Your Guide to Leaving a Gift in Your Will
Within your Will it is possible to leave three types of gifts:
- Specific (particular items or a group of items),
- Pecuniary (money)
- Residuary (the ‘residue’ of your estate, i.e. what is left over). These can be gifted to whomever you choose, but there are some exceptions such as the age of the recipient, or whether the gift is yours to give.
When you create a Will, you may wish to leave a gift within it. You can gift everything, or certain specifics within your Will - it is completely your choice.
Although, without a Will you won’t have this choice, and the law decides who inherits from you, so it is important to have a Will in place.
Our guide on 'Who inherits if you die without a will' may help you further.
Types of gift
Specific
This type of gift is for a particular item, or perhaps a group of items (e.g. one of a collection or all of a collection).
If these are not owned by the deceased at the time of their death, the gift will fail (it will not be made), as only that specific item can be gifted (i.e. another piece of jewellery cannot be given in replacement of a piece that was lost, stolen or sold).
Pecuniary
This may sound like an unusual or complicated term, but it simply means the gift of money, of any amount.
Residuary
A residuary gift is a gift of the ‘residue’ of your estate, i.e. what is left once all debts, taxes and other gifts have been paid and given.
If no other gifts are given then it is just the whole of the estate once all debts and taxes are settled.
Who can you gift to?
You can leave gifts to whoever you wish. Although typical recipients usually include children or charities, you can also gift to family or friends. Those who receive a gift in your Will are called beneficiaries.
Gifts to children
The rules surrounding gifts state that children under 18 cannot receive a gift. You can therefore make the gift to the child’s parent/guardian, although this risks them using it before the child turns 18.
They may use this money for the child’s benefit, e.g. put it into a bond for them, but you may wish the child to have complete control over what they do with the money.
If your gift is that of your residuary estate you can therefore specify in your Will that the child receives it upon their 18th birthday, or between the ages of 18-25.
However, it is worth bearing in mind that if they receive it later than their 18th birthday, there may be tax implications.
Gifts to charities
Charities are not self-sufficient and they rely on the generosity of others to continue their good work. One of the ways this generosity can be given is through a gift in your Will. You may have a particular charity you love and wish to support, in addition to leaving gifts to family/friends, or you may wish to gift them everything.
When leaving a gift to a UK-based charity in your Will it will be tax exempt. To leave them a gift you just need their charity name, address and their registered charity number.
You will also need to state the amount you wish to leave them. A gift does not have to be monetary, you can also leave them specific items, or even include them as a residuary beneficiary.
You can also create a letter of wishes if you have specific requests about what you wish the gift to be used for.
Is it possible to exclude people from receiving gifts?
If you wish to exclude certain people from receiving gifts in your Will, especially if they are likely to inherit under the laws of intestacy, then it is wise to state this in a Letter of Wishes.
If you don’t expressly state that someone should not inherit, when you die they may still be able to claim entitlement against your estate.
Anyone who is maintained by you, wholly or partly (e.g. children / spouse / partner) may be able to claim if they have not been adequately provided for, e.g. if you left all your money to charity and nothing to them.
Under what circumstances will a gift fail?
If your Will is not kept updated, circumstances stated within your Will may no longer apply.
For instance, you may no longer own the gift, or the beneficiary of the gift may have passed away before you.
If the beneficiary has already passed away, their gift may become part of the residue of your estate as the gift will have lapsed, under what is known as ‘the doctrine of lapse’. To avoid this you can nominate an alternate beneficiary within your Will.
Gifts may also fail under certain circumstances, known as a ‘gift fail’. This applies where you no longer own the item, but there are also other examples.
For instance, this may happen if you have been too vague about a beneficiary, e.g. ‘I leave my car to my brother’, but you have two brothers and have not specified which.
Other circumstances under which a gift may fail include:
- Where joint beneficiaries are unclear e.g. ‘I leave £5,000 to my siblings’ yet it is not clear whether that money is to be divided between them or they should receive £5,000 each.
- Where the gift itself is unclear e.g. you gift your car to your friend but you own more than one car and do not specify which one.
The best way to avoid a gift failing is to seek legal advice when writing your Will. If you are thinking about leaving a gift in your Will, speak to one of our specialist advisors today.
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Note: First4Lawyers offers this information as guidance, not advice. Before taking any action, you should seek professional assistance tailored to your personal circumstances
