Specific bequests leave a particular item to someone. They are usually the most protected from debts, but can be subject to ademption if the asset is sold, lost, or given away before the person passes away.
General bequests leave a specific amount of money to a beneficiary
Demonstrative bequests name the account where the money will come from. They are more vulnerable to debts, but generally not subject to ademption.
Residuary beneficiaries are given everything that is left over after all debts are paid and other bequests are distributed.
If your loved one had a will that named you as a beneficiary, they will have designated the property they are giving you in one of four ways. Each is a kind of bequest—a gift given in a will. Knowing about all four will help you understand your loved one’s wishes and how best to honor them now that they have passed.
A specific gift is any bequest that directly names an asset and the beneficiary who is meant to receive it. This is often the type of gift that comes to mind when people think of a will. An example of a specific gift would be someone writing in their will that a treasured stamp collection should go to their grandson. In this instance, the named asset is the stamp collection and the named beneficiary is the grandson.
When it comes to specific gifts, the gift itself can be almost anything, from a car or a home to artworks or jewelry, to photographs or even a beloved baseball cap. The person leaving the will, or testator, can choose to include whatever they want, as long as it’s an asset that they legally own.
The description of the item in the will can be as broad or specific as the person chooses, but generally it’s only as detailed as it needs to be so everyone understands exactly what is being gifted. Financial gifts, for instance, should be described with enough detail to make the account identifiable without including the account number itself.
It’s even possible to name a beneficiary to receive specific digital assets like online photo albums or the contents of an online account such as PayPal, or even cryptocurrency. In the case of gifting digital assets, the will should also include directions for how to access those accounts; otherwise it could prove difficult or even impossible to do so.
The second type of gift is called a general gift. General gifts are typically monetary gifts in which the amount of money is specified along with the beneficiary, but there isn’t necessarily a named source. So a general gift might state “I leave $5,000 to my niece, Jane Doe,” without indicating which account this money should come from.
A demonstrative bequest is similar to a general gift in that it is typically a monetary gift, but the source of the money is named. If the will states, “I leave $5,000 dollars to my niece, Jane Doe, to be taken from my primary checking account,” this is a demonstrative gift, as is “I leave $5,000 dollars to my niece, Jane Doe, to be taken from the proceeds of the sale of my stock in IBM.” The only difference between a demonstrative gift and a general gift is whether the source of the money is specified.
The last type of bequest is called residuary. This is when the will outlines that after all of the estate’s debts have been paid and estate administration costs covered, and after all of the specific, general, or demonstrative gifts have been given to the appropriate beneficiaries, whatever remains is left to a specific beneficiary or beneficiaries.
The only difference between a demonstrative gift and a general gift is whether the source of the money is specified.
Residuary beneficiaries will receive everything not named in other bequests, so anything that is not directly accounted for will go to them. This can include anything that has been overlooked, anything that’s acquired after the will is made, and anything that can’t go to a person named in a specific bequest.
In some states, if one of the beneficiaries of a specific bequest dies before the testator, that asset or item rolls over to the residuary beneficiaries. However, other states have “anti-lapse laws,” which state that if a beneficiary dies before the will is executed, any bequests will not be included as part of the residuary estate, but will pass down directly to their own heirs. Because there are so many opportunities for confusion, estate lawyers advise testators to avoid these issues by naming alternate beneficiaries. If you are unsure about your status, be sure to consult a local estate attorney about the laws particular to your area.
If you have been named as a beneficiary of any of these types of bequests, you are entitled to certain rights. First, the executor must notify you of your status as a beneficiary. They must also tell you what you have inherited, but they do not have to disclose the full contents of the will. Once the will is filed for probate, however, it becomes a public document, so anyone—you, the other beneficiaries, and the general public—can access it. If you are curious if the will contains items that don’t directly apply to you, you may obtain a copy of the will and read it for yourself.
You are also entitled to receive your inheritance within a reasonable amount of time. In general, one year is considered reasonable. If for any reason you believe there has been an unreasonable delay in the distribution of your inheritance, you can contact the probate court, which will then require the executor to give a convincing explanation for the holdup. If there is no satisfactory explanation, you and any of the other beneficiaries can petition the court to replace the executor with someone else who will take over the distribution and settlement of the estate.
Although the will is meant to serve as a directive for what happens to someone’s assets after they die, there are some situations in which what the will states and what is legally required are at odds. If a person dies with debts that exceed the value of their estate, there is a chance that even if beneficiaries have been named, they could receive some amount less than, or even none of, what is outlined in the will.
When there is an issue with the distribution of the gifts—either due to lack of funds or change of ownership—this is where the classification of the types of gifts becomes important. When it comes to creditors, specific gifts are often the most protected, followed by demonstrative gifts, general, and then residuary. So if there are debts owed against the estate, the money to pay them will typically first be taken out of any residuary funds, then general, then demonstrative, and finally specific assets, unless the will states or implies otherwise.
On the other hand, if the item named in a specific bequest is no longer in the possession of the testator, or even no longer exists, at the time they pass away, the beneficiary loses out, an issue known as ademption. They cannot claim the value of the specific bequest from the residuary estate. Beneficiaries of demonstrative bequests, however, are often protected from ademption; if the bank account that their gift was named as coming from, for example, was no longer in existence, the beneficiary can claim their bequest from the residuary estate.
As you go through this process, remember that every family, every person, and every will are different, so while you may expect events to unfold in a certain way, it can vary a great deal based on local laws and the status of your loved one’s estate. If you need to understand more about the bequests in a loved one’s will, reach out to an estate lawyer or other professional who can advise you on your best course of action ●
Whether or not your loved one left a will, you will need to make sure their property is passed on to the right people. With a will, inheritance will follow your loved one’s wishes; without it, state law will decide. Either way, following these rules will ensure that your loved one’s life and legacy are properly honored.