Types of Testamentary Bequests
There are four types of testamentary bequests:
- general, and
The classification can be relevant if the estate is too small to accommodate all the bequests. The category of bequest will determine the order that the gifts are distributed, after paying the administrative expenses and creditors’ claims (see “abatement” in the next section).
A specific bequest or devise is a gift of a specific item of property that can be easily identified and distinguished from all other property in the testator’s estate. See, e.g., Crawford v. McCarthy, 159 N.Y. 514 (1899). Given the specificity of the gift, another item cannot be substituted to satisfy the bequest, if the item no longer exists (see ademption in the next section). See, e.g., Moffatt v. Heon, 136 N.E. 123 (Mass. 1922).
EXAMPLE: Douglas made the following bequests in his will: “to my niece, Dana, my home at 78 Winters Court”; “to my nephew, Alistair, my Rolex watch”; “to my sister, Tami, all my household furnishings from 78 Winters Court.” These gifts are all examples of specific gifts because they describe specific property. See, e.g., Haslam v. Alvarez, 38 A.2d 158 (R.I. 1944).
A specific bequest can also take the form of property located at a particular location, although the exact amount of the gift is unclear.
EXAMPLE: Tami made the following bequest in her will: “to my brother, Douglas, the contents of my safe deposit box at PNC Bank in downtown Pittsburgh, PA.” Although the exact amount of the gift is unclear, the property is easily identifiable and distinguishable from the other property that might be in Tami’s estate.
Direct gifts of a particular stock can cause problems. As anyone who follows the stock market knows, stocks are subject to radical value fluctuations. Additionally, splits, dividends and mergers are common. To further clarify the testator’s intentions regarding stock bequests, some additional language may be worthwhile.
EXAMPLE: Frazier made the following bequest in his will: “I bequeath to my niece, Carmela, all of the stock (if any) in AOL or its successor (whether by change of name, consolidation, merger or otherwise), owned by me at the time of my death.” Since AOL merged with Time Warner, AOL no longer exists. Instead, the company is now known as AOL Time Warner (unless, of course, the AOL name gets dumped, as is the idea currently being bandied about). This added verbiage allows for the smooth disposition of the stock, if Frazier still owns the stock at his death. Tracing a name change is much easier than determining what stock Frazier meant to distribute in the first place.
A demonstrative bequest is a gift of a certain amount of property from a specific source or a particular fund.
EXAMPLE: Nelson made the following bequest in his will: “I bequeath $10,000 to my niece, Carmela, to be paid out of the proceeds from the sale of my stock in General Electric.” See, e.g., Shamberger v. Dessel, 215 A.2d 177 (Md. 1965). Here, the amount of property is certain and the source is specific.
A demonstrative bequest possesses characteristics of both a specific and general bequest (see next section), in that it is subject to ademption (see next section) or partial ademption if the property or fund from which it is to be paid is no longer in existence at the time of the testator’s death. Unlike a specific bequest, if the property is disposed of before the testator’s death, the beneficiary will receive the gift from the general assets of the estate.
EXAMPLE: Nelson made the following bequest in his will: “I bequeath $10,000 to my niece, Carmela, to be paid out of the proceeds from the sale of my stock in General Electric.” Nelson sold all his General Electric stock two years before he died. Although the $10,000 bequest was to come from those proceeds, Carmela can instead receive the $10,000 from other assets in the estate.
A general bequest is a gift of property payable from the general assets of the testator’s estate.
EXAMPLE: Nadia made the following bequest in his will: “I hereby give $5,000 to my niece, Gillian.”
Typically, a general bequest is a gift of a stated sum of money. Yet, a bequest of stock or securities may also be classified as a general bequest. See, e.g., In re Malone, 257 N.Y.S. 837 (Sur. Ct. Queens Co. 1931).
A residuary gift is a gift of the remaining portion of the estate after the satisfaction of other dispositions, such as administration expenses, taxes and creditors’ claims, and all specific, demonstrative and general bequests.