Even though leaving a gift through last will and testament may seem fairly straightforward, there’s a lot that goes into the decision-making process. When you leave gifts through your will, you will have to decide on the type of gift that is appropriate. Here is a brief explanation of the four different types of will gifts, or bequests, you can leave.
The Specific Will Gift
A specific gift is what comes to mind when most people think about making a last will and testament. Specific kids name certain pieces of individually owned property. For example, you might own a collection of silverware owned by your grandfather that you want to leave to your eldest daughter. You can do this through a specific gift.
The General Will Gift
General will gifts are also fairly common. With general gifts, you don’t leave a specific piece of property, but instead identify a gift that’s payable from your general assets. In other words, a general gift is almost always a gift of money.
For example, let’s say you leave behind an estate worth $2 million. You also have three grandchildren. You might choose to leave a general gift that states that each of your grandchildren will receive $50,000. Because you are not stating a specific source from which that money originates, this type of gift is considered a general gift.
The Demonstrative Will Gift
Demonstrative will gifts lie between specific and general gifts. A demonstrative gift is usually a gift of money, but one that also identifies the source.
For example, let’s say you leave behind a house worth $500,000. A bequest that states your alma mater will receive a gift of $100,000 to be paid from the proceeds of the sale of your home would be a demonstrative gift.
The Residuary Will Gift
Sometimes an estate has some “left over” property that isn’t specifically accounted for in the will. This is called the residuary. A residuary gift clause simply gives that left over property to a specific beneficiary.
The Effect of Different Will Gifts
The main reason you should know about the different types of gifts you can make through your will is because these gifts can be treated differently when it comes time to settle your estate.
For example, if you leave a specific gift to one child and a general gift to another, the specific gift might not be in your estate at the time of your death. This could mean that the child who would have received that gift will receive nothing at all, while the child who receives the general gift still inherits, thus leaving an imbalance.
Your estate planning attorney can give you more information about how the different types of gifts affect your estate.