When making a Will there are two main types of gifts that can be given. Specific Gifts and Residual Gifts. In this week’s blog we examine gifts in a Will and why it is important to ensure that your Will is drafted correctly.
Specific Gifts in a Will
Specific gifts in a Will is a particular gift given to a particular person. For example, “I give my wedding ring to my daughter, Amy.” The gift can be anything that you own at the time of your death. Specific gifts are distributed from your estate before residual gifts are given.
Examples of Specific Gifts in a Will:
- An amount of money.
- A particular item or items. For example, a piece of jewellery or artwork or your record collection.
- Property or shares.
- A gift or amount of money to charity.
- You can even forgive a debt that is owed to you.
There are certain things to keep in mind when making specific gifts in a Will. The value of the gift may increase or decrease over time. The perfect example of this is property and shares. You should keep this in mind if you wanted to give gifts of equal value to different people.
You can only give away in your Will items owned at the time of your death. If you were to sell or give away a specific gift your intended beneficiary would not receive anything.
The specific gift and the beneficiary need to be clearly stated in your Will. For example, “I give my wedding ring to my daughter” is not clear if you have more than one daughter. The gift would then fail.
When leaving gifts in a Will to a charity the full name, ACN and business address of the charity is needed. It is also a good idea to state what happens if your chosen charity no longer exists.
Any specific gift that fails to be given under your Will is then included in the residual gifts.
Residual Gifts in a Will
Residual gifts in a Will is what is left over in your estate after debts, death expenses and specific gifts are paid or distributed. In your Will it is referred to as ‘the rest and residue’ of your estate.
You can give residual gifts to one person or a group of people. This may be in equal or unequal shares. A typical example is that you leave the rest and residue of your estate to your spouse. If your spouse has already passed away it is left to your children in equal shares.
It is important that residual gifts are left to someone in your Will. If there is no provision made for residual gifts then the legal formula in the Succession Act 2006 is used to work out who gets the rest and residue of your estate. For more information on this formula see our blog “If I Die Without a Will the Government Gets My Money.”
Reviewing Specific Gifts in a Will
You should review your Will from time to time to ensure that any specific gifts are still relevant to you. Do you still own the specific gift? Has the specific gift increased substantially in value? Is the specific gift still able to be clearly identified? If your circumstances have changed you should consider updating your Will.
Sharpe Legal and Conveyancing are able to advice you on specific gifts and updating your Will. To make an appointment at a time convenient to you call our office today on (02) 4605 1501.
The contents of this publication is for reference purposes only and should not be relied upon as legal advice. Specific legal advice should always be sought to take into account your individual circumstances.