Many people want to leave specific gifts when they die to a specific person like jewellery, a car or an amount of cash. But there are actually several types of gifts that can be formally made in your Will.
It is important to be clear about what you want to give in your Will. You don’t need to know the legal terms when you speak to us (that’s what we’re for!), but you do need to be clear on your intention for the gift.
Below, we discuss some of the categories of gifts that can be made and some terms you may have heard before and wondered what they mean.
Specific Legacy
A specific legacy is where you give someone something specific that you own, like shares or jewellery.
General Legacy
A general legacy is typically money, but can be specific items (even items you don’t own but want purchased and given).
For example, “I give $50,000 to my nephew” – that gift will come from your “residuary estate” (that is, all the cash and assets (sold or as they are) that remain in your estate after all specific gifts.
Other examples:
– “I give 1000 Telstra shares to my niece”
– “I give a new Toyota Hilux to my nephew”
As you have not said “I give 1000 of my Telstra shares” or “my Toyota Hilux” then this is telling your executor to go and purchase 1000 Telstra shares, or a vehicle matching that description, using funds from the residuary estate and to give that to your niece/nephew. Note – your niece/nephew may elect to take cash instead of the gift.
Demonstrative Legacy
This is a gift of a general nature (usually money) but which is to be paid from a specific fund or particular part of your estate but if there is not enough there then the shortfall will come from your residuary estate.
For example, “I give $10,000 to my nephew to be paid out of my bank account with Bank Australia”.
In that example, if you died and your account with Bank Australia only had $5,000 in it, then your nephew is to be paid the $5000 shortfall from your residuary estate.
What is a Pecuniary Legacy?
You may hear the term “pecuniary legacy” – this is really a way of saying a gift of money and such a gift can be one of the types of legacies noted above.
And what about “Devise” and “Bequeath”?
Both these terms are really just older terms for gifts. “Devise” is word meaning gift of real estate. “Bequest” is a gift of personal property. The specific terms don’t need to be used anymore.