Bequest

What is a Bequest?

A bequest refers to the act of leaving personal property or financial assets to a beneficiary through a legal will upon the death of the benefactor. A bequest can include various items such as stocks, bonds, cash, jewelry, art, real estate, and other personal property. The individual making the bequest is known as the testator, and the recipient of the bequest is referred to as the beneficiary.

Examples of Bequests

Personal Bequest: Collins received a set of sterling silverware as a bequest from her deceased aunt.
Financial Bequest: John bequeathed $50,000 to his favorite charity in his will.
Specific Bequest: Sandra’s grandmother left her a diamond ring through her will as a specific bequest.
Residual Bequest: After distributing specific bequests, John’s remaining estate was given to his two children equally.

Frequently Asked Questions (FAQs)

Q1: What is the difference between a bequest and inheritance? A bequest specifically refers to items or assets given through a will, while inheritance is a broader term encompassing all assets received from a deceased person, including those distributed without a will according to the laws of intestacy.

Q2: What types of bequests can be included in a will? A will can include various types of bequests such as specific bequests (specific items or amounts of money), demonstrative bequests (gifts from particular sources), residuary bequests (remainder of an estate), and contingent bequests (depending on certain conditions).

Q3: How can a bequest affect estate taxes? Taxes on bequests can vary depending on the jurisdiction and the value of the estate. In some cases, beneficiaries may be liable for inheritance taxes, though certain bequests to spouses or charities might be exempt or treated preferentially.

Q4: Can a bequest be modified after the will is written? Yes, a testator can modify a bequest by amending the will (known as a codicil) or drafting a new will entirely. It is essential that these modifications adhere to legal formalities to ensure they are recognized.

Q5: What happens if a beneficiary predeceases the testator? If the named beneficiary in a bequest dies before the testator, the bequest may lapse and become part of the residuary estate, unless a contingent beneficiary is named or anti-lapse laws apply, which vary by state.

Testator: An individual who creates a will and specifies the distribution of their estate.
Beneficiary: A person or entity designated to receive assets or property in a will.
Codicil: An amendment or addition made to an existing will.
Intestate: Dying without a legal will, causing the estate to be distributed according to state laws.
Executor: A person appointed to carry out the terms of a will.

Online Resources

References

Nolo. “Types of Bequests: What Property Can You Leave in a Will?” Retrieved from https://www.nolo.com/legal-encyclopedia/types-of-bequests-property-leave-will-29583.html
Investopedia. “What is a Bequest?” Retrieved from https://www.investopedia.com/terms/b/bequest.asp

Suggested Books for Further Studies

“The Complete Guide to Wills, Estates, & Trusts” by Alexander A. Bove Jr.
“The Executor’s Guide: Settling a Loved One’s Estate or Trust” by Mary Randolph J.D.
“Plan Your Estate” by Denis Clifford J.D.
“Estate Planning Basics” by Denis Clifford J.D.

Real Estate Basics: Bequest Fundamentals Quiz

### What is a bequest? - [ ] A loan taken out from a financial institution. - [x] Personal property or financial assets given through a will. - [ ] A contractual obligation to pay money. - [ ] The legal process of contesting a will in court. > **Explanation:** A bequest refers to personal property or financial assets given to a beneficiary through the terms specified in a will. ### Of the following, which is a type of bequest? - [x] Specific bequest - [ ] Mortgaged bequest - [ ] Insured bequest - [ ] Leased bequest > **Explanation:** Specific bequest refers to the gift of a distinct item or set of items (e.g., a car or a stock portfolio) to a particular person or entity outlined in a will. ### Who is the individual making the bequest in a will called? - [ ] Executor - [x] Testator - [ ] Advisory - [ ] Legatee > **Explanation:** The individual making the bequest by creating a will is called the testator. ### What happens to a bequest if the named beneficiary dies before the testator? - [x] The bequest may lapse and become part of the residuary estate. - [ ] The bequest is automatically transferred to another random beneficiary. - [ ] The bequest turns into a liability that must be cleared. - [ ] The bequest is destroyed. > **Explanation:** If no contingent beneficiary is named, the bequest may lapse and become part of the residuary estate, depending on any applicable anti-lapse laws. ### Which term describes a person authorized to execute the terms of a will? - [ ] Trustee - [ ] Benefactor - [x] Executor - [ ] Administrator > **Explanation:** An executor is tasked with carrying out the terms set forth in a will by the testator. ### Can a bequest be made to an organization? - [x] Yes, bequests can be made to charities and organizations. - [ ] No, bequests can only be made to individuals. - [ ] Only governmental bodies can receive bequests. - [ ] Only financial institutions can receive bequests. > **Explanation:** Bequests can be directed to charities, organizations, and various entities, not limited to individuals. ### What document is essential for outlining bequests? - [ ] Mortgage - [ ] Property deed - [ ] Lease - [x] Will > **Explanation:** A will is used to establish bequests and outline the wishes of the testator for distributing their estate. ### What is a codicil? - [x] An amendment to an existing will. - [ ] A gift without a will. - [ ] A list of legal heirs. - [ ] A type of bequest. > **Explanation:** A codicil is a document that modifies or amends an existing will. ### Which type of bequest distributes the remaining estate after specific bequests? - [ ] Conditional bequest - [ ] Specific bequest - [x] Residuary bequest - [ ] Universal bequest > **Explanation:** A residuary bequest involves distributing the remaining portion of the estate after specific gifts have been given. ### What is required to be valid for a bequest? - [x] It must be legally declared in a will. - [ ] It must be notarized. - [ ] It must be approved by the beneficiary beforehand. - [ ] It must be contested in court. > **Explanation:** For a bequest to be enforceable, it must be outlined in a legally valid will.