Ways to make a bequest

There are generally eight accepted ways to make a bequest in your will or trust.

1. Specific Bequest: This is a gift of a specific item or cash amount to a specific beneficiary. For example, “I give my wooden baseball bat to my son, Jake.” If that specific bequest has been disposed of before death, the bequest fails and no claim can be make to any other property.
2. General Bequest: This is usually a gift of a stated sum of money payable out of the general assets of the estate. It will not fail, even if there is not sufficient cash to meet the bequest – even if other estate assets need to be sold. For example, “I give $30,000 to my daughter, Hannah.”
3. Contingent Bequest: This is a bequest made on condition that a certain event must occur before distribution to the beneficiary. For example, “I give $30,000 to my son Mark, provided that he enrolls in college before the age of 21.”
4. Residuary Bequest: This is a gift of all the “rest, residue and remainder” of your estate after all other bequests, debts and taxes have been paid. For example, let’s say that your estate is worth $600,000, and you intend to give a child $30,000 by specific bequest and the residuary estate to your spouse. If the debts, taxes and expenses are $100,000, there would only be $470,000 left for the surviving spouse. Most people prefer to divide their estates according to percentages of the residue rather than specifying dollar amounts to ensure that your beneficiaries receive the proportions you desire.
   
   The additional items below are optional considerations when the bequest is made to charity.
5. Unrestricted Bequest: This is a gift for our general purposes, to be used at the discretion of a governing body. Charitable organizations prefer this type of bequest because it allows the organization to determine the most pressing need for the funds at the time of receipt.
6. Restricted Bequest: This type of gift allows you to specify how the funds are to be used. It is advisable to consult with the charitable organization prior to making the bequest to confirm that your intent can be fulfilled.
7. Honorary or Memorial Bequest: This is a gift given “in honor” or “in memory of” someone.
8. Endowed Bequest: This bequest allows you to restrict the principal of your gift, requiring the charitable organization to hold the funds permanently and use only a small percentage or the income they generate. Creating an endowment in this manner means that your gift can continue giving indefinitely.

by: Todd C. Ratner, Esq.