Most people have particular wishes about some items they own, usually being either high in sentimental or economic value. In drafting specific gifts into your will to feel comfortable that your wishes will come to pass, there are significant consequences where proper adviceis not sought or relied on.
What are ‘specific gifts’?
Specific gifts in a will are created by giving an identifiable item to a particular, identifiable beneficiary. This can be contrasted with a ‘residuary gift’ where any remaining assets you have are attributed to an identifiable beneficiary.
An example of a specific gift would be as follows:
I give my Royal Doulton china set with blue, hand-painted periwinkles to Sheridan Bucket.
(Points to those who get the pop culture reference!)
Potential issues with specific gifts
While specific gifts can be a key strategy in an estate plan, there are several issues that can occur with specific gifts.
Some of these issues include, but are not limited to:
- ademption of the gift (meaning the item does not exist anymore and the gift fails)
- issues around equality, where, for example, beneficiaries are each given specific assets that change in value over time (and the will is not updated)
- funding issues where, for example, specific cash gifts are left, leaving nothing for the residuary beneficiaries
- the associated physical and financial costs of having to update your will when issues relating to the specific gifts change (the item itself changes in nature, value or fails to exist or where circumstances of the beneficiaries and your objectives vary)
Each of the above should be considered when determining the utility of specific gifts in your will.