What Are the Different Types of Gifts Included in a Will?

Gifts in a will are known as bequests, and there are four different types. When someone is named as a beneficiary, the assets that are distributed to them are categorized into one of these four types of bequests. They include:

• Specific bequests 
• General bequests
• Demonstrative bequests 
• Residuary bequests 

When a bequest names a specific asset and the beneficiary who should receive that asset, it is known as a specific bequest. This type of gift might range from a cherished personal item or even a house. It is becoming increasingly common for digital assets to be named. The person who died, known as the testator, can generally name whatever they want in a specific bequest as long as they own the asset. 

General bequests are most frequently monetary gifts such as cash, but could include cryptocurrency. The testator may choose to give a specific amount of money to a beneficiary, but may not be specific enough to the source account where the funds are located. This means that the money can be taken from different sources in the estate as long as the indicated amount is provided to the beneficiary. 

When the source of the money is indicated, it is considered a demonstrative bequest. For example, if the testator indicates that the sum of money should be retrieved from a specific checking account or cryptocurrency wallet, this would be a demonstrative bequest. The testator may also indicate that certain assets can be sold and the proceeds from those sales can be used to pay the designated amount to their beneficiary. 

Sometimes the testator might indicate that specific beneficiaries can receive whatever assets remain after all debts, expenses and gifts have been paid and distributed. This is considered a residuary bequest and means that those named beneficiaries receive any assets that are not already accounted for in other bequests. In some states, any specific gifts that were intended for named beneficiaries will be moved to residuary beneficiaries if the original beneficiaries die before the testator. However, state laws regarding residuary bequests can vary, so it’s important to check what is applicable where the testator resides. 

There is a wide variety of assets that can be distributed to beneficiaries and designated as each of these gift types. Each type of gift in a will has a specific purpose and clarifies how the associated assets should be distributed to the beneficiaries. Understanding the differences between these types of gifts ensures that those who are navigating estate planning can accurately communicate their last wishes to their intended beneficiaries through their will. 

Sources

“Gifts in a Will: Early Inheritance & Gift Tax in Canada”. Willful. https://www.willful.co/learn/all-about-specific-gifts 

“Personal Gifts In a Will”. Legal Match. https://www.legalmatch.com/law-library/article/personal-gifts-in-a-will.html 

“Types of Gifts In a Will”. Empathy. https://www.empathy.com/will/types-of-gifts-in-a-will