As estate planning attorneys, we often meet prospective clients who understand the benefits of making a will and why it needs to be part of their estate plan. Their initial interest in a consultation is understanding the mechanics of the process – how is a will actually prepared. There are many do-it-yourself will forms available for sale in the office products section of many retailers and online. The problem with these options is that they do not offer legal advice related to how you should prepare your will. Because these options try to create a one-size fits all document, if your property or assets don’t fit within one of the categories, you are back to square one trying to understand how your will should be prepared.
A will is the legal method to gift heirs, friends, staff, and institutions upon your death. You will have to decide what property or asset to gift and to whom. As the world becomes more digital it is important to understand what a digital asset is and know whether it can be gifted or bequeathed in a will. Here, is what you need to know about making will gifts.
Four types of will gifts
The legal term for a gift in a will is bequest. Any bequest you make is sorted and placed into one of the four categories:
- Specific Gift: A specific gift is an identifiable item that can be easily distinguished from other property. For example, if you own a hope chest that was passed on to you by your maternal grandmother and gift it to your granddaughter Heather in your will. The specific gift is the hope chest and it is identifiable because it is the one your maternal grandmother gave you.
- Demonstrative Gift: A demonstrative gift identifies property from a specific source, even though it does not identify the individual gift. In those types of scenarios, more than one item in a category exists. Take for example a baseball card collection. You may want to leave a baseball card to each of your grandchildren but want to give them the option of choosing the card they want for themselves. The source of the gift is identified (the baseball cards) but not the individual card (1916 M101-4 / M101-5 #151), the first baseball card to show Babe Ruth in the pros playing for the Boston Red Socks.
- General Gift: General gifts can be money or a specific value that can come from any source. For example, you might choose to give each of your four grandchildren $50,000. This is a general gift because it doesn’t specify from where that $50,000 should come.
4. Residuary gifts: A residuary gift is often called a residuary clause and it is the place any assets or property that were not gifted specifically, demonstratively, or generally, are place for distribution to a specific person or entity, like a church or charitable organization.