A bequest is a gift made as part of a will or an estate plan. A bequest gifts assets that may include cash, stocks, bonds, jewelry, securities, or other forms of property. This gift can be made to an individual, non-profit/charitable organization, foundation, school, church, or other organization.
What Are the Different Types of Bequests?
There are multiple ways to make a bequest within a will. A bequest can transfer a specific amount of cash, a percentage of an estate, or even the remaining value of an estate after all other bequests or debts are paid. Bequests typically fall into one of the following categories:
- Specific bequest, or a gift of a specific item like a painting, jewelry, car, or even cash.
- General bequest, or a gift taken from an estate’s general assets.
- Demonstrative bequest, or a gift from an explicit source, like a specific bank account.
- Residuary bequest, or a gift made up of the remainder of one’s estate after all debts and other bequests are paid.
Are There Benefits to Creating a Bequest?
Bequests present benefits that are advantageous to both the giver and receiver. A bequest allows an estate holder to retain control over his/her assets during his/her lifetime, while allowing the estate holder to make a meaningful and lasting impact in the future. Bequests are relatively simple to create, as they are usually outlined in one’s will, and are very flexible, allowing one to modify gift designations as they choose.
Bequests can also help settle an estate quickly and efficiently as they provide clear instructions on an individual’s wishes on how to distribute assets. Additionally, bequests are free from federal estate and income taxes.
How Do I Make a Bequest?
Creating a bequest is a fairly straightforward process. To make a bequest, you must leave instructions for the bequest either in your will or estate plan. First, decide what you wish to gift and to whom you wish to gift it. Then, include language in your will to make clear your wishes regarding the distribution of your assets. You should then notify your family or estate executor of your wishes so they understand your plan and can help enforce it.
It is advised you speak with an attorney specializing in probate and estate planning that can assist you in including bequests in your will so that you can make the lasting impact you intend to make in the future.
