Different Types of Bequests in a Will or Trust

When the time comes for you to get your estate plan in order, the two most important questions you’ll need to answer is (1) who are you going to appoint as your Executor (and ideally a successor Executor)? And (2) how are you going to distribute your assets? In short, the gifting of your property through a Will or Trust is known as a “bequest.” Bequests can be as original and as varied as the person creating the estate plan, but here’s a breakdown of the 6 main categories of bequests.

• General Bequests: This type of gift describes a specific dollar amount, rather than naming a particular item of personal or real property. For example, a general bequest might read something like this, “I hereby leave the lump sum of $25,000 to my son, JOHN DOE.”

• Specific Bequests: A specific bequest is exactly what is sounds like—the gifting of a specific item of property. For instance, one might say, “I hereby leave my 3-carat solitaire diamond ring to my daughter, JANE DOE.”

• Residuary Bequest: Once your Executor has distributed all of your property through more specific bequest language, the “residue” is anything and everything that may be left over. This type of bequest would read like this, “I hereby leave the rest, residue and remainder of my estate to my daughter, JANE DOE and my son, JOHN DOE, in equal shares.”

• Demonstrative Bequests: A bequest of this type would include specific instructions for how a certain asset or a specific dollar amount is to be distributed. For example, “I hereby leave my son, JOHN DOE, $100,000 to be paid from my account at Charles Schwab.”

• Percentage Bequests: You guessed it—this bequest is exactly as it is titled. This type of bequest is better for clients who are concerned about possible fluctuations in the value of their estate and is often seen as a more “fair” way of making distributions. An example  of a percentage bequest would say “I hereby bequeath 10% of my estate to my daughter, JANE DOE.”

• Contingent Bequests: This type of gift is only fulfilled when certain conditions have been met. For instance, one might say, “I hereby leave $25,000 to my daughter, JANE DOE, once she graduates from an accredited university.”

By using different types of bequests in your Will or Trust, you can carefully craft how you’d like to distribute all of the property that makes up your estate. Call Davis, Davis & Associates today to set up your Estate Planning Consultation. (251) 621-1555