When you create a will and gift property to your beneficiaries, the gifts you make typically fall into one of four general categories. These categories can impact how that property is treated during the probate process, so talk to your attorney for detailed advice about testamentary gift types and how they can affect your estate.
Category 1: Specific gifts. Specific gifts are exactly what they sound like, a specified property bequeathed to a specified person. For example, you may state that your grandson receive your vintage car, or your daughter your lithograph collection. These specifically identified items are specific gifts.
Category 2: General gifts. A general gift is less precise than a specific gift, but has a specific value. For example, you can give your son a gift of $50,000, though any $50,000 from your estate can satisfy the gift.
Category 3: Demonstrative gifts. Demonstrative gifts are general gifts with the addition of a specific source. For example, if you state your son’s gift of $50,000 should come from your savings account, this is a demonstrable gift.
Category 4: Residuary gifts. The final gift category is a catch-all intended to cover the property a testator didn’t otherwise account for. Residuary gifts are typically stated in a will as “The rest shall pass to X,” or “I give the residue or remainder of the estate to Y,” or with similar language. Residuary gifts transfer all the remaining property that the other gifts didn’t include.
- Alzheimer’s Care Tips: Get the Help You Need - January 18, 2022
- Living in a Digital World and the Importance of Planning for Cryptocurrency - January 5, 2022
- Don’t be a Turkey – Use Your Annual Per Donee Exclusion Amount - December 29, 2021