Types of Bequests There are four types of bequests which may be made in a will: (1) specific bequests, (2) demonstrative bequests, (3) general bequests, and (4) residuary bequests.
Specific Bequests – Specific bequests are those that allocate a particular asset to a particular beneficiary. This bequest can include personal effects, jewelry, collectibles, automobiles, and real property, among other items. In many estates, with the exception of real property and liquid assets, such bequests may be made by a handwritten note or memorandum rather than in the will itself. In the general will, a clause should be used to dispose of personal effects not mentioned in any such note or memorandum. This clause should either provide for the disposal or sale of such property. If such property is to be divided among estate beneficiaries, such as children, such shares should be approximately divided subject to the discretion of the executor in the event of a disagreement over who shall take a particular item. This particular direction is important as it is virtually impossible to divide property equally.
Demonstrative Bequests- These bequests include precise distributions from or of a particular asset. Examples would include “100 shares of General Electric stock" or “$10,000 to be paid from my mutual fund at Salomon Smith Barney". An attorney must be very careful to ascertain the intent of his client in the event this particular asset is sold or is subject to a change in name. When distributing stocks or funds, it is advisable to state that the bequest of the stock in a company shall survive in the event the company is acquired by another entity.
General Bequests – A general bequest is a precise dollar amount not designated from any asset. In making such a bequest, as well as a specific or demonstrative bequest, an attorney should evaluate the need to adjust this bequest should the value of an estate increase or decrease. For example, if a client is concerned that his or her assets may dissipate, the attorney can draft language tying in the bequest to a percentage of the estate as a limit. As such, if the size of the estate decreases substantially, the bequest can be adjusted downward as well. This drafting philosophy is important in protecting the distribution to the residuary beneficiaries who are typically the most important to the client.
Residuary Bequests – This bequest includes all property not disposed in the other three forms of bequests and usually represents the bulk of the estate.
Contingent Beneficiaries In the event a beneficiary predeceases the client, direction must be given as to the disposition of property. As such, an attorney should note whether contingent beneficiaries will inherit or whether the bequest shall lapse.