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Because she was not born into royalty, she will assume Prince William's moniker and become Her Royal Highness Princess William of Wales, explains royal expert Laura Trevelyan in an interview with BBC America. Since William doesn't need or use a surname, like Oprah or Cher, there will be no hyphenated last names (Middleton-Windsor? Nope) or celebrity-esque mash-ups (Wate? Nuh-uh).
Also, the Queen will likely make William an Earl or Duke of a yet-undetermined region, such as Cambridge or Clarence, after the wedding. In that case, Kate could be Catherine, Countess of Cambridge or Catherine, Duchess of Clarence as well, although most commoners will refer to her as Princess Catherine regardless.
Just don't call her the Princess of Wales, Diana's former title. That's reserved for the wife of the Prince of Wales (William's father, Prince Charles). But his second wife, Camilla Parker-Bowles, adopted Duchess of Cornwall instead, out of respect for the late princess.
William has publicly stated that he will restore his mother's HRH title once he takes the throne. The Queen stripped Diana of the distinction after her divorce from Charles.
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