A personal gift in a will may be defined as: property that is distributed from one person to another through the use of a valid will document. Since the gift will be distributed using the will instrument, the gift will only transfer to the recipient when the creator of the will (the “testator”) dies.
Under estate laws, such gifts are considered “personal” because they are transferred from one person to another specific individual, rather than to a general entity like a charity.
There are many reasons why a person may want to distribute gifts through a will upon death rather than during their lifetime. A common situation is where the owner of the property will still be using the asset or property while they are alive (such as a residential home or their everyday car). They may want to transfer the property only after their death so they can continue using the property.
What are Some Ways to Distribute Personal Gifts in a Will?
Yes. There are a few different ways a testator can distribute gifts in a will. These will depend on the wording used to describe the property, as well as the way in which the owner classifies the gift. State laws may also have different requirements in this regard.
In general, there are three main ways to categorize personal gifts in a will:
- Specific Gifts: These gifts are described in detail and clearly identified as a specific pieces. For example, if the property owner decides to give “my 1980 Chevrolet Camaro to my son Bob”, this would probably be regarded as a specific gift. The gift instructions would only be satisfied if Bob specifically receives the 1980 Camaro, and not a different car. If there are two different 1980 Camaro, then in order for it to still be a specific gift, then the will should say that Bob receives the blue 1980 Camaro. A specific gift can also be called by other names, such as a specific devise.
- General Gifts: A general gift is one that isn’t described clearly enough in the will document to be associated with a specific item. For example, if the testator writes in their will that they wish to give “one of my cars” to “my son Bob”, this will probably be considered a general gift. Distributing any of the person’s cars to Bob would satisfy the gift instructions.
- Residual Gifts: This deals with the distribution of the property that is left over once the specific and general gifts have all been distributed. For example, the property owner’s will might state, “I leave the rest of my property to my Aunt Michelle.” Aunt Michelle will then receive whatever property is leftover, sometimes reduced to a lump monetary sum.
The difference between specific, general, and residual gifts comes becomes very important when one of the gift requirements is not satisfied. For instance, if the property owner chose to give a certain ring as a specific gift, but they did not possess the ring anymore at the time of death, it could affect the entire chain of property distribution (especially residual gifts).
Thus, it is important that personal gifts in a will be drafted clearly and carefully to ensure that the person’s wishes will be carried out as they would like them to be. When it doubt, being as specific as possible can help ensure that the right gift will go to the right person.
Should I Transfer a Gift in a Will or During My Lifetime?
A gift that is distributed through a will after death is known as a “testamentary gift.” In contrast, a gift that is distributed while the person is still alive is referred to as an “inter vivos gift.” Inter vivos gifts are typically transferred through other means besides a will, such as a living trust.
The choice of whether to distribute gifts during life or after death is mostly a matter of individual preference. As mentioned, if the holder of the property will still be using the property item up until their death, then it may be better to transfer the gift through a will.
But, if they would like to have the item distributed to a recipient while they are still alive, then it may be better to transfer it as an inter vivos gift rather than a testamentary gift. Some of the characteristics of testamentary gifts and inter vivos gifts include:
For Testamentary Gifts:
- Sometimes Revocable: Testamentary gifts can sometimes be revoked or withdrawn at the request of the donor;
- Donor Retains Possession: Since the gift will only be transferred upon the testator’s death, they can still use the property during their lifetime; and
- Conditional: The donor can usually place conditions on the gift (for example, Jane will receive my watch only when she turns 18 years old).
For Inter Vivos Gifts:
- Immediate Gratification: Both the recipient and the donor would have the satisfaction of seeing the gift being used while the donor is still alive;
- Irrevocable: Inter vivos gifts are permanent and irrevocable. This means that the donor cannot repossess the item once transferred; and
- Tax Breaks: Some inter vivos gifts are associated with various benefits like tax breaks.
Again, the key to proper distribution of personal gifts in a will is thorough, detailed planning. While no one can anticipate every possible situation in the future, it is better to handle gifts with in-depth planning, rather than distribute them in a careless way.
Do I Need a Lawyer if I Have Issues with Personal Gifts in a Will?
If you have questions or legal issues about distributing personal gifts in a will, you may wish to consult with a estates attorney for advice. An attorney near you can help advise you on how to distribute your gifts according to the way you want. Alternatively, if you will be receiving a personal gift in a will, a lawyer can help defend your interests if a contest or dispute arises.