a trustee on the terms the will sets: for protection from creditors and relationship breakdowns, for control over young or vulnerable heirs, and in Australia for the way income to children is taxed.
Where it changes: an everyday Australian instrument because of its tax treatment of minors; used in the UK and Canada for control; in the US the living trust usually does the same job during life.
Read: Trusts and structures
The three-estate model
Timeless AI's way of describing what a person leaves. The financial estate is what you own. The legal estate is how it is held and how it passes: wills, trusts, nominations, powers. The human estate is your judgement, your values, your stories and your voice, and the way you decide. The first two have a profession each. The third decides whether the other two survive.
Where it changes: the financial and legal estates change with every border; the human estate is the same in every country and is carried by none of their instruments.
Read: The Great Wealth Transfer, explained for families
Every term above belongs to the first two estates
The third, your judgement, your values and your voice, has no instrument in this list. The intangible estate explains what can be done about that, and the app is where it is done.