Part of creating a will in North Carolina is deciding on the types of gifts you want to leave. Most people who create a will do not have a background in the law, and they simply want to leave gifts that they feel are fair and appropriate.
There are different types of gifts that you can leave through your last will and testament. Choosing the right type of gift is important, especially if there isn’t enough in your estate when it goes to probate. Though your estate planning lawyer will explain to you how each type of gift will be handled if there is not enough to go around, here’s what you need to know about the different types of gifts you can make through your will.
A specific gift is one of the most commonly employed types of will gifts, also known as bequests. When you make a specific bequest you decide to leave an identifiable piece of property to a specific recipient, known as a beneficiary. For example, if you have a prized painting, you might choose to leave that painting to your spouse. The specific bequest language you use will state both what the gift is and specifically identify who will receive it.
A general gift, as the name implies, does not specifically identify any individual piece of property. General gifts are usually gifts of money and therefore don’t need to identify, for example, the specific pieces of currency you want to leave. For example, you might choose to make a general gift by leaving each of your five grandchildren $10,000. Because you don’t state where this $10,000 will come from, this general gift will come out of the general assets your estate owns.
Demonstrative gifts are also common, and represent a type of hybrid between the specific and the general gift. Like a general gift, a demonstrative gift typically states an amount of money. Like a specific gift, the demonstrative gift also identifies a specific source.
For example, let’s say you decide to leave each of your grandchildren $10,000. You also decide that the $10,000 should come from the sale of your prized painting. Because you’ve given a specified sum and have identified the source from which that gift must originate, this is a demonstrative gift.
Finally, all wills should include a residuary gift. A residuary clause is kind of the safety net of will bequests. The residuary of your estate is all the property that you haven’t otherwise given to beneficiaries. Though there is no guarantee that your estate will have a residuary, the residuary gift bequest will give anything left over to a specified beneficiary(s).